Tag Archives: streaming services

Anatomy of An Insight: Cornetto Commitment Rings

cornettocommitmentrings

My wife and I seldom quarrel, but when I started to watch Orange is The New Black alone without her, there was a heated exchange. Therefore this is brilliant execution tapping into current life of target audience:

Insight: The biggest time commitment you make in this digital world is the 10+ hours you decide to invest to a TV series. You should want to share those moments with your loved ones, but quite often the temptation to be the first trumps the consideration for your other half.

I am not exactly sure whether Cornetto exactly the right brand to do this, but idea is rooted on a true insight.

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Why Spotify Discover Weekly Is The Best Music Curation Tool?

Apple Music arrived with big bang. Its approach to music streaming is surprisingly old school. It relies a lot on human curation and its programming resembles old radio (some of the shows are definitely worth listening though). It´s biggest rival Spotify is relying more on big data. At the moment it seems that latter approach seems to be the winning formula. Eventually recommendation engines will become a core differentiator (as the libraries will become quite identical) for streaming services, so the headstart Spotify has is not insignificant.

Human curation was the way taste making happened back in the day. I used to rely almost totally to Dj Anonymous on my music recommendations. Best dj´s in the world have much more refined taste than any machine yet. The challenge with human curation is that it does not scale.

The recommendation engines were not really been yet up to task because the algorithms have not been advanced enough to recommend right songs. Music is nuanced thing and linear recommendation is not usually providing satisfying listening. Previous Spotify recommendations have been borderline ridiculous:

Prince Spotify

Previously there has not also been enough data available. For recommendation engines to work, you need to have massive amounts of data and something that is relevant. The key for Discover Weekly to work so well is that Spotify realized that the data they should be mining are the playlists people are making.

“For all the special sauce and the algorithmic work, the fact that we’ve kept it simple and that it’s just a playlist has really helped it resonate with people”
Matthew Ogle (Discover Weekly Product Owner)

The more people are making playlists in Spotify more “human curation big data” they are gathering. Currently there are over 2 billion playlists in Spotify. Spotify has been able to strike the right balance on learning about your listening habits and combining that with the big data:

“On one side, we’ve built a model of all the music we know about, that is powered by all the curatorial actions of people on Spotify adding to playlists. On the other side, we have our impression of what your music taste is. Every Monday morning, we take these two things, do a little magic filtering, and try to find things that other users have been playlisting around the music you’ve been jamming on, but that we think are either brand new to you or relatively new.”
-Matthew Ogle (Discover Weekly Product Owner)

In the beginning I wasn´t that impressed with Spotify´s weekly recommendations. Majority of the songs I knew already (20+ years of record collecting has its handicaps). After couple of weeks I started to appreciate the brilliance of it. Spotify Discover Weekly has become my “comfort playlist”. It plays stuff I know, but drops every week couple of nice gems I had not heard or had totally forgotten. During working week I listen to lots of weird stuff outside my usual taste profile, Spotify´s weekly recommendations don´t seem to pick on those anomalies and the quality is constant:

Like mentioned earlier, eventually data will trump human experience. In many fields, we are already there.

“In the next generation of software, machine learning won’t just be an add-on that improves performance a few percentage points; it will really replace traditional approaches.

Today, you’re much better off building a smart system that can learn from the real world – what actual listeners are most likely to like next – and help you predict who and where the next Adele might be.”
Eric Schmidt, Alphabet executive chairman

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Nuttin But A Beats Thang: Apple to The Next Episode

dredaystickers
It has been a real Dre Day, although it is not February 18th.
After long rumor mill, it is finally official. Apple acquired Beats headphones.  The deal has cause quite a lot of buzz around the globe, but I think the deal makes sense from many perspectives:

1. Beats is a good buy.
Buying Beats is not a speculation. Apple is buying a company, who is dominating premium headphones market with over 51% market share (some estimates have it even higher). As Beats is private company there is no public revenue numbers, but there are estimates of 1B of revenue with probably quite high profit margin. Buying 1 billion business for 3 billion is not a long-shot (like WhatsApp acquisition, which had significantly higher price tag) it is pure mathematics. You are buying market leader with an already established business and fast growth.

2. Beats gives Apple a headstart with music streaming service.
Yes, Apple could build their own streaming service, no one doubts that. Having Beats streaming service gives them great launchpad to go into a territory they have neglected. And I would not also worry about negotiating about the rights again. Apple has been quite effective in doing that in the past. Apple CEO Tim Cook stressed the importance of music in the recent interview:

This is all about music, and we’ve always viewed that music was key to society and culture. Music’s always been at the heart of Apple. It’s deep in our DNA. We’ve sold Macs to musicians since the beginning of Macs. And we accelerated the music industry with the digital music revolution with the iPod and the iTunes music store.

When we talk about Apple today, the music has not been on the focus compared to the heyday of iPod & iTunes. This deal makes Apple´s music offering again interesting. The future of music is streaming (although as an avid record collector, the future and past will forever be on vinyl) and that is something where the almighty Steve Jobs was wrong. This acquisition enables Apple to get on the parity with competitors and on the other hand provides Beats Music immediate increase in interest. It is probably no coincidence that Tim Cook mentioned Beats Music as the streaming service which has “gotten it right”.

3. Beats will be an important part of the Apple´s wearable tech puzzle.
You seldom buy companies because of their current state, but because of the current potential. That is where I think this gets really interesting and I am quite sure that Apple will be having some tricks on the sleeves and not just concentrating on music with this acquisition.
iWatch has been rumored for a while. It will probably arrive when you least expect it. It is certain that Apple will enter to the wearables and they will probably do it right as well. Although the wearables have not yet really taken off, believe me eventually they will. We overestimate technological disruption on a short-term and underestimate it on a long-term. Apple has also been massively successful in fulfilling needs of the people, they do not even realize they have.
Beats headphones have been one of the best examples of wearable tech, because they have really nailed the lifestyle aspect. Sound quality is one thing, but you really want to be seen with your Beats headphones. This is something the first wearables have not really grasped. When wearable tech looks ugly only the geekiest early adopters will wear them. And no offence to geeks but they do not start trends. Wearable technology is even more fashion than technology.
Apple has definitely understood this as they have also been recruiting fashion specialists from YSL and Burberry. I don´t believe that is an isolated strategy from the Beats acquisition.

4. Buying beats is getting the right talent
You are hiring Dr. Dre, one of the most legendary music producers ever and Jimmy Iovine, who knows the ins and outs of the music business. Iovine has been also key partner with Apple during the launch iTunes Store. Both are visionaries and can definitely help Apple to shape the future of music and wearable offering. Will they fit in Apple corporate culture? Who knows, but at least you could not hire more capable talent to help you in your future endeavors.

Also I do not really get the talk about how uncharacteristic this acquisition is for Apple.
Yes, they are usually buying smaller and more obscure companies (at least for mainstream audience). Nevertheless they are buying companies.
If you have loaded cash reserves, I don´t understand why you should withdraw from buying other companies. If it makes sense and in this case it does.
Necessary part of evolution of a company is to know when to do something surprising. This was surprising move (initially, not necessarily today because it pretty much just confirmed the rumors), which showcases that Apple does not sway away from being bold.

So put on “The Chronic” on your turntable or your favorite streaming service and:

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