BIG DATA TRANSFORMING THE MUSIC INDUSTRY

Big Data, The Music Industry and Utopia MusicMay 2020

1

INTRODUCTION

This paper presents a descriptionof ‘big data’; it’s history andrelevance today and how it canbe utilised to solve marketinefficiency. A focus is providedon the inefficiency that exists inthe music industry. This existswhere artists, producers andrights owners of all music that isconsumed across the globe, arenot compensated fairly andefficiently for the music that isconsumed. We then considerUtopia Music and how it intendsto solve such inefficiencythrough the use of big data.

Finally, we extend our analysis ofbig data to further areas of themusic industry and other ways itmay be utilised.

Even in its most prosaic form, datahas long been a recognised andvalued commodity. For example,military strategists throughouthistory would rely on the data givento them about the enemy, their ownforces and logistics to enable correctdecision making in war. Whilst inpresent day business, data, and theinformation that can be derivedfrom it, is absolutely crucial inenabling appropriate and timelydecision making and sound businesspractices; generally, the greater thequality or quantity of data available,the more informed the decisionmaking. There is a view that data isnow the world’s most valuableresource, surpassing even oil. Likeoil, data can be distilled into amyriad of useful products, whilst bigdata facilitates informed decisionmaking and analysis bysystematically extractinginformation from sets of data thatwere, until recently, simply too largeor too complex to be harnessedusing traditional methods.

BIG DATA – INFORMED DECISION MAKING▪ Big data has become

increasingly prominent asa mechanism to solveinefficiency in a variety ofindustries.

▪ Information can be drawnfrom data sets to promoteprudent businessdecisions.

▪ The Music Industry facesinefficiencies which canbe solved by effectivelyutilising big data; morethan 50% of revenues gomissing in the industry.

▪ Utopia Music is one suchentity achieving thismission; deployingmodern technologies toensure artists are paidfairly for how their music isconsumed.

▪ Prioritising technology isevident in the behaviourof market leaders.

2

BIG DATA

Data can be defined as individualunits of information, where suchinformation is collected togetherfor reference or analysis. Data isassumed fact and can beconsidered as the basis ofreasoning or calculation. It isimportant to first make thedistinction between ‘data’ and‘information’. Although each isoften used interchangeably withthe other, data is transformed intoinformation when it is viewed inthe context of the event or objectwhich is being analysed. Therefore,we can use data to drawinformation about events orobjects.

By the mid-1990s, it had becomeincreasingly difficult to effectivelymanage data. It was clear that atechnical solution was needed thatcould predict patterns in datawithout the need to understandthe data – put more simply, amachine was needed to siftthrough very large amounts of dataand provide meaningful andcomprehensible summaries.Rumours of ‘big data’ started toappear in literature around thistime, but as a problem, not as atool.

Big data, measured in megabytes,at the time could not fit in corememory or even on local disks; byway of context, current muchsmaller mainstream laptops andChromebooks tend to have 1terabyte (i.e. 1,000,000 megabytes)of data on their local drives. Theera of measuring big data inmegabytes now seems a distantmemory!

The turn of the millenniumconfirmed the need to control anever-expanding dataflow. PeterLyman and Hal R Varian performeda study in which they discoveredthat in 1999 the world hadproduced 1.5 exabytes of data – orapproximately 250 megabytes ofdata for every individual on theplanet (there are 1 million terabytesin an exabyte). By 2002, just threeyears later, a further 5 exabytes ofnew data had been produced. Thisis still relatively small compared toour current levels of dataproduction and management. In2015 IBM estimated that 2.5 millionterabytes of data were generatedeach day, compared to the 5million terabytes of data producedin a whole year in 2002.

HISTORICAL BACKGROUND

bit

Byte(8

bits)

Kilobyte(1000 Bytes)

Megabyte(1000

Kilobytes)

Gigabyte(1000

Megabytes)

Terabyte

(1000 Gigabytes)

Petabyte(1000 Terabytes)

Exabyte(1000 Petabytes)

Figure 1: Order of Bytes

3

BIG DATA

BIG DATA TODAY▪ At present, ‘big data’ is a

phrase used to describemassive volumes ofstructured andunstructured data that isof such scale that it isdifficult to process andanalyse using traditionaldatabase and softwaretechniques.

▪ Vagueness in its definitionis appropriate given thediverse use of big data. Itcan be used in anyindustry for any purpose,with the ultimate goal offacilitating more informeddecision making.

▪ Its definition does not relysolely on volume of data,but also in tandem withthe technology thatmanages the data. Forexample, big data may bepetabytes of data pointson the watching habits ofindividuals on Netflix.

There has been a profound shift infocus across a number of industriesin the last five years as more andmore companies understand theimportance of big datamanagement and how it can beutilised effectively. Netflix is facedwith a challenge of making eachone of their 36 million customersfeel like the 3.14 petabytes of videoavailable is designed specifically forthem. Not only in the applicationsdesign but also in their production;in 2010 Netflix analysed 30 millionplays, 4 million ratings and 3 millionsearches of those who watched theoriginal UK-aired ‘House of Cards’.An analysis was performed bytracking the viewing habits of itsown subscribers. They found thatthese consumers also liked filmsstarred in by Kevin Spacey anddirected by David Fincher. As aresult, they created ‘House of Cards’on Netflix, which for a time, was themost successful series on the planet.

This shift into data analytics is alsoapparent in the music industrywhere business inefficiency isendemic and big data is utilised in ahost of different ways. Some aretaking advantage of data in a similarway to Netflix and using it todetermine which music should bemarketed and where. Further tothis, managing big data effectively,securely and not intrusively, even onthe overwhelming scale of theglobal music industry, could solvethe problems of traceability andaccountability. And it would seemthat the industry has recognised theneed for big data management.Increasingly, music companies andplatforms are looking to makeacquisitions in the analytical and thepure technology arenas. Strategicmovements are being made by themarket leaders in utilising big datato establish a competitiveadvantage.

4

BIG DATA

BIG DATA TODAY

Announced Date Target Company Target Description Purchaser Company

15/10/2018 Asaii US music analytics startup specialising in using algorithmic data to spot up-and-coming artists before they hit the charts. Apple Inc.

28/03/2018 Sodatone Track streaming, social, touring, chart, and playlist data. Warner Music Group

11/12/2017 Shazam Entertainment Limited UK online media company developing mobile applications. Apple Inc.

12/09/2017 Soundcharts SASFrench provider of a platform that aggregates online music

consumption data and enables users to track social networks, charts, playlists and airplay data.

Alven Capital Partners SA; Kima Ventures;

GFC Global Founders Capital GmbH

17/05/2017 Niland French company that offers high performance music research and recommendation engines. Spotify Technology S.A.

26/04/2017 Mediachain Labs US provider of blockchain solutions for connecting applications to media. Spotify Technology S.A.

20/01/2016 Soundwave Analytics Limited Irish music sharing app. Spotify Technology S.A.

24/06/2015 Seed Scientific US data innovation and advanced analytics firm. Spotify Technology S.A.

19/05/2015 Next Big Sound Tracks the popularity of songs online and on social media. Pandora

21/01/2015 Semetric Limited UK company engaged in providing online analytics solutions to the music industry. Apple Inc.

06/03/2014 The Echo Nest Corporation US company providing music intelligence solutions. Spotify Technology S.A.

03/05/2013 Tunigo Swedish company that provides an online service for users to find, create, and share new music and playlists. Spotify Technology S.A.

Table 1: A selection of music Industry data acquisitions

In addition to the transactionsdescribed in Table 1, in April2018 Spotify acquired Loudr, aUS-based provider of scalablelicensing solutions that allowcontent creators, aggregatorsand digital music services toidentify, track and pay royaltiesto music publishers. A yearearlier, Spotify also acquiredSonalytic Limited, a UK-basedmaker of audio detectiontechnology that identifiessongs, mixed content andaudio clips.

Through both theseacquisitions Spotify hope toimprove its music ecosystemand improve the listeningexperience for consumers butthey also hope to create atransparent and efficient musicpublishing industry forsongwriters and rights holders.

Consolidation of companies in themusic business has been happening forsome years now. The OrchardEnterprises Inc., a US-based companyengaged in offering music, video andfilm show distribution services acquiredRoyaltyShare Inc. in March 2015.RoyaltyShare is a US-based companyengaged in providing Software-as-a-Service based revenue managementand reporting solutions toentertainment and media companies.At the same time they acquired KorrectSW Limited, a UK company engaged indeveloping and offering music royaltysoftware.

As shown in the table above, Apple hasacquired at least three companies thatuse technology and data analytics inthe music industry. Apart from themusic industry, other big dataopportunities that it has invested ininclude; Dark Sky, the most accuratesource of hyperlocal weatherinformation, Voysis, an Ireland-based AIstartup dealing with speech recognitionand digital voice assistance, and finallyXnor.ai, whose technology runs deeplearning models efficiently on edgedevices such as phones, IoT devices,cameras, drones and embedded CPUs.

Vast expansions in the quantityof data available has continuedexponentially until the presentday but it is only recently thatwe have found the means to siftthrough vast amounts of datain a valuable and effective way.The definition of big data isrelative to the software thatpreviously was unable tomanage such volumes andvelocities of data. This posesdoubt in future managementof big data; do we have theinfrastructure to manage bigdata in the future as both thevolume and velocity of dataincreases at an acceleratedrate? One technology gainingincreasing popularity inalleviating such doubts isBlockchain, which is addressedlater in this paper.

5

The Music Industry; Then and Now

A BRIEF HISTORY

In the early 1900s, the advent of mechanical musicproduction and recording created a series of new legalcomplexities. The copyrighting of songs quicklybecame an issue as recorded music hit themainstream. The US Supreme Court declared thatcopyright will only protect songs that can be read bythe human eye, whilst Congress passed a lawrequiring that a royalty be paid to the publishers foreach mechanically reproduced song. Although a legalrequirement, the issue of copyright and royalties wasthen, and remains today, the single biggestcomplexity in the music industry.

Having said this, throughout the 20th century, theproducts with which consumers used to listen tomusic were tangible, and although a challenge,tracking royalties was a relatively easy phenomenoncompared to the market today.

The 1920s brought radio, massed produced by theRadio Corporation of America (RCA). The developmentof polyvinyl chloride, known as ‘PVC’ or ‘vinyl’, in 1943briefly dented the popularity of radio but it was notuntil 1964 with the introduction of the cassette to themainstream music industry that the success of bothradio and vinyl alike began to be affected.

Royalties became an increasinglycontentious issue in the 1970s. USCongress declared that soundrecordings were worthy ofcopyright and amended the 1909Copyright Statute. This was inresponse to both vinyl and tapebootlegging; consumers could buyblank tapes and record copies ofmusic from the radio. Recordcompanies began an industry-widecampaign to curb home taping.

Efforts were once again hinderedwith the introduction of the SonyWalkman in 1979. Because of itsimproved sound quality andconvenience, it was widely seen atthe time as the device of choice forthe discerning consumer. 100% ofroyalties could not be collected forthe proportionate quantity ofmusic that was consumed.Frustrations were furthered in 1982with the release of the first CD: BillyJoel’s 52nd Street.

The late 1980s brought with it acombustible phenomenon centredon the invention of the MovingPicture Experts Group-1, Layer-3(MP3) in 1990. The MP3compressed digital audio files canbe compressed 12-fold to a size that

can be easily sent betweencomputers without compromisingquality.In May 1999 Napster, a peer-to-peersharing platform debuted, but onlytwo years later it shut downfollowing a number of lawsuits.

2003 marked the start of thestreaming revolution, led byApple’s launch of its online musicstore iTunes. Legal downloadingquickly became big business. In itsfirst year Apple realised close to$70m in legal internet sales andthe revolution had begun.Presently there exists over 30 musicstreaming platforms (that we areaware of), with YouTube having thehighest number of users at 2 billionin 2019. The number of paid musicstreaming subscribers in the worldwas 278 million1 as of April 2019. Inrecent years, music has becomeincreasingly accessible forconsumers, wherever they are inthe world either through liveperformances, radio, TV, internet orstreaming services. The landscapeis now one of great complexity, andcollecting the relevant data forartists to be paid appropriately hasbecome an enormouschallenge.

1877Edison

phonograph

1890Jukebox

1920Radio

1943Vinyl

1982CD

2003iTunes

2006Spotify

1964Cassette

1statistics taken from www.statista.com ‘Number of music streaming subscribers worldwide’

Figure 2: Timeline of listening products

6

The Music Industry; Then and Now

THE MUSIC INDUSTRY TODAY

58%

16%

7%

7%

4%

3% 2% 2%1% 0%

Youtube

NetEase

SoundCloud

Spotify

iHeartRadio

Pandora

Gaana

Apple Music

Anghami

Deezer

There has been a clear shift in the way in which weconsume music to one of convenience. Even relativelyrecent platforms such as iTunes, where consumers wouldpay $0.99 per song, seem far in the past. Streamingplatforms enable consumers to listen to all and any musicon a subscription basis. Where previously a consumerwould be billed for the purchase of a song, trackingconsumption on a streaming service is far moreconvoluted. A Spotify subscription costs $9.99 per month.To listen to the same music on iTunes, one would haveonly been able to listen to 10 songs in a month; equivalentto approximately 30 minutes of listening a month.However, having said this, iTunes listeners would actuallyown the music instead of simply renting it. According tothe International Federation of the PhonographicIndustry (IFPI), consumers listened to 18 hours of music aweek, or approximately 72 hours a month.

The music industry still facesthe same complex challenges ithas faced throughout its recentdevelopment. Royalties muststill be collected; however,inefficiency still exists.

Presently in the music industry,the artist/performer will onlyreceive fees for ‘public’ or ‘live’performances. Crucially to themodern artist, this also includespublic platforms such as radioand YouTube or a non-interactive subscription-basedservice such as Spotify orPandora. Producers are alsopaid a percentage of theroyalties for publicperformances by artists.

Clearly, the way in which artiststake their fees is highlyconvoluted and they only take aproportion of all potential fees,so it is vital that the industryrecognises how these feesshould be paid, to whom, inwhat capacity and in whatquantum.

A Performance Rights Organisation(PRO) is an association, corporation orother entity that licenses the publicperformance of non-dramatic musicalwork on behalf of the copyrightowners. These include: Ascap, BMI andSesac. Because of copyright, a licenseis issued which allows separate entitiesto play an owner’s music, but for a fee.

25.223.4 23.8

21.920.1 19.5

18.116.3

14.111.9

10.48.9 8.2 7.6 6.7 6.0 5.7 5.5 5.2

0.4

1.0 2.0

2.7

3.43.7

3.9 4.2 4.44.3

4.0 3.8 3.2 2.8

0.10.2

0.20.3

0.40.4 0.6 1.0

1.41.9 2.8 4.7 6.6

0.6

0.7

0.8 0.9 0.91.0

1.21.3

1.31.4 1.4 1.6 1.8 1.9 2.0

2.32.4

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

22.0

24.0

26.0

28.0

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

GLOBAL MUSIC INDUSTRY REVENUES ($BN)

Physical Digital (excluding streaming) Streaming PROs

This includes playing music inany and every public domain,such as a nightclub or a hotellobby. 95% of all music playedpublicly is licensed by Ascapand BMI.

Figure 3: Streaming services by user

Figure 4: Global Music Industry Revenues

Figure 3 data taken from Musically.com ‘How many users do Spotify, Apple Music and other big music streaming services have?’Figure 4 data taken from www.statista.com

7

The Music Industry; Then and Now

MARKET INEFFICIENCY

By the end of 2018, according to Rolling Stone magazine, total music revenues worldwide reached new heightsof approximately $43 billion a year, and approximately $50 billion the year after. The disparity between thisamount and the amount shown in Figure 4 on the previous page, is due to black-box revenues collected byPROs. The definition of black box revenue is money that has been collected but not attributed to rights owners,artists or producers.

All these costs, and others, aresignificant, but they are not thereal reason for market inefficiencyin the music industry. Uncollectedrevenue is not part of black boxrevenue. Utopia Music estimatethat 50% of all music revenues gomissing altogether in the industry.

This stems from uncollectedrevenue, resulting from poor dataon consumption habits. This isdiscussed in the section on UtopiaMusic.

The highlights of inefficiency resultfrom, 1) problems in trackingcopyright in the new age of musicconsumption, 2) digital music iseasy and effective to copy, 3) thequantity of new musiccontinuously released is enormousdue to streaming platforms andnew production technology, and4) the amount of data that shouldbe tracked is very large and needsa lot of computing power. There isa pressing need for an efficientway to track this amount of datareliably.

To pay out music revenues,PROs must obtain accurateinformation about where musicis consumed, by whom and inwhat quantity. Presently, themethods of capturing thisinformation are not data driven.Platforms, such as Spotify, aremeant to disclose informationabout how music is consumed.Although some platforms doprovide this information, thereare many which do not discloseaccurate data, and others arelargely invisible or opaque toPROs. The estimated $50 billionfigure includes streamingservices, CD sales, radio plays, liveevents and advertising. Of thisfigure, the artists who generateand/or perform the music onlytake approximately 12% or $6billion.This huge ratio imbalance occursas a result of many factors butparticularly: the significantexpenses involved in theproduction and distribution ofmusic; the high costs associatedwith running record labels; PROcosts; and the costs associatedwith the likes of streamingplatforms and satellite radio.

▪ An estimated 50% of revenues are unclaimed.

▪ The music industry is currently worth approximately $50 billion.

▪ Artists only receive approximately 12% of music revenues.

▪ Collecting royalties for artists is crucial.

▪ Asymmetric information exists on how and where music is consumed.

Composition Copyright

SongwriterCreating a song

Figure 5: Copyright Structure

Music Consumed

Sound Recording Copyright

Artists/BandsRecording a song

Copyrights in the Music Industry:Composition & Sound Recording

8

BLOCKCHAIN

Starting in 1991, Blockchain wasdeveloped over the next 17 years bytwo individuals: Stuart Haber andScott Stornetta. Their goal was totimestamp digital documents sothey could not be backdated ortampered with. Blockchain wasfirst introduced to serve as thepublic transaction ledger for thecryptocurrency, Bitcoin. It hit themainstream in 2009 when theunknown Satoshi Nakamotoreleased the Bitcoin whitepaper.

Intuitively, Blockchain is a chain ofblocks, where each block containsinformation. The information isvery difficult to change once insidea block, and must be approved byall participants of the blockchain.Each block has 3 components: thedata stored within it, it’s ‘hash’ andthe ‘hash’ of the previous block.The data within a block depends onthe type of blockchain. Forexample, Bitcoin blockchainscontain information on thetransaction – who pays who andwhat amount. But the type of datacan vary depending on the purposeof the blockchain.

The ‘hash’ of a block is itsfingerprint, which identifies a blockand all of its contents. It is uniqueto that block only. When a block iscreated, its own fingerprint, thehash, is calculated simultaneouslythrough a series of mathematicalequations. When information in ablock is altered, the hash alsochanges. A chain of blocks iscreated in which the hash of theprevious block is also stored in thenew block. This is the premisebehind the security of blockchain;changes will always be detected.When a block is altered, the nextblock is no longer valid as the hashfor the previous block will no longerbe correct. The only block not tocontain the hash of the previousblock is the first block in the chain –which is known as the ‘Genesisblock’.

Blockchain’s development has ledto its use in a number of differentindustries which handle big data.One such industry is the musicbusiness..

A SOLUTION TO INEFFCIIENCYGenesis Block

Data

Hash

Previous hash

Figure 5: Block composition

Figure 6: Blockchain composition

Blockchain has the capacity for storing vast amounts of dataover a long period of time. It’s evolution led to new possibilitiesin managing big data securely, and for some industries has beenthe missing piece in advancing the industry to its next phase.

9

UTOPIA MUSIC

Utopia Music estimates that only50% of attributable revenue isclaimed in the music industry.Furthermore, it often can take upto two years for artists to be paidwhat they are rightfully owed.Given that total earned revenue inthe music industry by the end of2019 reached approximately $50billion, there is potentially a further$50 billion in the industry. Withartists owed 12%, this equates toapproximately $6 billion.Utopia monitors social mediaplatforms, public TV channels,streaming platforms such asSpotify and Tidal, andapproximately 128,000 radiostations globally (even analogueradio stations can be monitoredthrough analogue antennae ineach country). Data is collected onwhere a song is played, by whichentity and at what date and time.Utopia even have the possibility totrack the length of consumption ofa copyright. A song can berecognised through its own‘fingerprint’ as well as its metadata.Essentially, every song has someunique characteristics and thesecan be identified by taking asample spectrum during playback.

Utopia take 100 samplings persecond per song and thencompare its uniqueness betweenpeaks in the song’s spectrum. Forexample, one second of a songmay replicate the same second as100 other songs. They then addanother second and see whichsongs (from the original 100) havethe same two seconds as this song;there may now be 30 which are thesame. This continues in singlesecond bursts until they are certainthe song has been correctlyidentified and the fingerprint ismatched. This process happensautomatically via their recognitionplatform.

By the beginning of 2019, Utopiawere collecting over 6.5 milliondata points every day, that equalsto about 600 million data pointsper quarter. By the end of 2019,they had an estimated 3.2 billiondata points on their platform.

INDUSTRY PIONEERS• Utopia Music is atechnology firm thatmonitors global musicconsumption andcopyright data in orderto solve the inefficiencythat the musicindustry faces inpaying music rightsfairly.

• They have recogniseda solution to thisinefficiency can befound using big data.

• They aim to capturecomplete data on howmusic is consumedglobally so that thoseowed music royaltieshave the ability toobtain this informationfrom Utopia and canthen determine howmuch they should bepaid.

Utopia Music is an example of a company utilising blockchain in their mission to solve the market inefficiency thatexists in the music industry. Utopia Music designed and owns its own exclusive platform to achieve its goal.Blockchain facilitates this and differentiates it from competitors also aiming to create greater efficiency in the MusicIndustry.

10

UTOPIA MUSIC

Utopia constantly generatefingerprints for new songssimultaneously as they are released.For example, they manage to keepup with the 50,000 new songsreleased by Spotify every single day.The sheer volume of data isextraordinary.

Management of this vast data storeis not easy. Utopia have recognisedblockchain as a convenient tool inmanaging big data, and haveintegrated it into their platform byusing decades of expertise intechnology and software. By usingblockchain, Utopia can securelystore data in a way that it cannot bealtered or tampered with.

Utopia have demonstrated how bigdata can be used alternatively in themusic industry. By effectivelyrecording data on exactly how andwhen music is consumed, there areseemingly endless possibilities inextracting information to benefitconsumers, producers and artists,who can verifiably understandwhere their music is consumed andin what quantity.

This information can provide anyartist with the ability to easily makeinformed decisions on where toschedule their next tour in a countryor area (they may have otherwisebeen unaware of) where their musicis being consumed in high volumes.

The genre produced may evenbe influenced as artistsunderstand exactly which of theirsongs are listened to and in whatquantity. This may push them todecide what music to nextproduce.

In the case of promoter, Utopiawill enable them to see whatgenre or artist are most popularin a certain area, and couldtherefore book the appropriateartists as a result.

These are only a few of thebenefits that Utopia and big datacan bring to the music industry.It seems indisputable that theycan remove market inefficiency.This can be extended to anumber of different industries.

Figure 7: Utopia’s method

SPOTIFYTop List Entries

+6mnFACEBOOKReactions

+10mnRADIO STATIONS

Collection

+128,000RADIO STREAMS

Collection

+500mn

Competitor What they do Why they are differentKobalt Music Group is building an integrated range of

music services to empower creators.While KMG focuses on the digital world,

Utopia Music's music usage and social media tracking capabilities go well beyond.

WARM monitors radio to help artists discover fans, to taylor marketing campaigns and accelerate royalty

collection.

WARM tracks circa 25,000 radio stations globally while Utopia tracks close to 130,000.

Soundcharts is a music data tracking platform that offers real-time airplay, playlist, charts and social media

monitoring.

Despite an initial similar offering, Soundcharts only tracks approximately 1,600 radio stations.

BMAT is a music monitoring and reporting company that tracks radio, TV, and venues globally and helps clean metadata stemming from streaming services.

BMAT only tracks approximately 5,000 radio stations.

Table 2: Utopia Music’s competitors

Providing real time reporting & intelligence

Payment Rail

Consumption Database

-Copyright Database

Collecting Consumption

Data Application

PROs, publishers & Right Owners

Potential for +100% in revenues. Cutting

payment time from 18 months to 24 hours. Reducing the cost

30% or more.

RADIO CHANNELS

11

THE FUTURE LANDSCAPE

COVID-19The impact of the Coronavirus hasbeen unprecedented in it’s globalimpact both socially andeconomically. The future globallandscape may change indefinitelyas a result.Big data provides one of manysolutions working collectively tosolve the global crisis, and thisseems evident in the responsetaken by governments andindustries as they look to employlocation-tracking technology.

Countries across Europe arecreating their own coronavirusapps to battle the spread of theillness, and now Europe’s dataprotection watchdog is calling for asingle Coronavirus app to be usedacross the EU. New surveillancebased apps could aid to mitigatethe spread of Coronavirus ascountries aim to come out oflockdown. Each individual’swhereabouts may be tracked, andthe distance between individualsmeasured using Bluetooth.

If it becomes apparent that aperson has contracted the virus, anapp could easily alert all those whohave come into close proximitywith that individual to get testedand to isolate themselves.

Such drastic measures may benecessary, but raise issues aroundprivacy. It seems wise that thesemeasures should be temporaryand limited.

Although big data clearly providessolutions to a variety of dilemmasand inefficiencies facing the world,those who take advantage of ithave a responsibility to use it withcare and to protect the privacy andbest interests of the consumer.

▪ By February, China hadreleased a close contactdetector app. Users arealerted if they have beennear a person who hasbeen confirmed orsuspected to have thevirus.

▪ In April Russia deployedan app to track themovements of people inMoscow whom have beendiagnosed withcoronavirus.

▪ European countries nowturn to their owngovernments to deploysimilar data handlingapps, but are faced withissues surroundingauthoritarianism andprivacy. An example of thisis the UK Government’s‘test, track and trace’programme.

▪ Big data means bigresponsibility.

12

THE FUTURE LANDSCAPE

Big data has become increasinglyprominent as a mechanism insolving inefficiency in a variety ofindustries. It seems clear that themusic industry in particular isgrasping for a solution to thestructural inefficiencies inherent inthe current system, where anestimated 100% of its currentrevenues are lost. If Utopia are trulysuccessful in making their solutionwork, then the music industry willface an upheaval like never before.Performers, songwriters, lyricists,producers and music rights ownerswill know exactly how their music isconsumed – when, where, how andby whom .... all over the world. Andthey can then justifiably and withcertainty claim their share of themissing revenue. At that point,many of the facilitators, perhapsincluding PROs and other middlemen, would no longer be needed.Big data is becoming increasinglyimportant and the music industryis starting to utilise it to allow theconsumption of music to be moretransparent and efficient.

It seems the future of the industryrelies on total symmetry ofinformation. Will big data allow usto draw absolute and unbiasedinformation for all those involved inthe production and consumptionof music? Perhaps total symmetryof information will causedeterioration in creativity in musicproduction as producers employbig data to create music just asNetflix did in their creation ofHouse of Cards. This raises a deeperquestion. Is human creativityrequired in the creation of an artform such as music, or, caninformation drawn from big datatake its place?

For the foreseeable future,symmetry of information, aided bybig data, will be key in enablinginformed decision making andimproving the quality of life for theconsumer.

Conclusion▪ A wide range of opportunities

pose themselves whenutilising big data.

▪ If successful, Utopia will haveprovided access to a furtherestimated $50 billion of extrarevenue for the musicindustry.

▪ Those who do not takeadvantage of big data may beleft behind.

▪ The future of the music, andother industries, will beshaped by big data.

▪ COVID-19 has caused a globalcatastrophe for manyeconomies. In a shiftingworld, where new possibilitiesare now considered, one ofgreater automation seemslikely. Utilising big data toenable business decisions inall industries post the globalpandemic, seems increasinglylikely.

Aalto CapitalMay 2020

This discussion material (the “Report”) is produced by Aalto Capital LLP (”Aalto Capital”), which is authorized andregulated in the United Kingdom by the Financial Conduct Authority (“FCA”). The Report must be treated as amarketing communications for the purpose of Directive 2014/65/EU.Although Aalto Capital is not subject to any prohibition on dealing ahead of the dissemination of investmentresearch, Aalto Capital applies this prohibition through its internal systems and controls. The analyst or analystsresponsible for the content of the Report certify that:(1) The views expressed and attributed to the research analyst or analysts in the Report accurately reflect theirpersonal opinion(s) about the subject securities and issuers and/ or other subject matter as appropriate.Information that is non-factual, interpretive, assumed or based on the analyst’s opinion shall not be interpretedas facts and where there is any doubt as to reliability of a particular source, this is indicated; and(2) no part of the research analyst’s or analysts’ compensation will be directly or indirectly related to the specificrecommendations or views contained in this research report and, as far as they are aware, there are norelationships or circumstances (including conflicts of interest) that may in any way impair the objectivity of thisrecommendation, and that where any such relationship, conflict or circumstance exists concerning any financialinstrument or issuer to which this recommendation directly or indirectly relates, has been disclosed. Thisstatement applies equally to any persons closely associated with such analyst.Aalto Capital has effective organisational and administrative arrangements set up within the firm for theprevention and avoidance of conflicts of interest with respect to research recommendations, includinginformation barriers. For information regarding potential conflicts of interest and the general approach taken byAalto Capital in relation to conflicts of interest, please contact robert.edwards@aaltocapital.co.uk.The Report is for the use of the addresses only and is not intended for nor should be disseminated to RetailCustomers as defined in Directive 2014/65/EU. It may not be copied or distributed to any person without thewritten consent of Aalto Capital and may not be distributed or passed on, directly or indirectly, to any other classof person, Aalto Capital may in its discretion distribute this document to any other person to whom it couldlawfully be distributed by an unauthorised person and without its consent being approved by an authorisedperson.Each Report has been prepared using sources believed to be reliable, however we do not represent that it isaccurate or complete. Neither Aalto Capital, nor any of its partners, members, employees or any affiliatedcompany accepts liability for any loss arising from the use of the Report or its contents. It is provided forinformational purposes only and does not constitute an offer to sell or a solicitation to buy any security or otherfinancial instrument. While Aalto Capital endeavors to update on a reasonable basis the information and opinionscontained herein, there may be regulatory, compliance or other reasons that prevent us from doing so. Theopinions, forecasts, assumptions, estimates, derived valuations and target price(s) contained in this material areas of the date indicated and are subject to change at any time without prior notice.The Report does not constitute a personal recommendation and the investments referred to may not be suitablefor the specific investment objectives, financial situation or individual needs of recipients and should not be reliedupon in substitution for the exercise of independent judgement. Past performance is not necessarily a guide tofuture performance and an investor may not get back the amount originally invested.

Aalto Capital15 Flood StreetLondon SW3 5STUnited Kingdom

www.aaltocapital.co.uk

Aalto Capital LLP, 15 Flood Street, London, SW3 5ST, United Kingdom

Registered number OC364179. Aalto Capital LLP is authorized and regulated by the Financial Conduct Authority.