iPod, iTunes and what Apple knows about YOU

Had a *very* lively email discussion today with the smart folks in the Podcast Minnesota group after I started the thread about a new service that debuted (Fruitcast). It is just too good to leave inside an email threaded discussion — and did it *ever* get me to thinking and connecting the dots about my iPod, iTunes, podcasts and what Apple knows about me.

Fruitcast has launched before Adam Curry’s Podshow has fully rolled out. Fruitcasts’ value proposition is to offer a way for podcasters to potentially monetize podcasts through advertising. There was a lot of discussion in the PodcastMN group and great points like:

• CR: it’ll be interesting to see what happens with podshow.  because having advertising in their shows will select for a different type of audience.  and i suspect there will be some backlash about it. because honestly, the whole motivation for podcasting was to find content out there that didn’t completely emulate the model of traditional radio in every way.

• Mike W: I don’t know why everyone is in such a rush to “monetize” their podcast. I still am mildly offended that every somewhat popular blog has ads plastered all over them.

• Mike W: While I am going to watch this with a watchful eye, I don’t ever want to lose control over what I do. If I advertise anything, it will be first and formost something I believe in and use.

• Mike O: There’s no way to know who’s listening — so what advertiser in their right mind would pay that kind of money to listen to me ranting off into the void?

• Michael K: pointed out that there’s no way to know how many of those downloads are actually being listened to.  What advertiser would want to fire their messages off to non-played files on people’s disk drives?

None of this might matter in the long run. Podcasters might not even have a voice since Apple could — given enough data about each-and-every podcast listener — simply personalize the iTunes music store based on each subscriber’s listening criteria and forget about trying to insert ads in to podcasts at all or get permission from a podcaster to do so. If you’re a listener and are in to rock-n-roll, then there are a handful of podcasts that ought to be front-n-center on the podcast page for you. If you’re a technoweenie, there are tons of tech shows like This Week in Tech, Podtech, ITConversations, etc. that could be too. Ads could be delivered to “channels” of podcasts on the podcast page and money offered to those podcasters that care to participate in an ad insertion model.

I predict Apple will be in the best position to monetize advertising since iTunes is the defacto gateway to digital music and podcasts (yeah, yeah…that’s open to argument but it’s surely the largest gateway).

So what does Apple know about you from your iPod and use of iTunes?  Is it Apple — and not Podshow, Fruitcast, Odeo, Google or Yahoo — that will know the most about you and the podcasts to which you listen — and be the most powerful advertising powerhouse surrounding podcasting?

WHAT APPLE KNOWS ABOUT YOU — OR COULD FIND OUT

This blog isn’t the right venue to get in to a down-n-dirty discussion about data mining, privacy or the most effective execution of advertising on the internet, but suffice to say that the following items are fairly obvious, intriguing and point the way to what’s possible:

• What if Apple, for example, sold or leveraged data about the subscribers to podcasts? Mike O had his rant above about “how will advertisers even know who is listening?”

Oh….Apple knows.

Remember that any user of iTunes has their credit card number at Apple for their iTunes account (and there are 10M of them) allowing a wealth of knowledge to be acquired instantly…so Apple will know tons of stuff about you just from the credit data.

What kind of stuff?

PERSONAL: Full name and variations of it (such as maiden names); Social security number; Birth date; Current and previous addresses; Current and past places of employment; Driver’s license number and state where issued

PUBLIC: Liens and judgements; Bankruptcies; Foreclosures; Wage attachments; Accounts in collection

CREDIT HISTORY/OBLIGATIONS: Dates accounts were opened, Types of accounts (revolving, installment loan, mortgage), Income; Account balances and credit limits; Payment history for each account, including late payments; Unpaid child support and overdrawn checking accounts.

OK…but how will Apple know what I’ve listened to?

• How can Apple even know what podcast I’ve listened to, if I’ve listened to it (instead of just downloaded it) and when?  Without getting in to a long description of all the metadata that already exists and is passed back-n-forth between the iPod and iTunes, just know that audio files within iTunes ‘remember’ play location data so the system knows if a file is played part way or all the way (it’s in the iPod operating system metadata and is data like “Last Played” and “Play Count”, etc.). I don’t know if data about “skipping ahead” in a tune or podcast is captured, but I would think this would be a trivial addition to make in the next iteration of the iPod software if it’s not already there. Then, just like TiVo does today, analysis could be performed on whether a subscriber actually listened to an advertisement, a song, or skipped over them.

If you want to try this out for yourself, do this: play a tune on your iPod part way and note the time in minutes and seconds. Stop. Connect the iPod to your Mac/PC and your iPod will launch iTunes and update automatically. Now immediately play that same tune in iTunes (or even copy it to a 2nd iPod if you have one) and you’ll see that it now plays from the exact same spot. Most interestingly is that this ‘bookmarking’ feature works with MP3 files now (and used to only bookmark Apple’s proprietary AAC files).

What could Apple do with all the information about me and my listening?

Just ONE of the major credit reporting agencies, Equifax, has direct marketing offerings that cover stuff like:

• Identify, target, and reach your audience, by using the industry’s most powerful consumer databases
• Segment customers and prospects according to your criteria
• Deliver the right message through the right channel via email and postal lists
• Enhance your own customer database by appending email and postal addresses
• Build the value of your customer data by adding more than 700 demographic data elements to the records on your files.

Wow. That’s a lot of data to capture, mix together with data from iTunes customers/subscribers and their listening habits, and make available to advertisers and content producers (or perform predictive behaviorial analysis on it all). Though it’s highly unlikely that schneeb’s like me will ever have a clue about any of this data, it’s certain that media companies and advertisers will.

Point? Apple knows (or could find out and perform analytics around) who is listening to podcasts, which podcasts are being subscribed to by each person, as well as who actually listened to which ones…and capture/update this data every single time the iPod syncs to iTunes.

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If you want to read more and get a high level sense of what is possible and how huge the multi-billion dollar data mining and business intelligence industries are, read this and this and this older article.