Q&A: Alex White of Pandora’s music analytics company Next Big Sound

In May 2015, internet radio giant – and soon-to-be Spotify rival – Pandora, purchased Next Big Sound, the nine-year-old music analytics company that tracks social and streaming activity.

Having co-founded Next Big Sound during his last semester at Northwestern University in the US, and now as head of the company under Pandora, Alex White oversees a NYC-based team of about 25 data engineers, designers, product managers and data scientists who can not only measure an artist’s performance on multiple platforms and analyse listening activities, butknow when an artist is going to break globally 12 months ahead of time.

Speaking to TMN ahead of his appearance at next month’s Face The Musicconference in Melbourne, White chats about which Australian artists he predicts will break globally, why the terms of Next Big Sound’s acquisition weren’t disclosed, why he would change his very first investment offer if he could, and more.

What have been the biggest changes at Next Big Sound since the Pandora acquisition?

As you can imagine there have been plenty of changes moving from a 20-something person company in the Flatiron district of Manhattan to a 2,000+ person publicly traded company in mid-town, but overall it has been incredibly positive. One of the biggest changes has been around the path to innovation. As a startup you are constantly in experimentation mode as that’s how you iterate your way to product-market fit. As an independent company we were launching things constantly, not necessarily because they were ready but because we needed to get them out thedoor and which didn’t allow themthe time to mature and evolve. As part of a larger company we are still experimenting, except instead of launching things and needing them to work instantly we have the luxury of being able to roll out new experiments to a small group of users. We can then measure how they respond, take it back to the workshop to continue evolving and only graduate new products to a “full launch” once we have confidence through testing in the marketplace that they will most likely be successful.

How has your role changed?

While the mechanics have changed for me – instead of a board of directors, Ihave a boss. Instead ofventure financing rounds and operating plans, I have annual strategic planning — a lot of the autonomy in building and leading my team still remains. It’s frankly way easier to have a single boss than several board members to keep in sync. It also helps that my boss, Chris Phillips, the Chief Product Officer of Pandora has been fantastic to work with. Next Big Sound is the only product team in NYC (the rest is in Oakland) so I’m trusted to make a ton of decisions,large and small, as a result.

Why was the amount Pandora paid for Next Big Sound never disclosed?

Next Big Sound was Pandora’s first ever acquisition, highly unusual for a Billion dollar publicly-traded company 10+ years old. The deal was announced May 19^th2015, right before the opening of the stock market. There are certain minimum thresholds where acquisitions by publicly traded companies need to disclose and Pandora decided to keep the cards close to the vest.

The ability to predict which artists are set to ‘break’ using data alone is obviously a valuable tool for record labels and the music industry at large. Which insights would you say labels are using the most?

As sexy as the artist prediction models are, the largest use case for labels is optimizing the marketing for the acts they have already signed and that are on cycle with a release. NBS makes it easy to see social, streaming and video data in one place to understand how marketing and promotional events impact (or not) the numbers and services.

Have your partnerships with labels seen Next Big Sound’s core algorithm change over the years?

The changes have largely been around the amount of data we track (exponential growth since 2009), the sources we track (Youtube and Instagram instead of MySpace and iLike), and the amount of historical data we have collected which improves the models.

Which Australian acts does Next Big Sound predict will break internationally in the next few years?

Courtney Barnett and Meg Mac are two Australian artists with a high likelihood of global breakout according to their online numbers.

You were still at university when you co-founded Next Big Sound with David Hoffman and Samir Rayani. If you could go back, what formative decisions did you make back then that you would change?

Our first investment offer for $25k had some pretty draconian terms in it but we signed it anyway. Like a young band looking at a record deal, we were naïve and desperate forinvestment,so we would have signed anything. We had a fourth co-founder originally who we separated with before the launch of the site and I think we would have been more cautious towards him too.

Tell us about the initial meetings you would have held with the music industry after launching. What do you remember about the reactions you received?

Most of the people we met with had found us and reached-out cold because they were so thankful we started tracking all this data that they used to collect by hand. The early reactions were an awesome mix of appreciation, suggestions for all the features we needed to add, and requests to come meet their colleagues or bosses. The other reaction we got on the other end of the spectrum was old-school music industry folks (particularly managers) whodidn’t fully understand the value that we were trying to supply to them. Obviously those conversations continued to get better as “digital” became a larger outlet for music.

What’s your view on record sales and downloads versus streams, in terms of current music consumer behaviour?

Streaminghas been the future of music consumption for many years but people forget that it wasn’t until 2011 that digital eclipsed physical sales for the first time at most of the major labels. The world changes fast in many areas and slowly in many ways. With Pandora, Apple, Spotify, YouTube, Tidal and now iHeart and Amazon all offering streaming services the numbers are starting to be so compelling it’s hard to ignore. That said, people are slow to change so I imagine people trained on iTunes purchases will take some time to fully switch and may not make the leap to $9.99 plans as it’s more than most consumers have EVER spent on music – even in the heyday of the CD in the late 90s.