RE-DATA MINING

"When Data Guys Triumph"

This is an article about how "Moneyball" has altered the career path of business students, how they’re now doing work in analytics, looking for inefficiencies.

The money quote is:

"In most industries, Generation Moneyball isn’t yet in charge. But as the Nobel laureate Max Planck once said, ‘A new scientific truth does not triumph by convincing its opponents and making them see the light, but rather because its opponents eventually die’ and a new generation grows up that is familiar with it.’"

In other words, Doug Morris is gonna die and those who inherit the music business will be beholden to none of the precepts handcuffing him. Having grown up with Napster and the free dissemination of music and ideas they’ll harness new tools to break new acts in new ways.

It’s not about changing the old guard, but waiting for when they move down the line.

The old guard is still fighting Napster. The old guard is complaining about meager Spotify payouts.

The new guard knows that getting noticed is your hardest job. How do you harness the Internet to spread the word on great music, knowing that once you’ve amassed an audience there are multiple ways to monetize, not all of them the same as in the old days.

Right now innovation is in tech, Silicon Valley is where the action is because there’s no old guard to prevent entry. You have an idea and you play.

But you’re frozen out of music. The major labels don’t want youngsters and it’s the same at Live Nation and AEG. Live Nation is not a growing concern, it’s an operation shrinking in search of profitability. But Irving Azoff is not going to live forever. Nor is Randy Phillips. And when they’re gone…

If you think the new breed of music executives will look like the old, you’re sorely mistaken. The new will be data-savvy, will have grown up with not only the Internet, but Spotify and Facebook and… Their perspective will be totally different.

But those in charge of the old game today can’t risk utilizing these new people. They believe they’re going to destroy their business model. Music must be expensive. It must be broken via radio. It’s best to get someone to go to one gig a year at an inflated price than many for bupkes.

Isn’t it interesting that so many of the new acts want tickets to be cheap.

They get it.

They’re going to inherit the business.

GROUPON

Coupon Sites Are a Great Deal, but Not Always to Merchants

Everyone knows the merchants get screwed, that they end up with twenty five cents on the dollar, that most customers are schnorrers who don’t become regular customers.

But what has not been mainstream knowledge until now is that these surfers generate ill will, that they partake and then complain:

"And the long-term reputation of the merchant may be at risk, according to a new study

Daily Deals: Prediction, Social Diffusion, and Reputational Ramifications

by researchers at Boston University and Harvard that analyzed thousands of Groupon and Living Social deals. The researchers found that fans of daily deals were on average hard to please. After they ate at the restaurant or visited the spa, they went on Yelp and grumbled about it. This pulled down the average Yelp rating by as much as half a point.

‘Offering a Groupon puts a merchant’s reputation at risk,’ said John Byers, a professor of computer science at Boston University who worked on the project. ‘The audience being reached may be more critical,’ he said, ‘than their typical audience or have a more tenuous fit with the merchant.’"

Whew, you think you want everybody, but you don’t. You only want your core, you want to grow slowly, you want lifers, not casual observers.

Look at it this way. If you blast yourself unannounced and unwanted into everybody’s face, you’d better be incredibly good, or you could be toast in a day.

Discounts hurt if what you have is of value.

Coupons give you the illusion you’re doing something, helping your career, when really you may be hurting it.

Sometimes you’ve just got to wait. Focus on your music instead of your marketing. Most people don’t like most things. And the best way to convince them they do is via quality and word of mouth. Better to have a friend take a newbie to the gig than the act cutting a discount so the newbie gets in. The newbie, according to this study, may talk trash, tell everybody he knows that he went to your gig and it wasn’t even worth half-price.

Furthermore, it now appears that Groupon is a fad, just like Guitar Hero.

The key with fads is to adopt early and get out early. The opposite of what the music industry tends to do.

Give Live Nation credit for getting in on Groupon.

But if they think it’s gonna pay dividends for them next year…

Furthermore, did it ultimately hurt them this year?