Spotify, Machine Learning, and A&R

 

Keeping up-to-date with current, trending, and fresh music is part of my current role with Virgin Voyages. Our ships support over 100 different styles and genres of music. Everything from Anthemic Pop to Disco House, R&B, Eclectic Soul, and Balearic just to name a few. Add in the fact that Virgin has always been about “what’s next” as opposed to “what’s now” and the task to constantly discover emerging talent across a vast music landscape becomes quite a challenge. Fortunately, we live in a world of machine learning, algorithms, and data science which makes handling my unique quest that much easier.

 

I switched over from Apple Music to Spotify when I started with Virgin and immediately put together a plan to utilize their unique machine learning system to my advantage.  To be 100% transparent, I am not a programmer so I will not go into depth regarding the technical aspects that drive their bots.  I encourage those of you interested in the mechanics of Spotify’s machine learning to visit their Engineering R&D website.  Here you will learn about their multi-armed bandit framework that drives recommendations for 248 million users and over 50 million tracks.

 

In the most basic explanation, Spotify’s machine learning engine uses a collection of variables from your involvement with their platform. This includes your likes, the albums you save, playlists you like, artists you follow, search history, browsing history, how long you listen to a song, and the playlists you create to feed their suggestions. These recommendations come in a number of formats. You really see this going down from the app’s Home Screen where you will find auto-propagated playlists just for you called Your Daily Mix 1-6, Your Discover Weekly, and Your Release Radar. The app will also suggest playlists and artists related to your past browsing history. These are usually titled For Fans of XMore of What You Like, or Based on Your Recent Listening. In addition, these parameters will feed the various Radio channels you can run from an Artist, Playlist, or that automatically follow when you finish an album as well as the recommendations you receive to add tunes to playlists you have created.

 

Here is the secret to making these recommendations work for you.

 

You have to actually listen to music and build your own library. This includes liking songs, following artists, saving albums, liking playlists, and creating and updating your own playlists regularly. This information is vital to the machines operating behind the scenes because it gives them parameters to follow. Bots don’t necessarily know that Cory Wong, Vulfpeck, and The Fearless Flyers sound similar. They do know that they likely fall into the same category, have similar BPMs, and are statistically liked by the same types of fans. So when you like or follow Cory Wong the machine learning guesses (likely with the statistical certainty of 95% or better) that you would also like Vulfpeck. As you like, follow, and save more artists, the machine uses serious math like regression analysis to predict what you will like going deeper into the Spotify database of tunes.

 

I have been following a systematic approach designed to feed this style of predictive analytics. First and foremost, I listen to a LOT of music (hours upon hours daily). As I listen, I like songs that capture my attention. I go through my Liked Songs and explore each track further at the end of the week. As I go through these liked songs, I may listen to additional tunes by the artist, and if I dig what I hear. I may follow them. I might explore recommended artists and playlists associated with that act and like a few songs for further review. I then choose to either categorize the saved songs to one of my many playlists and closeout by unliking the track. Those that made the cut are now in my library, which I assume is given more weight by the spot-bots.

 

This process has served me quite well for a number of reasons. For one, I am all over the spectrum when it comes to music consumption. I may listen to Deep House at the gym, Hip-Hop Jazz on a walk, the Billboard 100 on a drive, and French Pop while I do the dishes. Liking and moving on while I criss-cross genres allows me to enjoy the tunes and not become overwhelmed by a bot just throwing limited options at me. Reconciling those likes at the end of the week allows me to give those songs a second listen and, if warranted, spend the time exploring the artist, style, playlist, or vibe a bit more. The recommendations I have been receiving in My Daily Mixes are strong evidence that my process is working.  I continue to find new tunes and artists to explore along with the re-discovery of tracks that are not limited to any particular era or genre.

 

In all of my years of consuming music – from LPs to cassettes, CDs, and digitally. I have never had such an eclectic selection of music that consistently piques my fancy and inspires further exploration.  The recommendations aren’t always perfect and I would never give bots 100% control over what I choose for programming needs. However, machine learning helps me wade through the long-tail supply that has become music streaming.

 

My New Gig

 

I am sure many reading this would agree 2020 has been quite challenging. It has been a crazy and (at times) exhausting year. Personally, things have been a bit more hectic as I relocated from AZ to FL to start my new gig with Virgin Voyages as their Manager – Music Production & Operations.

 

The cruise industry was not on my radar when I was looking for the next chapter in my career. Having worked on ships as a musician and later operating as a booking partner for all the major lines. I just didn’t feel that the cruise industry aligned with my goals. I was looking to create something new in the live music industry and in my opinion that doesn’t happen too often at sea. But when I came across the gig listed for Virgin Voyages it caught me as different. I felt compelled to apply and I am lucky that I did.

 

My enthusiasm to hit the high seas quickly elevated as I made my way through their interview process, spoke with their team, and learned about the Virgin culture. If you don’t know, Virgin got its start as a record club on the streets of London.  Shortly after, they opened a recording studio called The Manor, which morphed into a record label. Their first release Tubular Bells by Mike Oldfield would eventually become the theme for the 1974 classic The Exorcist. In 1977, Branson himself convinced The Sex Pistols to join Virgin and together they dropped a piece of Punk Rock history called Never Mind the Bollocks, Here’s the Sex Pistols.

 

When you join the Virgin namesake you quickly witness the correlation between their early days as a record label and what the (dare I say) conglomerate has become today. One where it doesn’t matter if you create progressive cinematic rock like Oldfield, screamed for anarchy like Johnny Rotten, or are made up of an eclectic group fronted by an openly Irish gay man like the Culture Club. If the product is good and you care deeply about it, Virgin has your back.

 

And so here I am. A Virgin employee getting ready to help launch our first ship – The Scarlet Lady with two more visible on the horizon. I am surrounded and supported by some of the most driven and intelligent cruise and non-cruise people in the game. The excitement of what we are creating is powerful. It has motivated me to reclaim my passion for music in ways I never thought the cruise industry could provide.

Judge Judy – A Demo in Audience Compounding

 

My mom is a HUGE Judge Judy fan and I will admit it, so am I.  However, we are fans for different reasons. My mom likes seeing someone her height take control of a situation. While I admire what the 5′ 1″ judge has done in creating a powerful global brand through the concept of audience compounding.

 

In fact, I admire her so much that I have created the Judge Judy Principle in regard to how venues can craft a loyal customer following. It works like this.

 

People are creatures of habit. Our brains have to process so much data each day, that the organ is constantly looking for things it can place on autopilot. This is where habits kick in. We habitually take the same route to work. We instinctively pick-up the same toothpaste without considering dozens of other brands. And for many of us, like Pavlov’s dog, we instantly check our messages when we hear that “ding” from our phones. This is a core part of consumer behavior and many of the top brands seek to utilize it to get their products and services into our auto-consumption routines.

 

Basically, brands need two things to break into our habits. One, they must always be where we would expect them to be and two, they need to give us the same quality product every time. Judge Judy has been doing this since 1996 and is reaping the rewards.

 

She has been on the air for 23 seasons and has remained in the same afternoon slot (roughly 3 pm – 5 pm) for that entire time. This is key to habit-forming because her fans know where they can get their Judy fix anywhere in the country with little effort. Second, her product is always the same. Her intro music and logo don’t change. She wears the same robe. The program is always filmed in the same courtroom – they never go anywhere special. Her bailiff, Byrd, always announces her and the case before jumping into a crossword puzzle. This is the second key to her success – she gives her audience the same quality product at each interaction. This prevents people from becoming confused and continually reinforces their positive stimuli response, which strengthens their tie to the habit and feeds the viewership cycle. It also explains why Judge Judy has a fan base of 10 million-plus every weekday and has been the number one syndicated daytime show since 1998. So, how does this apply to the booking of entertainment venues?

 

Judge Judy’s success is a testament to the importance of establishing a long-term booking strategy and sticking with it. Before the internet, iPhones, social media and streaming, entertainment consumers had fewer options so the onus was on them to seek out their choice of leisure. Technology has shifted this behavior. Consumers now have access to countless opportunities with little cost of engagement such as streaming music on Spotify, viewing videos on TikTok, or binging a whole TV season on Netflix.

 

Talent buyers and venue bookers must consider consistency in their programming as a way to counteract this challenge. Since the consumer’s cost to see live entertainment is more than, say, streaming Hulu at home, they are in a vulnerable position. And if you operate in a highly competitive live market these “on the fence” consumers have a multitude of options at their disposal as well. This means that anything you do that confuses them could become detrimental to your operations.

 

This doesn’t mean you need to book the same act each night, but your calendar should be consistent in one way or another. You can hold tight to theme nights such as Latin on Sundays, Karaoke on Wednesdays, and Pop on Fridays. Or you can book one style of entertainment such as an open format DJ regularly. The key is sticking with your decision once your A/B booking testing is complete (more on that later). This will mitigate the fan’s choice apprehension.

 

It will also fuel an audience compounding strategy that works like this. A customer arrives and digs your vibe, so they come back. If you are consistent and reinforce their stimuli response, they will stay along with the next patron who visits, likes what they see, and decides to come back a second time as well. Over time you will build a core group of promoters for the brand. This will lead to an adoption tipping point that is regularly hit, which will speed the time it takes to fill the venue.

 

However, if you change your entertainment too often you risk confusing and alienating the customers you have gained. In essence, you will start the whole process over and it will take longer for you to pack the house. Think of it like your 401(k). You put in money consistently every month. Later, you reap rewards with very little effort on your part. However, if you pull money out early it takes longer for those checks to cash. This is why Judge Judy is so successful. She has a solid brand that has delivered a similar quality product consistently for 23 seasons and has reaped the benefits of audience compounding in the process.

 

If you would like to learn more please reach out to me at [email protected] or call me at ‭(602) 842-2050‬.

 

 

 

 

The Power of a Venue Pull Marketing Strategy

 

You may be surprised to learn that all of the ads you encounter each day aren’t just to get YOU to purchase products. While this is a majority of the brand’s intent, there is an additional hidden agenda and it comes in the form of a pull marketing strategy.

 

According to the Corporate Finance Institute. “In a pull marketing strategy, the goal is to make a consumer actively seek a product and get retailers to stock the product due to direct consumer demand.” For instance, if Doritos intends to launch a new flavor of chip. Retailers may be apprehensive of allocating valuable shelf space to the product. To mitigate this risk and get them to stock their new offering, Frito-Lay may introduce a pull marketing strategy to build awareness of the new flavor, increase demand, and pull consumers to the new product, forcing retailers to place orders for the flavor.

 

The same can happen in the concert venue world in various strategic ways. One approach is the fan perspective where the venue establishes its brand in a way that pulls specific consumers through the doors to experience the ambiance and /or notoriety. This is the case with legacy spaces such as The Greek Theater, Red Rocks, The Ryman, Madison Square Garden, and The Gorge. Another is to focus on a specific segment. The Bowery Presents does this with their chain of venues that focus on indie and up-and-coming rockers.

 

There is also a pull strategy that can be established by homing in on the talent. In this method, management focuses on enhancing the act’s experience to pull them towards their stage over other routing options.

 

Ryan Murphy did just that with St. Augustine’s The Amp by crafting a positive environment for acts that visited the out-of-the-way outdoor venue. His efforts soon paid off when legend Tony Bennett’s positive experience was relayed to Stevie Nick’s team. This led to a one-off solo show for the Fleetwood Mac star. Soon, The Amp was playing host to names much larger than its capacity.  Kacey Musgraves, who packs the 20,000 seat Bridgestone Arena, legends such as Robert Plant, OAR, Willie Nelson, and Kendrick Lamar made their way to St. Augustine, FL. Helping push The Amp to the #2 amphitheater spot in Pollstar Magazine’s 2019 Mid-Year report.

 

Not too shabby for a venue with a capacity of under 5,000 and well off the routing path.

 

Murphy’s pull strategy circumvented outside variables by going direct to the source of the commodity – the artist. Their handlers very likely were pushing for larger capacity venues that could provide more revenue, more wiggle room on deal points, more efficient routing, etc. Unfortunately, many venue leaders do not understand the rigors of the road and how it impacts artists of every level and, perhaps more importantly, their crew. Giving them a special spot that has a unique vibe, history, and a feel of home can have much more power than we think. It’s not just a pull marketing strategy… it’s a compassion for the artist strategy and it can pay large dividends as Murphy and The Amp proved.

Why You Should Avoid Physical Press Kits.

 

Jeremy Larochelle offers up two reasons why he thinks it’s a bad idea to use physical press kits when selling your live entertainment services.

 

If you need help building your presskit, check out these online services that make life a bit easier.

Sonicbids: https://www.sonicbids.com/electronic-press-kit/

ReverbNation: https://www.reverbnation.com/band-promotion/press_kit

Bandzoogle: https://bandzoogle.com

The Ancillary Dangers of an 18 Plus Club

 

In a previous post, I explained the vital importance of ancillary income for your club or venue.  This income stream covers everything non-ticketed such as VIP, lawn chairs, bottle service, merchandise, food, and beverages. You can only sell your customer one ticket but multiple ancillary units. This makes the latter a key component of your venue’s profitability.

 

That is unless you unknowingly fix them.

 

Let’s take a hypothetical club that holds 1,000 people and assume that each person pays $20 to get into the facility. This leads to $20,000 in income.  Let’s also assume that the venue only sells the ancillary value stream of alcohol. Now let’s look at two scenarios.

 

Scenario One – 21 plus only club:

In this scenario, you only allow persons 21 and older into the venue. For simplicity, let’s say 80% of those patrons drink and the average drink costs $10. This leads to an additional $8,000 in income for your venue. If you have one show per week, this leads to an additional $416,000 per year.

 

Scenario Two – 18 plus club: 

In this scenario, you have a mix of 50% persons aged 18-20 and 50% persons aged 21 and older. Using the same assumptions above, we now have 80% from only 500 fans buying drinks. This has cut our ancillary income in half to $4,000 per night or only $208,000 per year.

You just “fixed” your ancillary sales and unknowingly cut your additional profitability in half. If you continue this trend, you do so further reducing your daily, weekly, monthly, and yearly profit. A 75% underage to 25% drinking age mix leads to only $2,000 per night of ancillary income, which is just $104,000 per year. You are leaving $312,000 on the table.

 

Hopefully, these numbers demonstrate the importance of understanding how your ancillary revenue stream relates to your customer mix. With this understanding, you can now look for ways to adjust these variables in favor of profitability. Here are a few options for the scenario above.

 

Adjust the Customer Mix: This starts with understanding your market demand and business objectives. If alcohol is a main ancillary driver and your market has a healthy collection of 21 plus patrons to pull from, simply making your club 21 and older might be the best option. Otherwise, you will have to put in place ticketing and operational procedures that limit the non-drinking age patrons to an established percentage or adjust one of the other variables to make up the difference.

 

Add Additional Revenue Streams: Introduce non-restrictive ancillary options such as VIP, food, and merchandise options that appeal to your underage clients.

 

Pricing Strategy: Charge the 18-20 year-olds a higher entrance fee to counteract the loss you will incur from their lack of ancillary purchases. The best way to do this is to look at your historic bar sales to establish a baseline for the number of drinks purchased per each patron. If you find this to be two drinks per person, then you need to tack on a premium of $20 per ticket (based on the assumptions above) for each underage patron.

 

The key is to remember that you are in business to maximize your shareholder wealth and that venue profit potential is fixed by its capacity. For every underage patron you let in, you cannot let in a legal drinking age fan who would (most likely) contribute to additional income for your business. As a manager, it is your responsibility to find ways to maximize the profit potential by controlling your customer mix, your products offered, and your pricing strategies.