If music is the soundtrack to our lives, then advertisers want a piece of the experience. But how can artists forge powerful and profitable relationships with brands? At South by Southwest on Thursday, entrepreneurs started sharing notes on the elusive branding partnership.
The major label recording contract was once the ultimate prize for many artists, simply because of the financial, distribution, and promotional muscle involved. But artists now have alternative paths towards broader-scale success, including direct relationships with brands.
Superstar artists certainly have their place in the advertising world, and multi-million dollar sponsorships prove it. But brands are usually interested in connecting with targeted demographics, and that opens the door for smaller labels, bands, and scenes. "I would actually rather work with a medium-to-small sized artist," commented Trey Shelton, chief executive of Music Interactive. "With an up-and-coming act, you are getting a little bit more of a tastemaker crowd."
Keep reading on Digital Music News
Rock Brand 2.0: What Advertisers Really Want
YouLicense Seeks Music Submissions for Film Placements
YouLicense.com, the Online Music Licensing Marketplace, is offering many great licensing opportunities to artists worldwide and invites all to submit their music free of charge to be considered for various film placement opportunities.
Recently added opportunities by UK based production company FFAB:UK and the Indie film, Phobidilic, are great examples of the growing community of filmmakers and production companies seeking to license music directly from content owners in a fast, simple and easy manner.
“Connecting artists with filmmakers and production houses globally is exactly what we aim to do on YouLicense.com. Finding and creating the right tools for all our clients is our top priority and we’re extremely pleased to see licensees and content owners connecting through our marketplace and discovering the creative solutions needed for them to complete their projects in a fast and secure process.” Maor Ezer, Founder & CEO of YouLicense.com
YouLicense.com is dedicated to connecting content owners (both independent artists and larger providers such as publishers and record labels) with music licensees worldwide. Content owners can now take advantage of the new “Opportunities” section on YouLicense.com and submit their music for consideration by the licensees. Joining YouLicense.com is free of charge as well as submitting songs to these opportunities.
From the “Opportunities” section – as posted on YouLicense:
FFAB:UK: “A short film to be submitted to international film festivals including Cannes. Three people are trapped in an elevator. We need five songs that sound like Muzak. Each must be different and contrast with the others.”
Phobidilic – The Movie: “I’m looking for original music for my upcoming movie soundtrack. The movie is called “phobidilic” and it’s a dark, kick ass, fight-club style feature film. Shooting on the film has begun recently, so bring it on…”
http://www.youlicense.com/Opportunities
Taken from Maor Ezer's blog at http://www.maorezer.com/?p=15
The NPD Group: Consumers Acquired More Music In 2007, But Spent Less
According to The NPD Group, a leading provider of consumer and retail information, the amount of music that consumers acquired in the U.S. increased by 6 percent in 2007. A sharp increase in legal digital download revenues could not offset declines in CD sales, which resulted in a net 10 percent decline in music spending (from $44 to $40 per capita among Internet users). As a result the overall portion of music acquisition that consumers actually paid for fell to 42 percent in 2007 from 48 percent in 2006
NPD estimates that one million consumers dropped out of the CD buyer market in 2007, a flight led by younger consumers. In fact, 48 percent of U.S. teens did not purchase a single CD in 2007, compared to 38 percent in 2006.
The percent of the Internet population in the U.S. who engaged in peer-to-peer (P2P) file sharing reached a plateau of 19 percent last year; however the number of files each user downloaded increased, and P2P music sharing continued to grow aggressively among teens.
Legal music downloads now account for 10 percent of the music acquired in the US. Reflecting the growth in that sector of the market, Apple's iTunes Music Store became the second-largest music retailer in the U.S. after Wal-Mart, based on the amount of music sold during 2007 (based on a 12-track CD equivalency for music track downloads).
Twenty-nine million consumers acquired digital music legally, via pay-to-download sites last year, which is an increase of 5 million over the previous year. Sales growth was largely driven by consumers age 36 to 50 -- a segment that was aggressively acquiring digital music-players in 2007.
"The continued growth in legal download sites is encouraging, yet the industry struggles to improve the value of each digital customer," said Russ Crupnick, entertainment industry analyst for The NPD Group. "With so many baby boomers and gen-Xers entering the market, there are certainly opportunities to sell more digital albums, promote older catalog titles, or create bundles that will raise revenues. In the near term that's going to be the best means available to narrow the gap on dwindling CD revenues."
Original link
MIDEM Video: Fans Business Panel
MIDEM, the world's leading music conference, just ended in Cannes France. YouLicense had a great time and met many interesting companies and individuals. We also had the pleasure of attending several highly interesting music panels. The MIDEM team were nice enough to share some of those panels via YouTube.
Here's an interesting panel on the relationship between fans and artists featuring Chuck D from Public Enemy and several industry professionals.
New Study: Blogs More Than MySpace Sell Music
A new study by New York University's Stern Business School tracked blog chatter for 108 albums for four weeks before and after their release dates.
The study showed that the volume of blog posts led to future sales, but that large increases in an artist’s Myspace friends had a weaker correlation to sales. According to the study, if 40 or more blog posts were made before an album's release sales ended up being three to four times times the average for both indie and major releases. If blog posts crossed 250, album sales rose to six times the average regardless of label.
But don't throw out the old school rules just yet. Albums released by major labels and albums with a number of reviews from mainstream sources like Rolling Stone also tended to have higher future sales.
Advertising has always been about impressions, but previous marketing efforts were often aimed at big scores - a magazine cover, a TV apprearance or even a major national tour slot - and the bump in sales they provided. But in a fractured media landscape it seems to be the cumalitve effect of a multitude of impressions that matters. This study provides some early clues for music marketers interested in assessing the relative importance of Web 2.0 sites and metrics and suggest that looking at cumalative online action appears to provide predictive value far beyond looking at each in isolation.
[PDF of the full study]
[Originally posted by Bruce Houghton / Hypebot.com]
The End of Music: When Did Music Become A Penalty?
If you you’re not aware of the changes happening in the music industry you’re probably living in a cave, or you forgot to pay the internet bill. It seems like every time I read about music there is a mention of revenue loss. 2007 is finally over and the analysts are on a numbers frenzy to show us what’s really happening, why the music industry is struggling and why we should all pace ourselves for new business and consumer models.
The Problem: Digital vs. CDs
‘The problem is not that consumers aren't buying digital music. Indeed, digital track sales grew by 45% last year, according to the Nielsen SoundScan "2007 Year-End Music Industry Report."
Yet digital music sales are not making up for a CD sales slump, and online music consumption will have to be far more widespread than it is today to do so.’ Emarketer.com
And indeed so, with everyone trying to get a bigger bite out of the digital pie and Amazon’s groundbreaking efforts to free us all of DRM and support independent artists in the process, I’m sure the future will hold amazing things for the digital revolution.
‘US recording industry revenue fell by $11 billion at year-end 2006, down 25% from a 1999 peak of $14.6 billion, according to Yankee Group's "US Digital Music Forecast: What Fate Awaits the Record Labels?" report.
Yankee Group said the rise of digital music will compensate slightly for this loss, reaching $5.34 billion by 2012, up from $1.98 billion at the end of 2007.’ Emarketer.com.
Half Way There: The Fans Determine the Price
Yes, yes, I know, Radiohead gave their album away for free. Well I paid 5 pounds for it. It was definitely a nice marketing trick and I’m sure we’ll see many more of these in the coming year. But let’s all remember that it only works if you’re Radiohead. All you indie artists out there dreaming that your fans will pay if offered a choice, they probably won’t. Your closest friends would, but they would have bought it anyways.
Trent Reznor was shocked to learn that only 18.3% of users when offered a chance to download the new album from Saul Williams for free really paid the 5$ to support the artist. Bottom line, he lost money. Even the Radiohead album found its way to P2P networks, with record breaking download numbers...what does this mean, all the music fans are on BitTorrent?! Hmmm…
The Solution: Flat Rate Music / Music tax
Media futurist, Gerd Leonard, proves everyone wrong by explaining what the benefits of a flat rate business model are. He outlines that music consumption has actually risen lately but in the same time consumer spending dropped. It’s just a matter of finding the economical equilibrium that makes it work and profitable for both sides.
Did someone say ‘Music Tax’? Well, this is the topic everyone is discussing.
Michael Arrington from the famous Technology blog, TechCrunch, has decided that years of blogging about new startups and technologies have now earned him the seat in the music 2.0 panel. He advises us all not to invest our time innovating new music models and ideas because the industry has only a few years left. He talks of music innovation in this new music tax era and explains why it’s not sustainable and why the labels will come knocking on everyone’s door again and again requesting a higher tax. I know that in some European countries there’s a TV broadcasting tax, and I also know it’s something that belongs in the 70’s and is not working. Billions were spent on claiming these taxes from people who don’t even watch TV and don’t really understand why they should be paying taxes when they pay a monthly fee to their cable providers for the channels they actually view.
Here’s the basic idea: Internet service providers, the guys you pay for your internet connection, will tax all users worldwide a monthly and in return users can listen to as much music as they wish.
Gerd Leonard comments on Arrington’s view of the flat fee model music tax:
“Michael, you just don’t get it and I wish you would stop just ranting on this issue of the flat-rate while lacking the understanding of this space. A flat rate for for digital music (NOT a tax or some sort of ISP penalty - but a blanket license that is offered to anyone that wants it) is the best thing that can possibly happen to artists and consumers alike. It creates HUGE incentives to get and retain attention on digital networks (as well as in real life aka concerts), since every click on a web / mobile site could and would result in your music being used (streamed or downloaded) which would translate directly into garnering more ad more pieces to this new ‘pool of money’. And yes, the artists want to get paid - imagine that!”
Well put.
I believe a monthly subscription fee for music is the right model, at least the current one for the undecided consumer that doesn’t really see the need in paying 1$ for a song he can easily grab on eMule or Kazaa. I know a lot of people who’d be more than happy to fork over a few bucks a month to get unlimited music in their lives. That being said - no DRM, no strings, no “sorry this service is for US residents only” and no “we couldn’t find this artist may we suggest artist X”, no you may not, I want to listen to Neil Young not Wilco!
And then there was Qtrax
Biggest thing on the net lately is the almost launch of ad based free download service Qtrax. I recently attended MIDEM the world’s largest music conference/trade show in Cannes, France and everyone was raving about this new service that was supposed to launch that very week.
From rumors and internet chatter I understand that Qtrax said they have all four major labels on board and are ready to launch the largest free ad supported software in the world. But soon the press releases started coming in with rumors that Qtrax were unable to launch because Warner Music pulled back from the agreement and said they won’t support the service and very soon after the remaining three majors followed.
The majors said that they talked with Qtraax about a subscription model not an ad supported rev share model.
For now, Qtrax has launched and they are reporting high levels of traffic (number 2 on Alexa) and are confident in their product and their “existing music library”, although it does not consist of the majors just yet.
If Qtrax manages to get all four majors on board and allow users worldwide (currently not supporting all countries), DRM free, to use their service it might just be the solution we’ve all been yearning for.
More charts from Emarketer.com
Spending:
Worldwide Record Sales:
Where Music Socialism Fails
How does it work?
Interested users sign-up to the record label and essentially reserve themselves a 1/50,000th share. Once the 50,000th share is reserved, users are asked to buy their share for $25 each. Now they “own” a “share” in the label and can participate in all the aspects of running the label via online forums.
Sounds familiar?
Well, the acclaimed Sellaband.com allows its users to introduce a band to its online community and initiate fundraising through word of mouth that will eventually develop the fan-base that the band needs to get picked up by a major label. Sellaband is, essentially, Socialist-style Artist Development, and it seems reasonable to assume that the model can, indeed, work. Of course, like any new user-generated online music initiative, it relies on user participation and interest and its social networking system will be critical to its success.
Where Socialism Fails..
If Sellaband is the equivalent of a socialist music co-op than LaunchALabel is a Marxist Music Commune with aspirations for world musical domination that would make any anarchist proud. Just how involved will users (shareholders) be in the daily operations of the label? According to LaunchALabel, “You will have a vote in virtually every decision the label makes… from the bands it signs, to the tours the bands go on, to t-shirt designs and more… you will even be choosing the label’s name!” Maybe it’s just me but the further I get into the pitch, the more I feel like I’m buying something from a late-night infomercial. With a liberal use of terms like “historic event”, “the world’s first”, and questionable sales tactics like “If you can’t see the value in contributing $25 to a history making music venture then unfortunately it’s probably just not for you”, it’s hard to take this initiative seriously. The founders of LaunchALabel seem to be under the impression that providing all the details of how the label will work, including creating a less-than professional financial proposal detailing everything from band expenses to office supplies will put me at ease but, unfortunately, it has the opposite effect.
Launch A Label - launchalabel.com
Initiatives like Sellaband [seem to] work because they appreciate the limits of the medium in an industry where, despite the attempts of a new generation of web-savvy, mp3-toting young music execs and entrepreneurs, launching new artists and running a successful label still depends on solid industry experience, industry contacts and solid business sense. The record industry may be suffering from the competition from online music sales, illegal downloading, piracy, etc., but replacing the traditional record industry paradigm in one fell swoop, as LaunchALabel is attempting, is simply not feasible. While you have to give LaunchALabel credit for giving it a go, I think we’re going to see a lot of music fans out there who aren’t too happy about losing $25 to this overreaching venture; 50,000 of them, to be exact.
Originally posted on VIRV TV Blog by Lior
