BigChampagne Is Watching You

BigChampagne

In class we recently finished discussing the idea of an information cascade. One application for information cascades that came up was trend-setting. The idea is to jump start a trend (fashion, music, etc.) by targeting and attracting key individuals who have a lot of sway in the industry. An example could be a fashion designer giving a celebrity a piece of clothing to wear at a highly televised awards show. The hope being that people will see the item on someone who they like and decide that they too like the item. This phenomenon is well documented, a company develops a product and wants to generate buzz to sell it.

In reality this is not how most products are sold. Major corporations such as Coca-Cola and Pepsi do not sell directly to the ultimate consumers, they sell first to retailers such as supermarkets and convenience stores. How then does the retailer decide which product to sell when all the products are working as hard as possible to generate a trend for themself? This problem takes on extra significance in the radio industry as new music comes out weekly and often a city will have multiple pop stations all vying to gain listeners from the same fan pool. If a station could gain extra information about consumers listening patterns, it would be a major competitive advantage.

In October 2003, Wired Magazine ran an article on BigChampagne, a data gathering company that monitors P2P networks such as Kazaa, limewire, etc. across this country. BigChampagne would track downloads on these networks and locate them geographically using segments of the users IP addresses. They were looking for discrepancies in which song downloads for a given group jumped greatly from week to week or situations in which for a given song, downloads greatly outpaced radio air time. The resultant data sets were then sold to radio groups such as Clearchannel for as much as $40,000 per month.

BigChampagne’s data sets represented a great improvement over previous methods of data acquisition which included cold calling potential listeners or simply copying playlists from similar stations in other cities. It is widely rumored that most if not all major record labels subscribe to BigChampagne’s services but record companies refuse to comment for fear that it will damage their cases in ongoing lawsuits against filesharing networks.