Spotify looks to machine learning as competitors raise the volume

Contact: Scott Denne 

Spotify hopes that machine learning will be its encore. Two years ago, the company seemed to be pulling away from its pint-sized competitors with its then-novel on-demand music-streaming service. Now Apple and Amazon have gotten into this space, where they can leverage their large audiences and deep pockets.
Spotify has neither of those advantages. Instead, the company hopes that better data will enable it to compete with the internet’s largest vendors. On the one hand, trying to beat the likes of Amazon and Google through better data seems laughable. But music is a different beast. The data that’s easy to collect doesn’t tell you much. The data that’s hard to get provides more value.

Take the problem of music recommendation and discovery. Analyzing the relationships among simple data – artist, track and category – leads to results that are obvious and uninteresting. Telling a fan of Led Zeppelin that they might also like Aerosmith, while likely true, is of no value as such a person is likely familiar with both bands. Using that same data to make ‘long-tail’ recommendations scales up the chances of inaccurate results as it forces recommendations of less-popular music.

Although the music itself is becoming a commodity, Spotify is looking to draw non-commodity data from it. Take this week’s acquisition of Sonalytic. The London-based startup is developing tech that identifies songs from short clips and musical stems, even when masked by changes in pitch, tempo and so on. Similarly, its 2014 purchase of The Echo Nest brought it technology that combined digital processing of music with natural-language-processing algorithms. By understanding the music, not the metadata, Spotify is positioned to make better recommendations, beyond identifying what’s already popular.

Similarly, a more nuanced picture of audiences could help Spotify attract artists to its platform – not just as a place to host their catalogue, but also for the analytics tools it provides. Those tools could entice artists to encourage sharing and listening of their music on Spotify and open avenues to grow its business beyond a simple subscription app into other parts of the music industry, such as promotion.

Spotify needs these efforts to bear fruit soon as its competitors are gaining ground fast. According to 451 Research’s VoCUL surveys, the company’s paid app is making only modest subscriber gains – 7% of people surveyed in December said they intended to use the paid service over the next 90 days, up from 5% a year earlier (its free service hovered at about 17% in recent surveys). Meanwhile, Apple Music went to 12% from 7% in a year and Amazon Prime Music is consistently above 20% in those surveys.

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