Streaming, Sharing, Stealing: Big Data and the Future of Entertainment
Michael D. Smith and Rahul Telang
The MIT Press (August 2016)

An insightful discussion of the evolving nature and probable impact of Big Data

Decisions that concern Big Data do not involve IT issues; rather, they involve business issues and usually have implications and consequences that can have significant impact throughout the given enterprise. That is especially true of decisions made within the entertainment industry. Keep that thought in mind when working your way through the material provided by Michael Smith and Rahul Telang, especially when they are discussing companies that include (listed in alpha order) ABC, Apple, Amazon, Blockbusters, CBS, Encyclopedia Britannica, Funk & Wagnulls, Google, Harrah’s Entertainment, and Netflix.

Smith and Telang have much of value to say about how and why data analytics and Big Data have transformed the entertainment industry and leveled that playing field. “The interactive nature of online channels has changed everything. Companies like Amazon, Google, and Netflix don’t think about their customers in terms of broad demographic characteristics. They are able too use their data and their platforms to understand individual customer preferences. This, combined with the ability to control what content is shown customers based on those preferences, and the natural ‘winner take all’ nature of many online markets have given these new platform firms a great deal of market power.”

Moreover, “they have used this power to change the content is consumer by the audience, and change the business model for content distribution. This puts the platform companies =in an even more powerful position as con summers adopt and adapt to these new distribution models.” These brief comments by Smith and Telang help to explain why competition in today’s global marketplace has become more volatile, more uncertain, more complex, and more ambiguous than at any prior time that I can remember.

These are among the several dozen passages of greatest interest and value to me, also listed to suggest the scope of Smith and Telang’s coverage:

o House of Cards (Pages 3-10)
o BitTorrent (9-11 and 119-122)
o Beau Willimon (14-18)
o Recording industry (23-28)
o Book issues (31-34, 35-38, and 37-40)
o Differentiation of products (42-44 and 93-95)
o Encyclopedias on computers (51-58)
o Internet issues (64-70 and 128-131)
o Piracy (82-92)
o CBS (120-121)
o Peter Shutoff 106-108)
o Apple vs. NBC (117-121)
o Dominance of Apple (122-124)
o Baseball: Michael Lewis and Moneyball (133-0138)
o Google (141-145)
o Customer-level data (143-145 and 160-163)
o Netflix: Data-based decision making (145-150)
o Harrah’s Entertainment (155-163)
o Gary Loveman (157-163)
o Steve Jobs (175-177)
o Apple retail stores (176-178)

In Winner Takes All, Christina Brinkley explains how Steve Wynn, Kirk Kerkorian, and Gary Loveman used Big Data to achieve a competitive advantage for their casinos in Las Vegas. Smith and Tulane cover some of this in their book. Here are the key points:

o Obtaining the data needed requires a new reporting structure that threatens the status quo and its defenders.
o Information-technology systems are needed to process and evaluate data to determine customer preferences.
o The team must include members with strong quantitative backgrounds.

Loveman and his team at Harrah’s Entertainment found that 26 percent of its customers generated 82 percent of its revenue. Also, their most profitable customers were middle-aged adults and senior citizens who enjoyed playing slot machines. They were also able to predict the lifetime value of a new customer. These are revelations of incalculable value. There are similar stories in other organizations, several also included in the book.

These are among Michael Smith and Rahul Terlang’s concluding thoughts: “The overarching lesson for the entertainment industries is that, to succeed in the future, companies are going to have to control the interface with their customers (and the resulting data about their customers’ needs) in addition to controlling the production of content. That’s what we have been arguing throughout this book.” Entertainment industries include but are by no means limited to gaming. This is a “must read” for C-level executives in organizations that are currently ignoring or underutilizing what Big Data can help them to accomplish in terms of profitability, of course, but also sustainable relationships with customers as well as with highly-valued employees.

Streaming, Sharing, Stealing is a brilliant achievement. Bravo!