Why Data Is Important - Especially In the Entertainment Industry
Data has been a buzzword for quite some time, but the power that it packs is incredible. Data is any information that can be turned into useful insights and actionable steps after just a bit of analysis. With changing technology and the resulting new ways of consuming media, massive amounts of data on consumers are collected each passing second (1TB of data is collected on Spotify users alone each day). The way companies harness and utilize this data can change everything - and I mean everything. You know Netflix’s incredible first original show House of Cards? It was essentially approved because data on Netflix users indicated that they would enjoy it. Do you look forward to Mondays because your Spotify Discover Weekly playlist refreshes then? The songs that show up on that playlist all depend on data Spotify gathers on your personal listening habits.
Millennials (the largest generation to date) want something to consume, they want it now, and they want it to be damn good. So how do you take advantage of that? Offer them content, but then collect and analyze data on how they interact with the content. This allows you to create better experiences for them, which keep them coming back for more, and this is why data is important - especially in the entertainment industry.
Airbnb boasts a massive data science and analytics department and for good reason - they collect so much of it and they understand its value! While travel is perhaps not quite what we think of when we say “entertainment,” it definitely still applies. From a blog post written by Airbnb’s first data scientist, he wrote, “At Airbnb we characterize data in a more human light: it’s the voice of our customers… it’s an indirect way of the person telling you what they like and don’t like.” Understanding this is crucial.
Any type of information a business can collect on their customers can and should inform decisions the company makes about their strategy, product, and future. In order for the entertainment industry (and especially the music industry) to stay afloat, it’s necessary for consumers to continue coming back to consume and spend money on the product in some way, shape, or form. The best way to encourage consumers to return to your product is to see what they love, like, and hate, determine why they feel that way, and then act on that information.
A large part of data within business is the mindset behind it. In the Airbnb article mentioned above, the author also said this: “The foundation upon which a data science team rests is the culture and perception of data elsewhere in the organization, so defining how we think about data has been a prerequisite to ingraining data science in business functions.” The resulting actions that are made from the data discoveries are equally, if not more important, because those are the things that create positive, lasting change within an organization.
When determining whether or not they should purchase the rights to produce and air House of Cards, Netflix’s data team examined viewer habits and discovered that their consumers watched the British version of House of Cards a lot, loved The Social Network (which was directed by David Fincher, the director of Netflix’s House of Cards), and that fans of the British version of House of Cards frequently watched Kevin Spacey movies. They took this information, put their brains together, and determined that making the decision to purchase the rights to House of Cards was wise. This was the beginning of Netflix’s incredible original programming, something that encourages people to subscribe to their service and is responsible for a lot of that company’s success.
Entertainment companies not using data analysis should follow in the footsteps of Netflix, Spotify, Airbnb and more and learn from their success. Data analysis reduces risk in decision making and can lead to actions that improve products and give customers what they want. The more a customer is satisfied, the more likely they are to continue using the product and then spend money on the product. This is crucial if the entertainment industry wants to remain afloat.
Adrienne Franke works on the client strategy team at Made In Network and - surprise!- helps us analyze data.