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June 11, 2008

Music Licensing Revenue Drops in 2007

I saw this story and wanted to highlight the relevant passage for my readers:

"Music fell by the largest margin (5.5%) to $125 million from $132 million in 2006..."

I've highlighted this before, but let me address this issue again.  This is no time for any artist, songwriter, label, or music publisher to be turning down revenue-enhancing opportunities.  This is no time to rest on one's laurels when a licensing request comes in and sit on it until the requestor is forced to go to another party to get what they need.  There is a glut of quality music supply, so the licensee, the buyer, holds the upper hand, not the licensor.

But licensees, as George Costanza might say - you've got hand.

March 19, 2008

What is "Selling Out?"

NOTE: Sorry - I started this post last week and just had the time to get it out today.

A discussion I've heard far too often, both among music industry personnel and those in the media and in the corporate marketing world, is that of trying to define what "selling out" is in terms of a musical act's relationship with a corporate brand.  On the one hand, it is an accepted fact that many acts need some kind of corporate involvement at certain times during their careers to help them financially or with major exposure boosts.  On the other hand, the artists themselves are rightfully wary of aligning themselves with brands in ways which leave them open to criticism from fans and press alike.  An article by Charles Moran in this week's Advertising Age explores this topic again.  Charles also co-writes the great Songs for Soap blog for AdAge.com with Mike Tunnicliffe, which explores the many different brand/artist interactions taking place these days.

One thing rarely discussed is this: artists - ALL artists - need to "sell out" to corporate interests at some stage in their career, and often this involves the corporations they align with the closest and with the highest stakes for their longevity - namely their own record labels and the radio stations/video outlets (and the conglomerates which own them).  Even in this digital, DIY age the large majority of artists seek to be signed by a record label so the label can provide marketing, PR, radio promotion, and distribution of their recordings.  Once the act has music to be released, then they need to go out and promote their single across the radio stations and video channels/outlets which they depend upon to drive their music up the charts, thereby driving album sales and the revenue they might receive based on that airplay.  Yet the major labels (and those indies which are divisions of major corporations) and the big radio conglomerates use music to their own ends just as any corporate brand seeking to license the content from those acts. 

How many artists feel their careers were mismanaged by their labels, both when they were current artists, and with their catalogs after leaving a particular label?  Too many to count.  Those corporations keep cutting staff and roster acts as the industry's physical sales woes increase.  They also have lousy reputations for being dishonest in their accounting to the artists they rely on to develop the content the companies are based on.  But those labels are still the key engines for allowing artists to create and distribute their art as efficiently as possible across a wide range of media.  Even the band Birdmonster, once touted as a completely DIY outfit in Chris Anderson's classic business book "The Long Tail," has signed to a label.

How many artists decry how radio airplay decisions have been centralized by corporate behemoths, leaving virtually no local station autonomy and relying almost solely on audience research to make programming decisions?  How many fans hate when radio conglomerates change station formats in their local markets, thereby leaving music fans deprived of easy access to certain kinds of music?  Radio conglomerates especially just use music to sell advertising time and advertising programs to marketers.  So, in essence, while artists use radio to air their songs, the stations use the music to draw in audiences attractive to advertisers, and the artists have ZERO SAY in what advertising those stations play around their music.

Even the venue owners, ticket sellers, and concert promoters are large corporate entities which must be dealt with: Live Nation, AEG, Ticketmaster, etc...  and these companies all have divisions which deal with artist fan clubs, merchandising, and other key parts of the artist's live performance and ancillary revenue streams.

Many artists who would refuse any proactive alignment with a particular brand nevertheless do not complain when particular retailers, hotels, restaurants, banks, health clubs, etc... have in-store music systems which include playlists featuring their own music.

So, let me use a rather crude analogy.  Much as Mademoiselle Rimbaud, the busty French girl pleading to Mel Brooks's King Louis in "History of the World, Part I" pleads she simply does not "do it," I reply to those artists who think they aren't already neck deep in corporate involvement with the King's blunt response: "Come on.  You know you do it.  We all do it.  We love to do it."  There is always a price to pay for releasing one's art and striving to have it make an impact on as mass a scale as possible.  There is always a beast which needs to be fed.  And if you want to achieve mass success, then there is always a game to be played to fire up the engine of that success and keep it running smoothly... which doesn't mean there aren't conscious choices artists shouldn't exercise, just that any claims of artistic purity are proven false on prima facie evidence alone.

Noted music supervisor Josh Rabinowitz of The Grey Group writes a bi-weekly column for Billboard magazine entitled "With the Brand."  In last week's column (no link available through all my search efforts) he espoused the virtues of artists "selling in" to the world of music licensing and doing music promotions with brands.  Why?  The answers are obvious.  In an interconnected world where one is more likely to hear about a video via YouTube than MTV, or hear a new band or song on MySpace or "Grey's Anatomy" than on commercial radio, then the choice to be anything but completely channel agnostic is short-sighted thinking.  Yael Naim and her song "New Soul" are part of the cultural zeitgeist due to an Apple TV ad.  And both the artist and the brand can measure their success together.  Since her song was featured in the ad her download sales have been significant, and Apple can actually, in some fashion, track how much consumers are paying attention to its advertising by watching that immediate reaction.  Similarly, the company can also check out how many YouTube views of its commercial have been seen by consumers, and, as Yael Naim's record is released, how many albums she sells and her success in the digital and mobile arenas - in great part to her association with the brand.

Haven't those been the great questions marketers consistently seek to answer: "How can I quantify the effectiveness of the advertising my company and/or marketing agencies is producing?  How can I tell, in this TIVO/DVR world, if people are just skipping through my company's ads and ignoring them?"  The measurements above are imperfect to be sure, but they are still measurements one can gauge effectiveness by.  Was there any shot "New Soul" would have received any consumer attention in today's oversaturated media marketplace without a major ad or television licensing opportunity such as the Apple ad?  Did she stand any chance at garnering radio airplay of any significance?  No way.

The quotient may be different for some older tracks or artists whose music is used in such a way, but not by much.  90s dance star Haddaway had his once-ubiquitous hit "What is Love?" licensed for a diet Pepsi Max ad aired on this year's Super Bowl.  He had a tremendous increase in download sales after the ad was aired.  Was it an increase the Diet Pepsi Max brand manager thought was significant given his multi-million dollar media buy for the Super Bowl?  Who knows?  But it at least gave him some quantifiable evidence to suggest the ad was the sole reason for that sales increase.

Production music companies are more than happy to be to taking corporations' easy money and leaving the moralizing to the artists with egos who find these opportunities to be analogous to selling one's soul.  There is a market to be served and they are glad to serve it as efficiently and cheaply as possible.

So every artist needs to take a step back and truly ask themselves this: if they are willing to give up their masters to one company - the record label, or if they are willing to go and provide programming to radio conglomerates who don't have any vested interest in music per se, then why are other types of brand partnerships taboo?  They shouldn't be, and if you don't think fans realize this, then you're selling yourself... short.

December 17, 2007

Advertising Age's "2007 Best Ad Songs" / Make a DEAL

Advertising Age has posted their Top 10 "2007 Best Ad Songs," noting their favorite uses of music in TV advertising campaigns.

I can see how some of these songs made the Top 10.  I love the Apple, Old Navy, JC Penney, Dove and Volkswagen ads.  I have mentioned the Volkswagen/Wilco partnership before, and it played out rather nicely in the execution.  Ingrid Michaelson, whose "The Way I Am" was featured in the Old Navy ad, questioned her own integrity when some fans ragged on her for "selling out."

I find the whole "selling out" argument to be passe.  As I commented on No Depression magazine's "Peter's Postscripts" blog - artists "sell out" to corporations every day, namely their labels and radio conglomerates.  Yet somehow Z100 or Island Records, for example, are considered holy while licensing music for a :30 spot is considered blasphemy.  Sometimes I just don't understand how people think.

I was somewhat surprised to see that one of my all-time favorite bands - IRON MAIDEN - had licensed their 1988 hit "Can I Play With Madness?" to Sony Electronics for a commercial about HDTV - easily listed as one of the "Most Questionable Ad Songs of 2007" by Ad Age.  I was less surprised Maiden licensed the track (though this is the first instance I've seen of the band licensing ANYTHING) than the agency chose that song to help deliver the message the ad was trying to send.  I found the ad preposterous just from the visuals, and when Maiden's track is added the effect is just dreadful.

From a personal perspective - I find it unbelievable that Country music has such little representation in modern TV advertising.  A colleague of mine blamed it on music publishers who seek too high a price for their sync licenses.  Many agencies still relegate music licensing, in terms of budget and creative importance, to the proverbial back of the bus.  And supply of licensable music far outweighs demand, making it a buyers market.  Sellers beware.

We can see from this list that being a current act on a major label, or even major indie label, bears little correlation to the music agencies license for their clients.  My dear artist, music publishing, and label friends, take note.  Be flexible and make deals happen.  Be proactive.  Survive and thrive - don't be watching the oncoming light become the express train as retail shrinks and radio airplay tightens.  Music exists to be listened to - however people or corporations choose to consume it.  Use that to enhance your own revenue streams and profitability.

November 25, 2007

The Bottom of the Pile

HITS magazine has been posting the manifestos of Terra Firma head Guy Hands re: the company's recent purchase and now management of recorded music giant EMI.  I liked this one in particular (free registration required).

Among the ways Terra Firma states it will add value to EMI is listed this:

Exploiting assets Moving the prioritization of the exploitation of the catalog from the bottom of the pile to the top

I find that statement both laugh-out-loud funny and cry-out-loud tragic.  Funny, because that's what record companies and music publishing companies ought to be doing every day in the first place.  Tragic, because these labels can't maximize catalog exploitation until they are able to license each and every artist's catalog they own at will, and that is unlikely to ever happen.  Every artist contract is different, and those artists who retain artist consent clauses will be loathe to give up their rights just for the sake of the record company's financial health... but unless the record companies make the attempt to make licensing and exploitation a more seamless process, then the catalogs of the major cash cow artists those labels control will never be able to be maximized financially.

I applaud EMI for stating that a change needs to happen going forth in order for the company to maintain financial health... but why did it take until 2007 for one of the major labels to realize this new reality?

November 13, 2007

Moderating Panel Tomorrow Night in NYC

I'll be moderating a great panel tomorrow night in New York being presented by the Film Music Network on the use of music in corporate imaging and branding.

Check out the event and please pass the word on to any marketing people of musicians/composers you think might be interested in attending.

Thanks.  I'll let you all know how the event went later this week.

September 26, 2007

Hotel, Motel, Holiday Inn - The Major Labels Find Hospitality Partners

Two very similar marketing deals between major label groups and hotel operators popped up this week.

The more significant deal was between Sony BMG and hotel conglomerate Starwood.  Meanwhile, EMI has partnered up with hotel chain Fairmont Hotels & Resorts in a similar deal.

Kudos to both label groups for securing these partnerships with their respective partners.  However, I am curious as to why a hotel chain would want to establish such an exclusive arrangement with one label group, even major label groups such as this.  In the Sony BMG deal, it says that:

"Another goal is to create compilation CDs that will be sold at each hotel. At a price of $20, a compilation for W Hotels -- including such acts as Goldfrapp, Nina Simone, DJ Krush and Dirty Vegas -- has already been developed. Sony BMG and Starwood will share revenue on each CD sold."

$20?!?!  The labels can't even sell single artist CDs by major artists at most music retailers for the suggested list price of $18.98 - how many CDs does Starwood think they can actually move for $20 apiece?  Room service and the mini-bar are expensive enough, so why try and gouge your customers on the price of a CD when the goal should be to maximize customer purchases by selling those compilations at a reasonable price and having those customers spread the word about the W experience with friends and colleagues, with the CD serving as the soundtrack those customers then play for their party guests and friends in their homes and cars?  The release states that Sony BMG and Starwood "share revenue" on each CD sold.  The way I read that is that Starwood pays Sony BMG to produce the CDs, earning them revenue, and then Starwood sells the CD at their ridiculous markup, earning them revenue.  If the model is different, then someone please let me know, but that's the traditional model for developing a private label CD compilation for sale.

A better question for each hotelier involved here would be - why tie yourself to one label when there are services which can offer similar offerings (DMX Music, PlayNetwork, Muzak, and Trusonic come to mind) which have access to content from multiple labels, including independent labels, thus ensuring an accurate and more representative branded music experience for hotel guests which focuses less on major label priority releases and more on the particular hotel brand?  DMX must be somewhat rankled - Starwood is listed as one of their key hotel clients.  I know Sony BMG says they will license in 3rd party label content for the playlists for each Starwood chain, but you know Sony BMG is going to focus first and foremost on their own owned content - as well they should.

The problem is aligning a hotel company with a particular major label group in such a significant way means that the success of the partnership rises and falls with the quality and popularity of that label partner's content - as it relates to each individual chain within the company's portfolio.  No one can dispute that each label involved here has significant catalog which can be targeted towards these companies' customers; the question is in the execution of these partnerships will the labels skew their offerings too much in the way of current artist ephemera, or rely on the catalog stalwarts that business and leisure travelers might be looking to hear for a sense of comfort away from their home environments.

August 25, 2007

Nashville & Marketers - Changing Misperceptions

A few months ago I came to a decision to start my own firm after years of working for large labels.  It's kind of scary setting off on your own with nothing but your own faith in yourself and the encouragement of the colleagues and clients that know you well.

That being said I took a look at the music landscape to see where KOHAN MUSIC GROUP could find its niche.  In the special markets world in the record industry you have to know how brands intersect with music in their marketing efforts.  You also have to know how to squeeze every drop out of a catalog of music.  Masters and copyrights don't just act as annuities for labels, artists, songwriters, and publishers.  They have to be actively worked and pitched to realize their own, individual "long tails" of exploitation revenue and profits. 

So, as you can probably see just from checking out my MySpace friends, I'm making a heavy bet on Country music.  This may seem an odd choice for a guy from New Jersey who got his start working in jazz, but I'm a firm believer in having broad horizons and big ears... that, and some of Country's biggest stars are from Australia or Canada, so geography shouldn't be part of the initiation rites.

Some of what I see happening down in Nashville with the labels and publishers I've been speaking to is creative and exciting, while I see other parts of the business lagging due to inattention and, mostly, a nagging perception of what Country music is and is not in the eyes of the people I normally call my customers.

Country music is a pervasive radio format (even as radio's importance lessens in our cultire) and CMT and GAC, unlike VH-1 and MTV, actually play music videos and develop programming promoting artists.  So corporate brands support these media channels through advertising and marketing programs on a consistent basis.  But it is all too rare to hear a TV or radio commercial spot featuring a major country artist, much less the artists beneath that rarefied strata. 

I did some informal polling with some friends of mine at ad agencies and music placement firms.  There is definitely an uphill battle for Country music as it stands vis a vis other types of music favored by creatives and agency clients, especially those in urban centers.

People in marketing, in general, don't see Country artists as individuals as much as they see them as "COUNTRY."  We all know there are big artistic, personality, and image differences between Brad Paisley and Toby Keith, or between Trisha Yearwood and Shania Twain, etc...  There's pop Country, twang Country, big hat Country, Southern rock Country, gospel/inspirational Country, Texas Country, tiki bar Country, singer-songwriter Country, R&B Country, etc..., but it usually all gets painted with the same broad brush by some agency creative choosing some piece of high energy techno rock for their :60 regional car dealer TV spot, and that brush carries a negative connotation, or at the very least a connotation of being a "less sophisticated" genre of music.  Bullshit - complete and utter bullshit.  And remember, these are the guys charged with being "creative."

KOHAN MUSIC GROUP is hoping to be part of the driving force behind changing these misperceptions.  The collaborative, competitive, and powerful creative forces in Nashville should be getting more than their fair share of opportunities in the advertising, special markets, and film & TV markets.

NOW... I want to hear some comments from you all.  What have your experiences been in working with the advertising/marketing community related to Country music?  Do you get proper support in your business if NY and LA are the main offices dealing with these communities?  I realize it's hard for some people here to make a public comment because it would be visible to all here on the blog, so if you feel more comfortable responding to this post in private please send me an e-mail message with your thoughts (click on the ABOUT section in left-hand column for my e-mail address).  DON'T HOLD BACK!  I want to hear from my readers!  Thanks.

July 03, 2007

The Thin Line Between Love and Hate

Most successful (and not so successful) recording artists have a fairly short period of time to cash in on their fame.  Singles go down the charts as quickly as they rise.  Musical trends can become passe in an instant.

And for brands there is the temptation to feel if they miss out on an artist's commercial peak, then customers will not feel their brand is current or hip enough to get noticed in an atmosphere of clutter.  But they also might overpay at the peak.  It's a tricky balance to strike.  Music is meaningful to brands in so many ways, and they don't want to leave the field open to competitors if a particular artist of the moment is selling a boatload of records.

But, despite my advocacy of brands associating themselves with music and vice versa, there are still deals which make me hold my nose for various reasons.  Sometimes it's a lack of an organic fit.  Sometimes a brand will use a treasured song in such a way as to make the song or the artist who recorded it seem less classy.

Dr. Pepper just paid the semi-successful pop-punk band Cartel to live inside a bubble on a pier in New York City while recording their new record.  The effort was filmed for an MTV reality show which ended last month.  Sure, it's interesting to see the creative process of making an album, especially by a fairly new band (though Metallica's "Some Kind of Monster" is a much more insightful look into that world).  But it seems like such a marketing STUNT!  Where is the authenticity?  Now the Dr. Pepper brand supports music in numerous ways; this particular tactic, however, reeks of crass commercialism.

And now, Candie's has just paid multi-platinum artist Fergie $4 million to appear in some ads - and will pay her to incorporate the brand into her song lyrics by design.  First off, I'll admit to not being a fan of Fergie's in any way, shape, or form, whether as a solo artist or a member of the Black Eyed Peas (who used to be a half-decent, though not commercially successful hip-hop group before Fergie entered the picture).  I found her distasteful even before this came to light.  And I am not surprised to see her or her label taking the cash - the marketing of this artist has always been about cash and flash above any sense of musical quality.  Nevertheless, America has bought into Fergie as a superstar.

But it's one thing for an artist to give a shout-out to their favorite brand(s) in a song and another, more distasteful thing for the artist to accept cash to ensure that a brand is mentioned in one or more songs they record.  That's blatant product placement.  It's making the song a commercial in and of itself.  But the questions for Candie's are: "What happens if the next Fergie album sucks?,"  "What happens if the next Fergie album doesn't sell?,"  and "What happens if the other songs on Fergie's next album are sexually explicit or distasteful to the moms who buy the brand for their daughters?"

Record labels and pop artists are not in a position of power.  If they see cash like this, then they will grab it and run to the bank in an instant.  They will say "yes" and promise you a lot.  They may even deliver you a lot, but they still want to deliver more to their fans and to radio and video and Internet outlets than they want to for your brand.  And what they deliver to them might trump what they deliver for your brand.  Remember Madonna and Pepsi?  Need I say more?

June 22, 2007

Kudos to Volkswagen and Wilco

Here is a fantastic example of what I feel is a great strategy by a brand interacting with music.  It's not surprising this move comes from VW, whose TV spots have always used music as a focused element of the advertising message.  VW has apparently signed a deal with noted alternative band Wilco to place not one, but 5-6 of the group's songs in upcoming TV spots for the brand.

From Wilco's web site:

"Why? This is a subject we've discussed internally many times over the years regarding movies, TV shows and even the odd advertisement. With the commercial radio airplay route getting more difficult for many bands (including Wilco); we see this as another way to get the music out there. As with most of the above (with the debatable exception of radio) the band gets paid for this. And we feel okay about VWs. Several of us even drive them."

Kudos to the band and to their management for taking a channel agnostic approach to getting their music distributed in unique ways - and recognizing the bottom line impact of music licensing.  As this is a band with so-called "indie cred," I would hope this would open the eyes of holdout labels, artists, and managers who decry the need to license in this manner to brands or be involved with brands at all.

June 20, 2007

Mining for gold with Midas

As I've written of recently, there are solutions for many brand that lie outside of the major labels when it comes to music.  The disruption at those major labels has given rise to start-up independent labels and DIY artists outside of the label system altogether.  In Nashville there is a set of indie labels that have had much success as the majors have retrenched and cut back on the number of artists on their rosters.

Why does your brand need to pay attention here?  Because these labels have each had runs of chart and sales success with artists and potentially don't have the high economic barriers to entry your brand might find in seeking to tie into major label artists.

For the record - I think corporate brands and country music fit extremely well together.  Most people can relate to country music because the artists and songwriters deliver content about the lives the majority of us lead: we work hard for our goals, raise real families with real problems, and often need to look outward for guidance and redmption. 

Let's take a look at one of these labels and see what brands have - and have not - done with artists on that label.  Midas Records has a couple of artists, Emerson Drive and Whiskey Falls, one which has launched and achieved chart-topping success at Country radio and received numerous nominations from the Academy of Country Music, and the other whose album has yet to launch.  Which artist do you think has gotten the love from corporate marketers?  If you guessed the hit artist you'd be wrong.

Emerson Drive just had the #1 Country Single in the nation - during the CMA Fan Fest, the industry's biggest live event!!!  So here is a band that has reached a milestone most acts would kill for.  They have a solid album.  This seems like a well-oiled machine a brand would want to leap into and take for a test drive, at the least.  Not yet.

Whiskey Falls is about to launch their new album on Midas and has gotten love from TV and corporate brands.  On the TV side, their song "I Can't Stop Loving You" garnered key placement in an episode of the NBC soap opera "Days of Our Lives."  Meanwhile, they scored both a placement and an appearance in a new national TV spot for auto repair chain AAMCO.

Did you know about these bands?  Emerson Drive has been around for a while.  They started out on Dreamworks Nashville a few years back.  This current album is their third release.  The point is to keep seeking out acts whose music and image suits your brand's needs and not necessarily accept star power as the currency your brand needs to be dealing in.