FEATURE1 September 2011

Face the music

Features Trends

As the way we listen to music changes, record labels are learning to listen back. Robert Bain asks research boss Hanna Chalmers how Universal Music is bringing the customer’s voice into decision-making.


A lot has changed since Hanna Chalmers joined Universal Music as head of research in 2007. “Research is completely central to everything we do as a business,” she says. “And you couldn’t say that four years ago.” At that time the research team was half the size it is now, and its work was “more tactical, reactive research rather than creative research”. Nowadays much of Chalmers’ work is done through Speakerbox, a 3,000-strong community panel run by Sparkler. “We wanted to start having a more direct conversation with music fans. In the past the music industry has been challenged for maybe not listening to its customers as much as other sectors. So we wanted to start using our understanding of them to inform the decisions we make across the business.”

Speakerbox, the first community of its kind run by a major record label, opened in September 2010 and is used for qual and quant research addressing strategic issues, as well as tactical questions about what acts people are talking about or how promotional campaigns are doing.

“We wanted to start having a more direct conversation with music fans – to use our understanding of them to inform decisions across the business”

Hanna Chalmers

Big and small questions
“We definitely wanted more than just a survey tool. We wanted to understand why people behaved the way they did, rather than just how many.” There’s a balance to strike, Chalmers says, between letting members hear new music and chat about it – which is what they signed up for – and research that addresses strategic business challenges – which is why Universal set up the community.

For this year’s Brit Awards, researchers were able to watch the ceremony live with Speakerbox members and talk about what they did and didn’t like. Another project is looking at why the number of UK artists who break (that’s music industry talk for selling 100,000 copies of their debut album) has fallen sharply in recent years. In 2008, 25 managed it. In 2010 only nine did. This is one of the “big strategic questions” that Universal is trying to grapple with, as the way people buy and listen to music continues to change.

Much of this comes down to technology, which gives us access to so much more music than ever before, when we want it, where we want it and often for free. Chalmers says: “People are taking much longer to discover an artist, and longer still to make a decision on whether or not they’re going to buy. There is a huge array of artists, so it’s much more difficult for individual ones to cut through. That has real implications for the way we market our artists. Traditionally in music it has been a two-week window of heavy marketing. What’s quite clear is that that should be shifting in order to reflect how fans are discovering music and deciding to purchase.”

Younger music fans, in particular, tend to listen to a much wider range of artists than previous generations, who focused on a smaller number of favourites. “In the past people would badge themselves with the artists they liked – it would define them, whereas now you don’t see that. If you scroll through their music collections you’ll see a huge array, across genres, and consequentially they’re not going to be completely obsessed with all those artists. They tend to flit between artists.”

The use of online music streaming services is another area of interest – particularly as Universal is not on friendly terms with all of them. The label licenses Spotify to stream its music in exchange for royalties, but is suing Grooveshark (which allows users to upload their own content for streaming, like an audio version of YouTube) for copyright infringement.

“I suppose in the old world, the need to understand [how people bought and listened to music] wasn’t there, because there were only CDs,” says Chalmers. “You didn’t need to wonder how they were consuming because you knew. Now, there are a multitude of ways people can consume music.”

Bringing fans on board
Speakerbox has also been used for co-creation, a technique that Chalmers says she was “fairly cynical” about at the outset. “I needed to be convinced,” she explains. “There are a lot of agencies that love throwing the word around in a way that doesn’t wash with me. My concern could be that if you just ask your customers you’re less likely to be really innovative.”

Still, she’s open to co-creation as a way to “refine concepts”, and recently worked in conjunction with Speakerboxers to develop a compilation album designed to appeal to the 16-18 market. They needed to bring fresh ideas to a market that has suffered from the decline of high street music retailers that sold the bulk of compilation albums. The target audience was also a hard one to reach for research, so tapping community members was the ideal approach.

Even so, Chalmers is still cautious about how co-creation should be applied. “It’s one of many ways of understanding our market. My view as a researcher is that consumers can be great sources of stimulus, but I really don’t feel comfortable with the thought of them coming up with ideas. It’s our job to innovate. Companies employ brilliant people and it’s our team’s role to bring the world of the consumer into the company, not to expect that the consumer’s going to do your job for you.”

The different types of projects that Speakerbox is used for has gradually grown, and the research it generates is now contributing to “pretty fundamental shifts in the business”. For example, it helped Universal Music make the decision to introduce ‘on air/on sale’ – releasing records for sale at the same time they’re made available to radio stations (read more on how Universal dealt with that here).

But perhaps the biggest change brought by Speakerbox has been in the way Chalmers’ internal clients at Universal respond to research. Where it was once a “sense-checking mechanism”, it is now driving decisions. “It has been completely embraced by the whole company,” she says. “It’s changed the way people do research and think about research.” The biggest difference? “Speed.”

“Our team will regularly get calls in the morning needing insight by the afternoon. And that’s where the real value of Speakerbox comes into play, because that just wouldn’t have been possible at all in the past. It comes top of mind much more often. Because the industry works to such short timeframes, in the past if they said, ‘I need some research next week on Boyzone,’ or whatever, I’d have to say, sorry, it’s going to be too tight, I can’t do it. Now they know that if they call me, we’ll sigh heavily, but we can do it very quickly.”

She’s conscious that traditional research can often seem “dusty immediately”, and having a community on-hand can be a way to avoid this. “To be able to talk my internal clients through the research we’ve done on Speakerbox is a much easier sell for me, because it’s living and immediate and human.”

As a result of this, Speakerbox is being used by “everyone from the chairman down. Even people who don’t work for the company, like artist managers. It reaches beyond the walls of Universal”. The work on breaking UK artists has been shared with music industry trade body the BPI, and discussed with MPs interested in its implications for the industry and how labels are responding.

Raising research’s profile
Before she joined Universal Music, Chalmers worked as a planner at Mediacom and spent seven years at the BBC, working on Radio 1 and 1Xtra and on research into how children and teenagers use digital media. She’s familiar with how research can sometimes “be perceived in the wrong way” in creative organisations.

“The big fear in something like music is that you’d do research to find out who to sign – we wouldn’t touch that. A&R understand markets, music scenes, that’s their job. We do not get involved in that. But what we can do is show where there are shifts in sales, or away from one genre to another.”

As it turns out, the success of Speakerbox has helped to ease these relationships, because other parts of the business have gained a better understanding of what Universal’s research team does (and doesn’t) do.

Speakerbox can also offer a reality check to people who are immersed in the world of music. “Particularly when marketers are working on an artist and building a relationship with that artist, it can be quite difficult to see how music fans are responding to them. Just going on to Speakerbox and asking about them, it can be like, ‘Oh right, not everyone knows about them. That’s weird.’ These marketers have been talking about an artist for a year, and that’s all they think about, and suddenly they realise that awareness levels are in single digits.”

Other parts of the Universal business are now looking with interest at Speakerbox. Although a panel is already up and running in the US, Chalmers says “it’s nothing like ours. It’s a straight survey tool”. Although the community is limited to the UK, it is already being used for a lot of international work.

The Speakerbox community is a pretty serious investment in understanding consumers – something that has been lacking in an industry that was slow to come round to the realities of the internet because of fears about piracy.

But perceptions among Speakerbox members of record labels and what they do are “more positive than you might sometimes imagine from what you read in the papers,” Chalmers says. “They also really understand and respect the initiative in itself.”

Chalmers brushes off questions about the mistakes of the music industry’s past, saying: “I can tell you how we think about it now, which is that we want to develop – or invest in, or support – legitimate digital services that are so good that they’re a better option than illegitimate services. And we can only do that by understanding what people want. It’s as simple as that.”

Sparkler MD Laura Roberts on community spirit

“From a research perspective what’s most interesting about the Speakerbox community is what digital has enabled in the world of research. Qualitative and quantitative research used to be completely at arm’s length, and I think digital has allowed for much more sophisticated fusing of the two. And that’s quite an interesting new vision for what research means today and its capabilities.

“Part of the value of what Speakerbox has done is to allow a company that’s perhaps less familiar with insight to see the value of insight as inspiration. It’s not telling people what to do, but the liveness of it and the proximity of the consumer means that it becomes more inspiration as opposed to direction.

“Consumers can be a very important source of inspiration and working with them can open up ideas that weren’t previously there”

“Of all the sectors we work in, music is one of the fastest moving, perhaps second to radio. That’s really interesting – what is the role for insight in an industry that’s moving quite so fast? It has to move as fast as the industry itself.

“It often starts with people realising the value of using the community through the speediness of it. Then they get further into understanding the breadth that it can offer them. Consumers can be a very important source of inspiration and working with them can open up ideas that weren’t previously there.”

Read more here on how Universal and other brands are using customer communities and co-creation to develop and refine strategies, products and ideas