Recently we looked at the issues surrounding piracy in Brazil. How some artists in the country have accepted that their work will be copied for free and found ways of using this to their advantage. The licensing, piracy and copyright landscape in one of the world’s largest economies, China, isn’t as straight forward. But considering China’s growing economic and political power, it’s becoming ever more important to understand the developments in the country.

China has been synonymous with piracy for a long time. Most of us have heard stories about people travelling to China and bringing back perfect copies of designer handbags and other fashion items. The ambivalence to copyright also exists in the country’s music and entertainment industries.

The Chinese are quickly becoming one of the world’s most connected people. China has more broadband connections than the United States and a growing middle class who have a massive spending power, the problem is that until recently it’s been difficult to buy or stream music legally online in China. About 99 percent of the music found online in China is illegal. The global recorded music industry’s revenue in the country in 2009 was worth just $75 million, compared to $4.6 billion in the US. But Chinese consumers seem to prefer to buy their music online and digital sales accounted for 76 percent of the country’s legitimate music revenue in 2010, compared to 29 percent globally, writes the NY Times.

Not surprisingly China has landed on the US Trade Representative’s annual list of the biggest intellectual-property offenders in the world. Other big offenders are Russia and India. According to the survey piracy is intensifying as the growth of broadband technology makes it easier for people to download and transmit movies and music. The report also states that online sales of counterfeit goods will soon surpass those by street vendors who offer pirated discs or products.

But even though piracy is common in China, the internet is also more tightly controlled than in the West. Websites are censored and microbloggers are required to register their names. In 2010 Google pulled out of the country and now redirects Chinese traffic to servers in Hong Kong.

Recently there have been two recent and contradictory developments in the country in terms of copyright. The first one is the search engine Baidu’s attempt to go legit. The other one is a decision to reform Chinese copyright law in a way that doesn’t sit right with rights-holders in the West.

Baidu going legit
The Chinese search engine Baidu is the largest search engine in the country with about 75 percent of the market share. Considering that China is the world’s largest internet market this is quite a big deal. A lot of the search engine’s users are searching for music online. Until recently Baidu allowed its users to look for mp3s online, not differentiating between legal and illegal material.

Baidu has now gone legit and signed an agreement with One-Stop China, a joint venture between the Universal Music Group, the Warner Music Group and Sony BMG. It will therefore shut down access to pirated music, whilst allowing its users to still access music for free. Baidu will pay the rights-holders for each play or download and cover its costs with advertising.

Some of you might ask… why now? Baidu was founded in 2000 and is one of the world’s largest search engines with a revenue of about $14 billion in 2011. Why change a business model that was working, why start paying the rights-holders now? Some argue that it was time for the company to make sure its business model was totally legitimate. One factor pushing them in this direction was Google’s decision to start using servers in Hong Kong. According to the Guardian it’s part of a broader trend in China where online firms are starting to buy and stream legitimate content. They’re big enough to go legit.

Copyright reform
If the Baidu deal is a positive development for the global music industry, a recent copyright reform draft in China has made rights-holders around the world fairly nervous.

“The National Copyright Administration of the People’s Republic of China (‘NCAC’) is seeking public comments on a controversial draft amendment to China’s copyright law. Per Article 46, one does not need consent to make recordings of another person’s musical work if 3 months have passed since such work was published. Per Article 48, to use such person’s musical work, one must contact the NCAC, identify the published material and its author, and within 1 month of use, submit a usage fee as per the NCAC, to facilitate the distribution of payment to applicable parties.”

Via Slashdot.

Right-holders and songwriters in China argue that the proposal would mean that their work could be copied and distributed by other parties for free as early as three months after its publishing date.

“If the provisions are passed, that will undermine the enthusiasm of music writers and even China’s music industry,” Song Ke, chief executive officer of Taihe Rye, a record company based in Beijing, said in China Youth Daily.

According to industry insiders the proposal would make record companies less willing to invest in recording and promotion, because they wouldn’t be able to recover the costs within three months.

Canadian musician Ember Swift who has been living in Beijing since 2008 writes about what the changes would mean for her and other artists in the country.

“Unlike Western countries, the sale of recorded music has never really been an income source in China … Free downloads are endorsed here as a way of life. Google and Baidu have negotiated deals with foreign and domestic music labels to enable free online access to millions of songs with a quick click on the download icon. In this climate, bands can only sustain on performance fees. When they can secure the occasional licensing fee that comes from the negotiation of the use of their recorded work, for which they are the copyright owners, it’s a bonus. The new revision would strip away the only protection they have.

Firstly, after three months, the exclusive control over who can use their work becomes that of the government. The songwriter would have no rights to deny its use even if the user was in direct conflict with the work’s ethos. Secondly, they have no right to decide how much their music is worth as per the context of its use. Currently, there is no clear indication as to how much artists should be compensated, or even if they will be uniformly compensated. Thirdly, in a society in which government transparency is not part of the system, no one trusts that they’ll ever see those copyright fees that are intended for their pockets, and they’ll have no recourse to seek them out
either.”

The laws would also apply to foreign music distributed in China. The country is currently seeking opinion from the industry both within China and abroad, but China’s growing economic and political clout means that Western economies might not have as much influence over Chinese policy as they would want or hope for.

Glyn Moody writes on Techdirt that “It will be interesting to see the response of the US music recording industry to this proposal. The fact that China can contemplate passing a law with these clauses, even though they are bound to be highly unpopular with US companies — and hence the US government — shows how much the balance of power is shifting between the two countries.”

China’s power and influence is growing, making sure that its consumers understand the value of paying for music, movies and other creative products will be a challenge for the global entertainment industry. The country’s billions of internet users are to some extent an untapped market for those who can get legitimate products their way.

In an article about music licensing in Asia Mathew Daniel, vice president of China-based digital music distributor R2G , writes that rights-holders and digital distributors in Asia have failed their consumers in providing even the most basic platforms for legal delivery of music.

“International artists, their agents and labels have a habit of promoting their music and playing in only Japan and/or Australia while bypassing most other Asian markets … Ignoring these markets or even restricting licensed access to music is not going to solve anything.

The problem of piracy in Asia should not take sole precedence over that of artist obscurity. Licensing music to an online store is not enough. Labels have to also organize promotions and social network campaigns to reach out to a relevant target audience – or at least work with a promotion partner. For example, it is basic marketing sense that if an artist wants to reach out to Chinese audiences, there should, at the very least, be an artist website in Chinese as a focal point. Anything less is gross negligence.”

Those who have been following developments in the music industry over the last ten years or so know that Brazil is in big trouble. Around 52 percent of all records and music in the country were pirated as early as 2003, that year it meant around 55 000 jobs lost and $82 million in unpaid taxes, according to a report by the Brazil US business council.

To put it bluntly, piracy in Brazil is rife. It’s one huge free-for-all bonanza which involves not only the entertainment industries, but also medicine, cigarettes, sunglasses, watches, toys, elevator cables and even airplane parts. The losses alone in the software, records and music, entertainment and motion pictures industries totalled $785 million in 2003. The US Brazil report goes on to explaining the human cost.

“While recording piracy often is seen as a victimless crime, the impact is felt throughout the entire music value chain. The victims include artists whose creativity gets no reward; the loss in hundreds of millions in tax revenue; economies that are deprived of new investment; consumers who get less diversity and choice; and record producers who are forced to reduce their artistic rosters because it is impossible to compete against theft.”

How come piracy has become so popular then? Brazil is a booming economy with a growing middle class who is hungry for new shiny things. André Barcallos, executive secretary of Brazil’s ministry of Justice told an online magazine covering the Americas that piracy “is the most profitable crime in the world and even beats out drug trafficking … The problem is that people don’t know any other way.”

Since piracy has gone pretty much unchecked in Brazil during the last years, consumers in the country have grown used to cheap (or free) pirated products. According to website Insightcrime a 2010 survey of Brazilian consumers showed that 48 percent of those who participated in the survey had purchased pirated goods, mainly because they were cheaper than legitimate products on the market. Of the ones who had not bought pirated products, only four percent cited fear of prosecution as the reason for not breaking the law.

The picture in Brazil gets even more complicated if you take into account that not only pirates have been stealing from country’s artists, so have the bosses of Brazil’s main collections society. Fifteen officials of ECAD, the Brazilian organisation in charge of collection copyright licensing fees for music, face indictment after an investigation in the Brazilian senate, writes ArsTechnica.

“ECAD’s senior leadership stands accused of embezzlement, fraud, and price-fixing. The Brazilian Senate panel described ECAD’s collection system as a “black box” and noted that only 76 percent of the fees collected by the organization were passed on to artists.”

Perhaps it’s not that surprising that the country’s musicians haven’t sat around twiddling their thumbs, waiting for legislators, police and the music industry to somehow sort themselves out. Instead they have been proactive. A new form of music has emerged in Brazil called “techno-brega”, which translates to cheesy techno, a mix of electro beats and cheesy vocals all given away for free.

The artists distribute their music via DJs, street vendors and the internet, hoping it will build them a following and lead to lucrative live shows. In an interview with the Global Post Jose Robert who runs a bregapop website says “if you don’t have an official CD, then what is piracy?”.

The article goes on to interview Ronaldo Lemos of the Brazilian research institute Fundacao Getulio Vargas, who adds that “techno-brega is an industry that makes millions, but it is a completely different model of business … It doesn’t see technology as an enemy but as an opportunity”.

Someone who has picked up on the developments in Brazil is Mike Masnik of the techdirt blog. His take on the phenomenon is a challenge to the music industry.

“Contrary to what the RIAA and it supporters would tell you, the lack of copyright respect hasn’t hurt the tecnobrega space at all — it’s made it explode. It’s allowed many more musicians to make a decent living from music than via a traditional model and it means that much more technobrega music is being produced. In other words, all the stories about how a lack of copyright creates less music are, once again, provably wrong.”

But other research shows that consumers in Brazil are abandoning piracy and opting for more legal ways of getting music as their income grows. According to a recent IFPI report Brazil leapfrogged the Netherlands and Italy to the number eight market in the world. Brazil reported 8,6 percent growth to total industry revenue of $262 million.

According to the same report “pirated music from the Internet has steadily declined as appealing offerings from reputable (and legal) companies have become available.”

It’s a development which could point to quite a nice solution to all the arguments revolving around copyright and piracy. Perhaps we can have both? We can have traditional business models for consumers who prefer getting their music through services like iTunes or Spotify (and the several other similar services out there). We can also have an alternative market for artists and musicians who want to share their music in a different way, who choose new business models, and for audiences who prefer to pay for their music without handing money to record labels or collection societies. Recently crowd-funding superstar Amanda Palmer raised almost $500 000 (and counting) to release a new record without a label, a clear indication that alternative business models also work outside the emerging markets.

By Charlotta Hedman

Tv-presenter and entrepreneur Yemi Sawyerr is buzzing with energy and his positivity is infectious. Then again you probably have to have bucket loads of spark if you’re trying to do what Yemi is doing. Namely launching your own TV-shows online and funding it by working as a presenter during the night. But the lack of sleep doesn’t seem to matter, what does matter is creating a new entertainment format and featuring up-and-coming artists who wont get much coverage in mainstream media. Until they’ve been spotted on LiteSwitch TV, that is.

- A few of the artists we’ve featured have gone on to become quite big now, Yemi says.

He isn’t suggesting this is because of LiteSwitch TV, but he does seem proud over having found artists and given them a platform, before the mainstream media realised their potential.

It’s good that someone is trying to do this, because the reality for up-and-coming artists today is a hard one, without at least a few thousand fans on Facebook or plenty of followers on Twitter it’s hard to get noticed by record labels. For Yemi it’s important to find fresh talents and make sure that they get featured somewhere. At the same time he’s creating a new format in a media industry which is facing a similar shift in consumer behaviour as the music industry. Consumers want a product for free and they are finding new ways of getting to it. The BBC and public service broadcasting companies in other countries are struggling with getting people to pay their license fees at the same time as many swap the TV for the iPlayer, no need to pay a license fee for that. So how do you make money in a changing media environment?

LiteSwitch TV has been around since January 2010 and so far it’s been completely self-funded by Yemi. The show is now featured on NME and mevio.com in the States. At the moment there are eight people working on the project and Yemi hopes to find investors who will take the programmes to the next level and perhaps even to ordinary TV screens. However it’s important to the format that it stays online.

- That’s the foundation, I hope people will start watching more shows online. This way we can cover artists that wouldn’t get coverage anywhere else.

Yemi has a background in traditional presenting and has done shows for MTV, ITV and Sky sports. He decided to start his own company because he wanted to create programmes that he would find enjoyable to watch. The main show “At home with…” features artists in their homes, where they can talk about their life and their music in a relaxed way.

- It’s a good way to get to know the artists really quickly. Consumers today want to know more and more about the artists they like, says Yemi.

The focus of the show is the artist and the human story behind the interviewee. According to Yemi it’s important to put the human story back into music. Simon Cowell might have managed to do exploit sob stories successfully with Britain’s Got Talent and all those other shows, but there isn’t a similar (and perhaps less exploitative) platform for indie artists.

Trying to find new models that work in a new media landscape might mean moving the day job to night-shifts and spending two years building your own online TV-show, but for Yemi it’s working. He admits that building a network around the channel is hard, but it’s important to be persistent.

- If we tweet, we only reach as many people as we and our friends have in our social network.

That’s where Yemi and the artists he’s trying to help face a similar problem. Building a social network and an audience isn’t only challenging for up-and-coming artists, but also for the people who are trying to help them.

By Juliana Koranteng

The value of creative works covered by business journal MediaTainment Finance is continuously affected by new technologies designed for digital delivery.

Seeking financing for their inventions, a group of music-technology start-ups touted their ventures at last month’s MUSIC Techpitch 4.5 pitching competition, which took place at the London headquarters of major music label EMI Music.

Organised by London-based events specialist 2Pears in partnership with EMI, the competition required the finalists to explain, in three minutes, why their Internet-enabled technology software, platforms, gadgets and marketing systems deserved funding to take music entertainment to a new level.

Denver Thomas, Music2Text (@Music2Text), which just might create money for labels (Music Techpitch 4.5’s winner): “Investors tend to ask questions like ‘What’s your history and current position?’, ‘What’s your business model and marketing strategy?’ Then they ask if you own the intellectual property, how you are justifying your valuation. Then there will be terms and conditions. A lot of them are sharks seeking an exit strategy.”

Jyri Forsstrom, LiveMusicStage (@LiveMusicStage): “In general, there aren’t that many investors who are actually focusing on music services. For most, it’s about finding technologies that can be patented and scaled as fast as possible. And that’s totally fair.”

Adam Place, inventor of AlphaSphere (@alphasphere), a mind-blowing new electronic musical instrument: “Investors who don’t have any experience with the music industry or pro-audio industries tend to keep us at arms’ length.  Understandably, we wouldn’t want anyone who doesn’t understand our industry having shares in our company.”

Bil Bryant, Soundation (@powerFX1), a virtual recording studio in the cloud:“After speaking to some interested parties, it’s the music industry because most investors understand the industry is struggling to find new business models.”

David Hamilton, Pepper (@PepperApp), a social-media app for fanatical live-music fans: “We don’t use any government schemes that I am aware of.  In fact, it seems hard to find out about any such schemes that are relevant to our organisation.” 

Olly Mardling, The Sound Index (@OllyWhatTalent), a platform for compiling comprehensive digital-music charts: “With regards to the UK regulatory market, we do not see any major obstacles in our path in this respect and are encouraged by some of the start-up friendly initiatives like the improvements to the EIS.”

Data is Last.fm’s lifeblood, says one of the company’s technical team leads Adrian Woodhead. That doesn’t mean they’re just seeing numbers instead of users.

- A lot of companies are just trying to grab as much information as possible about their users and not giving anything back, says Adrian.

According to him that’s not a sustainable way of looking at data.

- The users will get more and more sceptical about these things. We’re not dealing with very sensitive information at last.fm, but it’s still important to protect and safeguard the data. You don’t want to willy nilly just hand it over to someone else.

There are four development teams at last.fm and Adrian is the head of one of them. He describes the work as gathering data from several different places and then putting it somewhere safe.

- We gather data about how people listen and scrobble, with the help of that we can build better radio stations and better recommendations.

When scrobbling, the name of the song you’re listening to will be sent to and stored in your last.fm profile. The company has tried to make their API as open and easy to use as possible so that data from other music services can be fed into the last.fm database. Right now there are over 600 third party scrobbling apps.

- We don’t sell any data on, but we’re finding different ways of monetising it, while giving something back to the users and keeping them happy.

The company does a lot of internal data mining, trying to spot trends, something that Adrian is surprised labels aren’t interested in.

- We haven’t been approached by an labels about this, but it would be a great tool for an A&R trying to spot new artists. There is so much we can do with data.

The company does occasionally allow researchers to access anonymised data dumps. Recently researchers from Queen Mary University looked into patterns in music and how they have changed over the years. Has music become faster or slower, does it have more or fewer beats? According to Adrian this might be a great tool to improve the company’s radio stations, making sure the beats per minute wont jump too radically from one song to the next.

Does Adrian think data is the new oil?

- You take data and turn it into different things, it comes from different sources and we’re a complex refinery at Last.fm. The most important thing is the treat it carefully and respectfully.

Adrian will be part of a panel at the Music 4.5 conference Data is Sexy 2 on Wednesday the 18th of April. Find out more about the event on the Music 4.5 website.

Q: How and why did you set up NueMeta?
A: I started NueMeta in early 2007 after working in the digital media & entertainment industry for almost a decade. The company grew out of my experiences working in the early days of the online music business where I designed and managed large-scale digital asset management systems for companies like Rhapsody and AOL. Managing digital collections of images, sound recordings and videos numbering in the millions, requires a unique set of skills and knowledge, which I realized few others had. We further recognized that most companies would eventually need to address the challenges associated with a growing number of digital assets they use on a day-to-day basis in their business. We see the field of digital asset and metadata management as still being in its infancy with enormous potential for growth.

Q: Why is it important for media and entertainment companies to embrace global metadata standards?
A: Media and entertainment companies must embrace metadata standards for one simple reason, because the economics of a vibrant and diverse digital marketplace simply cannot support itself otherwise. In order to provide consumers the media and the entertainment experiences they want, and at the same time, respect rights of the owners and ensure they are properly compensated, we need fast, efficient and unambiguous business communications with many different business partners. Metadata standards are the key to achieving this. The digital marketplace is a high volume, low margin business, in terms of transactions. The industry needs to minimize or eliminate as many costs from their business communications as they can, to come close to achieving the balance they seek between the consumer and the creator.

Q: Would you say the entertainment and music industries understand the importance of using metadata?
A: The truth is, the majority of the industry does not fully appreciate the importance and value of metadata. However, in the last few years, I have seen this start to change. We have been working with a number of companies that do “get it”. They recognize that their lifeblood is their digital assets and their competitive edge can derive from the metadata they use to manage them.

Q: What has been the most challenging with setting up NueMeta?
A: Running any type of business is extremely challenging. Running a business in an industry, which has been going through the type of seismic shifts that have occurred in the media and entertainment industry, is especially challenging. However, we do what we do because of our passion for this industry. I want to continue to be a part of changing the industry for the better. Helping consumers get the media experiences they want and helping those who helped create, distribute and delivered the media, to be fairly compensated.

Q: What has been the most rewarding?
A: The most rewarding aspect of NueMeta for me has been getting to know all the amazing and talented people I have worked with or done business with over the years. Our clients span the globe, so we have our team strategically placed across all major media hubs in the US and Europe. This has forced us to become accustomed to working in distributed teams. I value the unique perspectives they bring, the insights they have on the business and the industry as a whole and everything they have taught me along the way.

Q: Where do you want to go next?
A: I have a long-term vision for NueMeta, which we are executing now, and will continue to execute for some time. The field of digital asset and metadata management is still in its early stages. I see enormous growth potential in this field. I am particularly excited about bringing the native XML architectures we use at the core of our software platform to a much broader market. Our approach to metadata management has significant benefits to businesses that deal with large volumes of XML data. This software architecture enables rapid development and greater maintainability, which enables us to keep our costs down. When these systems are combined with cloud computing, we are able to put powerful data management tools in the hands of small and mid-sized companies. In addition, we have just recently have partnered with MarkLogic and we plan to expand that relationship to bring high performance and “big data” solutions to our larger clients.

Q: Do you think data is the new oil? If so why/why not?
A: To be honest, the comparison between data and oil is flawed in my opinion. I think the comparison is trying to suggest that data is this new untapped resource that will drive the economy and make those who control it, incredibly wealthy and powerful.
Let me suggest a different comparison. Data is the new chemistry. Data is all around us. We can collect it, characterize it and mix it with other data. Under certain circumstances, this work will result in new and unexpected breakthroughs. The field of big data is still very young and we have much to learn. But we all recognize it has enormous potential.

In the 80s Nic Garnett was working as a copyright lawyer in Asia, trying to keep bootleg cassettes off the shelves. It was a mission that proved difficult if the shelves then stayed empty, after the pirated products had been removed.

- We had to make sure that affordable, legitimate products replaced those we removed. Otherwise the bootlegs would be back on the shelves almost straight away.

Today it is more difficult to distinguish a pirated product from a legitimate one. There is a lot less about an mp3-file that screams piracy than there is about a physical product with a photocopied cover. But Garnett believes there are tools for fighting piracy in a post-Napster world – one of them is metadata. Garnett doesn’t believe this will eradicate piracy, but he does believe that copyright is as valuable and necessary as it was when it was first invented, arguably even more so.

- The creative industries haven’t managed to completely figure out a way to make copyright work in a new environment.

Garnett explains that copyright provides the framework to extract economic value out of the creative process. However the laws protecting copyrights aren’t working at the moment, the same regulation that worked in the 20th century isn’t working in the 21st century.

Back when copyright was still working there was a scarcity of physical products. Today it is near impossible to stop music or movies from being shared. This is why, Garnett explains, value is shifting from the ability to exercise control over copyright to having information and data about how the work is being used. According to Garnett metadata holds one of the keys to getting back to legitimate markets. Rights-holders can develop, own and deploy metadata and with the help of this information extract economic value. The problem is the creative industries aren’t necessarily doing enough yet to work together and get on the data bandwagon, instead a lot of metadata systems are being developed by third parties. Something that according to Garnett means the music industry is potentially missing out on financial gain.

There are several companies analysing and refining data for the music industry, like Gracenote and Decibel. However the real data giants are companies like Facebook and Google.

- From a technical point of view, if Google decided to run copyright for the world, they could easily do it with their information processing capability, explains Garnett.

This would mean coding up music and movies and providing an information management service. Google already tried to do a similar things with books, which lead to expensive and lengthy lawsuits between the associations like the Authors Guild of America and Google.

Google started digitising books in 2004, but authors became worried when users could view snippets of copyrighted books for free. Google were asked to pay a hundred million dollar settlement to rights-holders in 2008, but that didn’t stop the case from being in and out of the courts in the States, Europe and China. In the most recent development in the case a federal judge in the US rejected the earlier settlement saying

“while the digitization of books and the creation of a universal digital library would benefit many, the ASA [Amended Settlement Agreement] would simply go too far. It would permit this class action — which was brought against defendant Google Inc. to challenge its scanning of books and display of ‘snippets’ for on-line searching — to implement a forward-looking business arrangement that would grant Google significant rights to exploit entire books, without permission of the copyright owners”.

This ruling in effect means that Google wont be able to sell copyrighted works through Google Books. Although according to Garnett, this is probably not a huge blow to the company.

- They are more interested in the content and the information.
- If Google decided to create a global copyright database it would mean a private American corporation has all that information, that sort of power has not been seen before.

The solution, according to Garnett, is for the creative industries to preempt this and create their own “global music grid”.

- It is important to coordinate data and push the system into global markets. The communications industry have managed to do this successfully. It is possible to phone a friend in India, because the mobile network is standardised. There is no reason why we can’t do the same for data.

Third parties like Google, Facebook or companies like Gracenote and Decibel could then fit into the system.

- It’s a better basis to protect music and for working with value-add partners. Meta-data will help create new services that people will want to pay for, just like we needed to get legitimate products back on the shelves in Asia, says Garnett.

Nic Garnett is a solicitor who is consulting with WIPO among others. He has worked with copyright for over 30 years. He will be speaking at the Music 4.5 data event on the 18th of April.

What prompted me to start to thinking about data and then about writing this article was the AppSide conference on Mobile Apps at the beginning of the month and then the Music 4.5 conference on mobile music a couple of days later. So many of the speakers at both events quoted data and statistics in their presentations and that started to make me wonder what all of these numbers actually meant.

We all have to deal with data, statistics and metrics everyday. The media fire them at us persistently, but increasingly we ask ourselves what it is that these numbers actually mean and why they are so important.

At the appside conference people were talking about apps in the main, and there was lots of data thrown around and big numbers quoted. Richard Firminger from Flurry was talking about music apps. There were some very interesting statistics quoted about loyalty and the lifecycle of an app, but there were a few statistics that just didn’t make sense to me.

One metric quoted for music apps was app session length. Now this was quoted at just over a minute. That sounded very short to me, and Richard pointed out that he thought it might be distorted by one very popular app where the average session length was only 30 to 40 seconds. That’s fine, but that starts to make you question the underlying data itself. If the overall statistic can be distorted by a single factor within the dataset, is it actually structured correctly? Is it more to do with how we eventually use that data?

The questions just go on. I actually talked to him at the end of the AppSide conference and asked him some of these questions. I’m sure that the answers are there in the data that Flurry have, but it made me realise that using data without context and understanding can lead to very inaccurate conclusions. If you’re basing business decisions on data that lacks context then surely the decisions you take as a result may not be reliable either.That might be a bold statement to make, but it is possible, and surely something to be avoided at all cost.

So what do we do with all the data we have? Well I doubt very much that we’ll see less data appear about the music business any time soon. In fact, over the last 12 months there have been a number of occasions where I’ve seen the same data used to support very different conclusions. I don’t think this will change, but what can change is how we use and rely on data.

At the Music 4.5 conference Cliff Fluet talked about context being more important than content. In many ways I agree, but when it comes to data I agree emphatically. Without the right context and meaning data can be almost completely redundant, and I think that if we rely solely on data in order to base decisions we run the risk of losing something very critical to the music industry.

Data needs contextualisation with experience and intuition. On it’s own it can be too easy to read wrong conclusions into data that looks convincing but that might not answer the question you think it does.

Ashley Elsdon is a writer and musician who has been blogging about mobile music making since 2006. He founded the Palm Sounds blog (which is now on hiatus)

Data isn’t something new. Its value wasn’t invented at the same time as computers and the internet started generating vast number of Matrix-like numbers spinning around in the system. And we haven’t always relied on digital wizardry to sort through the numbers. Hundreds of years ago data told emperors and rulers how many people had to pay tax in their kingdoms. Throughout the last centuries customer surveys have told companies what and how people want to buy more stuff. But it’s only recently data has been hailed as the new oil. Is it perhaps because there are such great amounts of it, gushing out of the internet like out of a leaky well? Then again we’re all familiar with something called peak oil, so perhaps data should be called the new alchemy? Considering that it is only truly powerful in the hands of people who know what they are talking about. Apparently those people are in great demand, because there is more data floating around than we can currently handle.

This is how one journalist explained why data is the new oil.

“Companies as varied as PayPal, Human Genome Sciences, IBM and Match.com are all drilling down into their data stores, refining and analyzing what they find, and then leveraging their insights to create new products or add value to those that already exist. They are literally turning data into dollars. “

But the problem is, as some argue, that this is turning customers into products. Our choices and movements online are now valuable resources, creating a mass of material that can be analysed, refined and as Virginia Backaitis argues in the quote above “turned into dollars”. In a world of clever algorithms it means that companies can predict our behaviour, in a sense they know us better than we know ourselves. Something that leads to stories like the upset dad of a teenager who wondered why Target was sending his daughter ads that were clearly targeted to someone who was expecting a baby. Then it turned out that his daughter was in fact pregnant, but hadn’t told anyone. Target had managed to guess her pregnancy by looking at her purchases in their shop and then comparing the data to the predicted behaviour of how pregnant women normally tend to shop.

There is already an expression for taking advantage of this new resource “big data”. Only recently have we been able to collect, organise and analyse data in a way that will make some data companies very wealthy. It’s a data rush creating plenty of new jobs. But not only for humans, jobs are also being created for machines. Machine learning and big data go hand in hand. With the help of a great amount of data about a customer and other customers in similar situations a program can guide people in the right direction. It’s a form of AI that will only get more clever by ingesting more data. In the future it might be worth thinking twice about filling in a survey online, the data might be making machines smarter.

This is great for brands and companies who are able to offer their customers a better, targeted service. But it also brings to mind a dystopian future where everything we have ever bought or googled is stored in massive databases, a backlog of our whole lives. Privacy is an issue and the likes of Facebook have been told to make sure their customer data and anonymity is protected. However it’s also thanks to this data that Facebook earns the main part of its revenue.

Data has also become a resource among those competing to stay on top in Silicon Valley. According to Business Insider Google is spending billions on data centers, hoping their ability to process huge amounts of data will continue to keep them ahead of competitors like Facebook and other social networks.

Whatever we think about big data, it won’t go anywhere. Its a resource that has always been there, laying dormant in the background, only to become the new fuel for not only the tech industry, but for anyone dealing with people as customers or consumers.

Find out more about why data is the new oil at the next Music 4.5 event Data is Sexy 2 on the 18th of April.

Three times each year big players in the music and tech industries get together for a slightly secret conference. For a few days employees from companies like Google, Apple, Microsoft, Nokia, record companies and collection societies set aside old grudges and lawsuits and come together for the greater good.

The main goal is to discuss and decide on a set of standards for something called DDEX (The Digital Data Exchange), which in its own words is “a consortium of leading media companies, music licensing organisations, digital service providers and technical intermediaries, focused on the creation of digital supply chain standards”.

Although when senior consultant and DDEX CTO Niels Rump talks about DDEX it sounds more like a kind of science fiction-like entity. DDEX doesn’t have feelings or opinions. It not a company, it’s simply a set of standards that the music and tech industry agree on and use, which in the end benefits all. It’s simply data and Rump is keen to keep it that way.

- It’s important that DDEX stays completely neutral, we tried this once before and then industry interests sometimes got in the way of the work, explains Rump.
- DDEX has always been neutral as to the business models that people want to use. DDEX just provides the standards and people can use them for whatever business model they see works for them.

Rump is working for a consultancy that has been tasked with making sure new data fields are fed into several XML Schemas. These make up the standards and users then send their information in accordance with these schemas.

DDEX was set up in 2006 building on the MI3P project (The Music Industry Integrated Identifiers Project). The goal was to create unique identifiers for online offerings of music. Rump shows me the schemas and it’s possible to tag a song with several hundred different categories, all with their own subcategories. It’s specific, thorough and a dream of organised geekery. Every category has to be approved during one of the three annual DDEX meetings. There are currently 70 members and 700 licenses using DDEX.

The tool is mainly used by online retailers and rights holders, in order to make sure the right data can be collected and eventually reach the right people, but also by labels to ensure that the right product is available, at the right price, at the right retailers. But it hasn’t always been easy to get everyone onboard and using the standard. Staying out of trouble and not taking sides helps.

- We only want to solve a technical problem, says Rump.

DDEX is currently hosting its 19th open plenary meeting in New York.

Niels Rump will be talking about the merits of good data at the next Music 4.5 event – Data is Sexy 2.