Transcript: Where Will Digital Lead Analog Next?

Interview with Cherie Hu

For podcast release Monday, January 29, 2018

KENNEALLY: Having already turned media and retail upside down, Amazon and other internet businesses are preparing to turn those worlds inside out, as well. Welcome to Copyright Clearance Center’s podcast series. I’m Christopher Kenneally for Beyond the Book.

Over more than two decades, Amazon has shaped the customer shopping experience both on the web and on the street – as an online-only e-retailer opened in 1994 and then, beginning in 2015, as a brick-and-mortar concern, operating Amazon Books and since last summer, Whole Foods, the national supermarket chain.

On a Christmas Eve visit to a crowded Amazon Books in Manhattan, Cherie Hu realized that Amazon had flipped the table on the analog environment of traditional bookselling. A writer and analyst covering the music industry, Hu recognized how the company’s legendary reliance on consumer data had shaped the shopping experience, with important implications for media and entertainment business. Cherie Hu joins me now from New York City. Welcome to Beyond the Book, Cherie.

HU: Hi, Chris. Thank you so much for having me.

KENNEALLY: Well, we’re looking forward to chatting with you, and before we get into your last-minute shopping stop at Amazon Books, I wanted to share with listeners that in September, at the age of 21, you received the Reeperbahn Festival’s inaugural award for Music Business Journalist of the Year. Based in Hamburg, Germany, the Reeperbahn Festival is Europe’s B2B platform for the music and digital industry. It’s the kind of European doppelganger for Austin’s South by Southwest Interactive Festival.

So congratulations on that, and congratulations, too, on your graduation from Harvard, which came just months before that award. You there earned a degree in statistics. So we can begin to see how your various interests help sharpen the excellent insights you always present in your written work as a tech columnist for Billboard and a music columnist for Forbes.

Before we get into this, I wanted to start off by saying you really are data-driven, just like Amazon, I think.

HU: (laughter) Yes, I am, and thank you so much.

KENNEALLY: Tell us about that. Why is a journalist today reporting on the music industry, but the digital environment at large – it seems obvious, but I’d like to hear your perspective. Why is data important?

HU: Oh. Yeah, I think, needless to say, there’s so much data coming into the music industry now with the transition to streaming and even with the first transition to iTunes – yeah, and even with the rise of Napster, there’s just all this data coming in about music consumption. And at least on the label side and management side, this is a constant stress point for a lot of them in terms of being able to process this overwhelming amount of data and make sense of it in actually a digestible and actionable way.

And I guess I’ll talk about this later when we discuss this journalism as a service concept, but I think journalists can really provide a lot of value by looking at what data is out there, sort of ingesting it, analyzing it, putting their own perspective on it in a way that gives people working in the music industry a new way to think about all these different data sources.

KENNEALLY: Absolutely. It’s fascinating, and it is not only of concern to the music business. The book business certainly could learn a great deal about its customers by looking at the data that it has. The problem is it doesn’t have as much data as it should have.

But let’s talk about this in a real physical example, and that’s the interesting piece. We’re discussing digital, but we’re looking at the physical world. Your blog post for your newsletter, Water & Music, looked at this, and it starts with a visit to Amazon Books on Christmas Eve.

HU: Yes, it does. Yeah, so I live a couple blocks away from the Amazon Books store, and I just noticed how crowded it was – and not only that, but a couple of days after visiting that store, I also bought a book for myself from there that day, and I started reading it. And the way that I chose that book in that physical bookstore, because of the way that store’s formatted, was the same way I would choose a book on Amazon, which is looking at the user ratings.

So what Amazon does in their bookstore is they take certain features from their website and sort of print it out on a card and place it underneath every single book. Underneath every single book, you’ll see a rating out of five stars. For select books, if, say, 95% of users rated it more than four stars, you’ll also see that piece of information. There’s a whole shelf dedicated to books that have been reviewed more than 10,000 or 15,000 times if you’re interested in tapping into what more people are talking about these days. I was fascinated by how the physical experience was sort of imitating the digital experience.

In my newsletter, since I write primarily about the music industry, I noticed this was something that Spotify is starting to do to the live music world.

KENNEALLY: Before we get to the Spotify thing, I want to just explore the Amazon Books experience, because I think listeners would be fascinated by this. As you point out, the physical bookstore begins to look more and more like the experience online. There are even displays – I haven’t been to the store myself, but I’ve seen photographs – there are even displays that have an arrow pointing to one book that says if you like this book, you may like these, which is just like the experience on Amazon. All the books face out. There are no spines looking out at people. It’s, again, just an experience where you see the cover of every book you might be considering. This is what you point out is a kind of ingenious reversal of something called skeuomorphism. Tell us what that is.

HU: Yes, so skeuomorphism is a common concept in the design world. It’s the act of making digital objects represent their real-world counterparts. Actually, to bring up one of Amazon’s rivals, Apple does a really good job with this. And actually in the reverse direction, Apple’s iBooks app is a typical example of skeuomorphism. If you open the iBooks app, you’re presented with a digital wooden shelf. Yes, the books are facing outward, not the spine like in a traditional brick-and-mortar bookstore, but even just that concept of displaying books on a shelf makes it more familiar to users of Apple devices, because it imitates the physical world.

The other example that I brought up in my newsletter, I guess on the music side, was if you’re a DJ or producer and you’re using software on your computer, most likely it will look like tools that are already available in the physical world, like samplers with knobs and sliders.

KENNEALLY: It’s fascinating. And you don’t think about it as a consumer of these kinds of applications from time to time. You just sort of expect it, because that’s what you’re comfortable with. But what you have said in your newsletter post is that this is something that Amazon can do and execute on with such authority because it is drawing on this customer data that it has. So it is able to put those cards below books because it knows enough about the books and about their customers to really say something clearly and with authority. That’s important.

HU: Yes, it is very important, and this is a problem that I know any brick-and-mortar store has. The issue of understanding the consumer is an ongoing issue for brick-and-mortar stores of any kind, whether you’re talking about bookstores, vinyl record stores, stores selling any sort of physical object or physical gear – that intimate knowledge of the consumer is really difficult, just because historically they are not digital-first businesses, which Amazon is.

What was really compelling to me is that the success of Amazon Books on this particular day and my satisfaction as a customer after the fact suggested that Amazon could provide added value in a physical environment that its competitors just simply could not, because they are not in the business of gathering data about their consumers.

KENNEALLY: Right. Let’s bring this, then, into the music world, where you’re most familiar. You take the example of Spotify. It’s interesting that you first cite the criticism that many users have of Spotify, that it doesn’t look enough like the old analog world. So there is a group of Spotify listeners who want it to be even more skeuomorphic than it is. You’re saying that’s kind of getting it wrong. This isn’t about liner notes or anything like that anymore. It’s about the playlists and bringing the playlists into the real world.

HU: Exactly. So from a financial standpoint, I feel like Spotify has definitely disrupted the music industry. It’s ushered in this new era of streaming, and it’s debunked a lot of people’s assumptions about what type of music is popular globally, about what people are looking for in a music experience, how they consume on a day-to-day basis, all of these things.

Understandably, for people who have been in this business for a very long time and who have lived through all of these different waves of technological disruption, they sort of want to hold back the reins a little bit and to make Spotify conform to what they are already familiar with, which – I think it is fair to say that skeuomorphic apps, skeuomorphic technology, is successful precisely because it is familiar and it strikes a sweet spot between what we already know and what we don’t know that we want. Having that skeuomorphic element is still important.

And you see Spotify trying to do that with certain integrations – for instance, at least on mobile, the way that they integrate with Genius, the lyrics site, and add real-time adaptations to the lyrics of certain songs and the way you have to swipe through the lyrics from left to right is a bit similar to the liner note experience from pulling those notes physically out of a vinyl record cover.

But yeah, I think the point is that now that Spotify is getting power and leverage in the music industry in a similar way that Amazon is doing in practically every other industry, you could say, its power will come from influencing the physical world. It won’t come from really conforming to what was already there before, but rather continuing to innovate, continuing to set new paradigms in music – not just in the digital sphere, but physically, too.

KENNEALLY: And what is happening – and you say it’s already happening, you expect to it accelerate in 2018 – is that music festival culture is rebranding itself as playlist culture.

HU: Yes, definitely. As I mentioned in my newsletter, I wasn’t actively searching for this. It actually just showed up on my feed. I’m a big fan of Boston Calling. I’ve been a couple of times. So I still get sponsored ads from them from time to time. I follow them on Facebook. And one of their latest ads reads, when you put your playlist on shuffle, does it skip from Tyler, the Creator to Fleet Foxes, from this artist to this other artist? If you go to Boston Calling, you can see it all. So what that ad is trying to do, in my opinion, is saying, oh, we know you listen to music on shuffle on Spotify. We know you have a playlist of these great artists that you really love. You can experience this playlist live. So they’re trying to align themselves with companies like Spotify that continue to gain new users internationally and continue to gain power.

I think the underlying philosophy is nothing new. I think people do like to go to festivals because it is sort of a buffet model in terms of paying a fixed price to access a wide range of artists and to discover new artists. That’s arguably very similar to Spotify’s business model of paying a fixed price every month to access millions of tracks. But just the fact that they’re saying this out loud explicitly now is really fascinating and telling to me.

KENNEALLY: It’s a wonderful observation, and we appreciate you making it for us, Cherie. We do want to end by talking about your approach to your work. Your career is just getting started here, and you approach it as a freelance writer as a service. I have to ask you what you mean by that. Why is journalism a service for you?

HU: Yes. So I guess I’ll start with a very brief – I’ll start by just talking briefly about how I got into writing, because writing was not a plan that I had in the long term at all. I sort of fell into it. I’ve been writing for Forbes for just over two years, and I ran into my current editor at a career fair. I had done a research project on music and tech at the time, and I had a lot of ideas that actually might be closer to the consulting or services side in terms of ways to use technology to help move the music industry forward to help artists. I was very passionate about that specific problem. And I was bringing this up with my editor, and he fortunately was really open to this. He was like, we need more people to write about streaming, about the latest trends in music and tech. That’s sort of how I got into writing.

So I never had a full-time staff position as a news reporter. My approach to writing is not news-driven so much as trends-driven and ideas and opinion-driven. What I mean by that is – say this one startup in the live space announces that they just launched their public beta or something. That’s really interesting to me, but more likely than not, I won’t write about that, because startups launch public betas all the time. There’s a new startup founded probably every single day. But if there are multiple startups, like four or five startups, in live music tackling the same problem, that’s a really interesting signal to me, so I automatically jump on that and I write a piece about why are all these entrepreneurs tackling this problem? Is this a problem the music industry should be thinking about?

That goes back to what we were talking about earlier in terms of having really good data analysis skills and that being really important, just because there’s so much going on in the tech world, and there’s all this data coming in, all these new companies coming up. I know for a fact that myself included, but I would say even more people working in the trenches at music companies, they’re really overwhelmed and they’re not really sure how to focus their energy. In terms of me providing lasting value as a writer, I want to provide value to those people who are working in the industry. I want to empower them to make better decisions. I don’t want to just write a press release that every other publication is copying as well. I want to provide unique value, and not just unique value, but also actionable value, such that if someone at a label reads my newsletter or reads an article, a trend piece that I write, they can say, oh, now I know whether this will be valuable for my clients or valuable for my job. That’s sort of how I approach.

KENNEALLY: It’s a great approach, and it really does leverage, as I say, a lot of the background you have. You’re also a musician. You studied at the Juilliard School. So you see music from the creative side as well as from the producer’s side, I suppose, the business side. But what’s interesting is the way that you point out that announcements are just commodities, if you will. What really we lack for is information and insights. And in a way, that’s the challenge of data. Data is just a great big pile of bits and bytes. It doesn’t mean anything. It doesn’t do anything. It doesn’t have any use for anyone until some human being, like Cherie Hu in this case, comes along and puts things together in a certain unique way that really moves things forward.

HU: Yes, and actually I think this is directly related to Spotify’s new power in the music industry. This is a very interesting point of debate, but a lot of people think that Spotify has replaced the traditional role of a lot of music critics. Back in the day, you would read a music critic – like you would read a column by a music critic to decide whether or not to listen to a song, and the music critic’s opinions would precede your purchase of the album or of the single. But now Spotify – the power of Spotify to deliver the right music to the right people at the right time and the complexity of the algorithms that go into that delivery is so much more powerful, so much more effective, and so much more scalable than anything that an individual human writer could ever do.

Where I see music journalism – the more artist-centric or album-centric critical type delivering value is in providing that wider context, which unfortunately Spotify cannot really provide right now – sort of is just a mode for discovery, but if you want to figure out more about an artist, you do still have to go to writers and to other forms of media.

KENNEALLY: We’ve been chatting today with Cherie Hu, who is the winner of the inaugural award for Music Business Journalist of the year from the Reeperbahn Festival and has been telling us about the way that the digital world is now influencing the physical world. Cherie Hu, thank you for joining us on Beyond the Book.

HU: Yes, thank you so much for having me.

KENNEALLY: Beyond the Book is produced by Copyright Clearance Center, a global leader in content management, discovery, and document delivery solutions. Through its relationships with those who use and create content, CCC and its subsidiaries RightsDirect and Ixxus drive market-based solutions that accelerate knowledge, power publishing, and advance copyright.

Beyond the Book co-producer and recording engineer is Jeremy Brieske of Burst Marketing. I’m Christopher Kenneally. Join us again soon on Beyond the Book.