One of the dynamics of the intensifying competition around streaming music is the way acquisitions of the companies servicing this space can send people scrambling for new partners.
When pre-Apple Beats Music bought D2C firm Topspin, Spotify turned to BandPage for its merch sales feature. When Spotify bought The Echo Nest, the latter’s clients (Rdio, Rhapsody, MixRadio and more) had to find or develop new solutions. And recently, Spotify has seen both its external analytics partners – Semetric and Next Big Sound – bought by Apple and Pandora respectively.
That’s a useful – although it shouldn’t be the only – lens through which to see Spotify’s latest acquisition: a New York-based “data-centric consultancy” called Seed Scientific.
As the announcement press release notes, the company’s data and analytics technology had clients including Audi, Unilever and the United Nations, but as every report on the acquisition quickly pointed out, one of its other customers was Beats Music.
Spotify confirmed to TechCrunch that Seed Scientific will no longer be supplying those other customers, although with no details on what the company did for Beats, we’d advise caution when gauging how disruptive the deal is for Apple.
Just as importantly, what does Spotify want with an analytics company when it already has The Echo Nest? According to Seed Scientific’s announcement, it will “become the foundation of a new Advanced Analytics unit at Spotify that combines cutting-edge math, science, design, and engineering to craft insights, models, and tools with data”
It will be based in New York with the ability to, as TechCrunch paraphrases Spotify’s view: “teach Spotify what to suggest people listen to, who they should follow for recommendations, where artists’ fans are so they can plan their tours, or what brands’ ads will resonate most with which users”.
Having two analytics-related units and calling one of them “advanced” may sound like a recipe for dissent, but we’ll await more signals on how Seed Scientific and The Echo Nest will work alongside one another – it’s possible to think of several ways to divide responsibilities that would suit both.
The acquisition reflects a wider issue in streaming music, though: the importance of what goes on under the hood around analytics to the coming battle in this market.
While most media attention inevitably focuses on consumer features, artist exclusives and entertaining smack-talk, the race to become the service that best understands its listeners and uses that understanding to drive new features and recommendations is on.