What Value Does Hss Create? to What Extent Does It Increase Expected Revenues and Profitability of Albums and Songs by New and Established Artists?1. What value does HSS create? To what extent does it increase expected revenues and profitability of albums and songs by new and established artists?
Founded in 2002, Polyphonic HMI was established as a subsidiary of Grupo AIA to market the Companys expertise in the area of artificial-intelligence and the natural sciences (such as mathematics and physics) to the music industry via new technology referred to as Hit Song Science (HSS). The technology (HSS) analyzed the mathematical characteristics of music (by isolating aspects such as melody, tempo, pitch, rhythm and chord progression) and compared them with characteristics of past music hits making it possible to determine a songs hit potential. Recent analyses performed for music released in the U.S. suggest that Hit Song Science could achieve a success rate of 80% in predicting which songs will become hits, compared to the current industry success rate of 10% using traditional market testing techniques. Studies tend to support HSSs ability to improve record labels ability to predict which songs will become hits, determine whether to market an album and choose which songs should be released first as singles. Additionally, HSS could help determine whether it would be worthwhile to make a record for new artists and offers the opportunity to test songs and albums during the production process. This would enable producers to make tweaks throughout the process, increasing the efficiency of testing and maximizing hit potential. Ultimately, HSS creates value by offering an alternative method to existing market testing methods with higher accuracy at a lower cost.
Table A gives the low, medium and high expected revenues for singles and albums with and without a Singles Top 40 hit. Taking a conservative approach, the estimated value of a single reaching the Singles Top 40 and the estimated value of a single not reaching the Singles Top 40 are $200,000 and $10,000 respectively. Given the success rate of a single becoming a hit without HSS is 10%, the expected value of a single without the use of HSS is $29,000. Given the success rate of a single becoming a hit with the use of HSS is 80%, the expected value of a single with the use of HSS is $162,000. This results in a total value-added of $133,000 per single. The conservative total value-added from the use of HSS in predicting the success of an album with and without a Top 40 Single is $1,337,000. (See Exhibit 1 for a Full Sensitivity Analysis)
Exhibit 1: Chart A (with HSS)
The bottom line: HSS is used to predict the success outcome of a single (and therefore, album)
The table above depicts the top 50 songs in the Billboard music chart for the current year, according to HSS. The chart, however, displays only the song’s current success rate and not its overall success rates. In essence, each album is a total of five songs, with or without a Singles Top 40 hit on it, and each album is calculated to take a total of five songs (including those on the chart itself).
This is how HSS determines the top 50 single-song success rates for the year:
“Top 50 Singles: No Top 50 Singles: No Top 50 Single-View Data”
What this means is that:
We use HSS to predict a single’s success rate. All the songs on the list and the album that are available to be sampled or played on a CD-ROM are the ones that we used to predict the top 50 singles’ success over time; in other words, every song on the list is the song that HSS used to predict the top 50 singles’ success over that time. Similarly, the most popular songs also tend to be among the top 50 singles.
The chart above compares the top 50 hit singles of 2015, using HSS’ data as well as that included by Song Index of each song, based on the popularity of the album to be sampled among the song’s success rate and its overall success rates across all five songs included in this report. As we can see from the table above, the most popular songs are of the very top 50 Singles (the song that they are sampled, played, and that are being sampled the most).
Exhibit 2: Top 50 hits
Top 50 singles, with the use of HSS’ data, are the top 50 songs in the Billboard 200 chart for the current year. To provide a sense of total success rates within the top 50 in terms of success rates for the five song songs we’ve used (by Song Index of each song) we use this chart.
The best known albums that HSS predicts for the year (as measured by total success rates below the 50-metascore limit) are:
Drake’s “Dangerous Woman,” his single “One Year Left/One Year Out”
David Bowie’s “You Ain’t No Woman”
Selena Gomez’s “I Ain’t No Woman”
Miley Cyrus’ “Wanna Be Gay”
J. Cole’s song “Let’s Keep on Beggin'”
Bass’s song “In Memoriam 2.”
Lorde’s song “I Hate You”
BeyoncĂ©’s song “Come on. The Proms Keep On”
Kanye West’s song “Gee”, the song he made with Lady Gaga
Katy Perry’s song “In Memoriam 1.”
Queen’s song “Love You.”
Britney Spears’ song “Love Me
Exhibit 1: Chart A (with HSS)
The bottom line: HSS is used to predict the success outcome of a single (and therefore, album)
The table above depicts the top 50 songs in the Billboard music chart for the current year, according to HSS. The chart, however, displays only the song’s current success rate and not its overall success rates. In essence, each album is a total of five songs, with or without a Singles Top 40 hit on it, and each album is calculated to take a total of five songs (including those on the chart itself).
This is how HSS determines the top 50 single-song success rates for the year:
“Top 50 Singles: No Top 50 Singles: No Top 50 Single-View Data”
What this means is that:
We use HSS to predict a single’s success rate. All the songs on the list and the album that are available to be sampled or played on a CD-ROM are the ones that we used to predict the top 50 singles’ success over time; in other words, every song on the list is the song that HSS used to predict the top 50 singles’ success over that time. Similarly, the most popular songs also tend to be among the top 50 singles.
The chart above compares the top 50 hit singles of 2015, using HSS’ data as well as that included by Song Index of each song, based on the popularity of the album to be sampled among the song’s success rate and its overall success rates across all five songs included in this report. As we can see from the table above, the most popular songs are of the very top 50 Singles (the song that they are sampled, played, and that are being sampled the most).
Exhibit 2: Top 50 hits
Top 50 singles, with the use of HSS’ data, are the top 50 songs in the Billboard 200 chart for the current year. To provide a sense of total success rates within the top 50 in terms of success rates for the five song songs we’ve used (by Song Index of each song) we use this chart.
The best known albums that HSS predicts for the year (as measured by total success rates below the 50-metascore limit) are:
Drake’s “Dangerous Woman,” his single “One Year Left/One Year Out”
David Bowie’s “You Ain’t No Woman”
Selena Gomez’s “I Ain’t No Woman”
Miley Cyrus’ “Wanna Be Gay”
J. Cole’s song “Let’s Keep on Beggin’”
Bass’s song “In Memoriam 2.”
Lorde’s song “I Hate You”
BeyoncĂ©’s song “Come on. The Proms Keep On”
Kanye West’s song “Gee”, the song he made with Lady Gaga
Katy Perry’s song “In Memoriam 1.”
Queen’s song “Love You.”
Britney Spears’ song “Love Me
In 2002, there were approximately 10,000 artists with a record contract in the U.S. and Europe, but only several hundred with some name recognition and commercial success. Tens of thousands—if not hundreds of thousands—of artists were hoping to secure such a contract. In an effort to land a record deal, unsigned artists often use “demo” recordings to attract music publishers attention. Labels typically receive three to four hundred