Corporate Sponsorship: Bacardi, Groove Armada in 360 Deal

From Lars Brandle, Billboard:

Global spirits giant Bacardi has developed a serious thirst for music, via a 360-degree-style deal with British electronic duo Groove Armada.

The integrated marketing deal encompasses recordings, touring and audiovisual content, leading Bacardi global experiential manager Sarah Tinsley to declare: "Essentially we are taking over the role of a record label -- producing the music, promoting new music, and the artist is playing at our events."

"Bacardi doesn't see this as something that they want to earn money from, which is, quite rightly, something a label has to do," Groove Armada manager Dan O'Neil says. "They are looking at it from a point of view of association, and they're getting access to a license to use the music to implement their strategy worldwide."

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Corporate Sponsorship: Levi's Jeans Record Company

From Sydney Morning Herald:

This year the Levi's jeans company started its own record label, Levity, to foster Australian and New Zealand music. Levi's pays the recording, distribution and marketing costs, and the acts agree to appear in the company's marketing.

The Sydney band Mercy Arms and the New Zealand group Cut Off Your Hands were the first to sign. They have released EPs and are to go on tour in the next few weeks, significant steps for two relatively unknown acts.

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Related: Red Bull to Enter Music Industry

Intel Getting Into Music Business

From Kamau High, Adweek:

The computer chip maker for the first time has commissioned a commercial artist to not only write a song about one of its products but also shoot a music video. Working with independent Woo Agency, Intel hired Sean Kingston, who sang the summer hit "Beautiful Girls," to pen the song "Gotta Move Faster" and shoot the subsequent video.

Link

Related: Want a Record Deal? Talk to General Motors

RCRD LBL: Don’t Buy The Hype

Cayocosta

Seems everybody’s pretty quick to jump the gun in the race for a new-music model lately as each new startup is routinely being touted in the press as the potential savior of the industry - which should also raise the question of how much of this mass speculation is no more than opportunistic hype - with the latest case in point being Rcrd Lbl.

Nothing New

Music-licensing and Internet sites featuring free mp3 downloads subsidized via advertising are nothing new. Rcrd Lbl - besides having possibly the worst name in the history of business - has simply combined the two.

Despite its flamboyant introduction, Rcrd Lbl is not a business specifically designed to make money through advertising while providing free music downloads; instead the company focuses on traditional music-licensing for the bulk of its income and appears to consider advertising revenue as supplementary - for artists will not even participate.

Instead, under this new "model," artists are (reportedly) offered between $500 and $5000 in exchange for the exclusive right of Rcrd Lbl to license a track to third parties (as well as the right to give the track away for free) with the stipulation that upon such licensing, the resulting revenue is split.

(Unfortunately, it remains unclear as to the artist’s share of licensing income, as well as whether or not advances are recoupable, and if Rcrd Lbl rights include the ability to license a track to any advertiser without consent - potentially effecting an endorsement against the artist’s will.)

Record Label?

Nothing appears to have been mentioned regarding this startup actually making records, consequently it’s unlikely this business plan is even a candidate for a limited solution for the troubled recording industry. Josh Deutsch, chairman of Rcrd Lbl admitted as much to the Wall Street Journal when he offered, "I'm not saying Rcrd Lbl is the answer, but it's an answer to [the question of] 'How do you monetize music?' "

Again, monetizing music via licensing is nothing new, and Columbia’s use of Google advertising on it’s website could technically be considered as having beat them to that particular punch. So, what’s the big deal?

Blog Format

Considering Rcrd Lbl boasts as having signed 50 artists to date, the blog format does not appear to have been a good choice, for artist visibility is already limited with only a handful of acts featured on the front page; moreover, there exists a possibility the company’s credibility could be jeopardized should customers decide their blogging represents self-interested propaganda.

P2P

As with any free-music/advertising model, there is nothing preventing tracks from becoming widely distributed via P2P networks, which could result in disappointing advertising revenue via the circumvention, in this case, of the Rcrd Lbl site itself. (Possibly this is the reason they have chosen to place their emphasis on licensing as opposed to advertising; and if so, constitutes further evidence the free-music/advertising concept is weak.)

Summary

Rather than a new-music panacea or record company in the traditional sense, Rcrd Lbl appears to be just a music-licensing marketplace featuring free promotional mp3 downloads of the tracks being offered – a one-stop of sorts whereby organizations can license music for use in television, commercials and film; and for artists in search of such opportunities, a showcase for their work.

Not a bad idea from a purely licensing perspective, and it stands to reason that we could see additional startups (devoid of any record company baggage or blog pretense) emerge based on a similar concept but with a more concentrated focus on improving and/or enhancing the music-licensing experience for both artist and licensee - perhaps partially facilitated via the inclusion of an auction.

With regard to Rcrd Lbl itself, in my opinion their manifestation of the entity as a free-music record label (and blog) compromises the ultimate capability of what is essentially a licensing mechanism (and appears to be no more than an attempt to leverage the current climate of sensationalist anti-label rhetoric surrounding the industry) and as such we may witness their being trumped by a more focused competitor in very short order. Moreover, in that Rcrd Lbl is a sister company to Downtown Records, the specter of nepotism may prove to be a major deterrent for outsiders considering participation, thus further limiting the company’s attractiveness.

The Growing Importance of Sponsorship

Cayocosta

Too many choices.

Where radio and television once provided the filter mechanism whereby the best of new music was disseminated, artists today are now faced with an environment that places the onus largely on the consumer to find the music he or she most appreciates; and with the continued roll-out of music portals and services featuring potentially disparate content, it's probably not going to get any easier for listeners to discover new music in the near-term.

However, it's highly likely that we'll eventually reach a point somewhere down the road whereby the entire library of popular-music will be made available via streaming from a variety of providers offering one-stop solutions.

As wonderful a scenario this might appear to be from a convenience standpoint for music consumers; and with regard to distribution, for artists (as they would also benefit, as music streaming subscription services would facilitate a truly level playing field, for every artist’s music would be equally available to everyone from a single point of origin); listeners may ultimately find themselves in an environment where new music is even more difficult to discover than today; and artists, a platform significantly more competitive in which to promote their work.

As even viral propagation is predicated upon a critical mass of enthusiasts, how then could any particular track attain sufficient visibility in a virtual ocean of music?

The answer is sponsorship.

Therefore, it stands to reason that those artists with corporate support and/or major record company representation will rise above the fray and experience an otherwise disproportionate share of visibility. For then, as now, such artists will continue to reap the benefits of promotional expertise, influence, capital funding, and horizontal integration; whereas independent artists, relying primarily upon the Internet to promote themselves, will find that the low barriers to entry continue to result in their being lost at sea.

Red Bull to Enter Music Industry?

From Digital Music News:

Red Bull is now pushing a serious music initiative, according to numerous sources to Digital Music News. The initiative has been underway for a considerable period of time, and already involves executive placements and the construction of a studio facility. The exact nature or charter of the group remains unclear, and may be fluid, according to one source. A stand-alone recording label appears one possibility, though a broader, 360-degree concept that integrates into larger Red Bull branding seems more plausible.

Link

Want a Record Deal? Talk to General Motors

Cayocosta

In an era where the future profitability of the music-industry is in question; it follows that it probably won't be too long before record companies (and/or management organizations) begin to routinely source investment capital on behalf of their new artists directly from corporate sponsors in an effort to not only offset, but likewise reduce their exposure to risk attributable to, the considerable expense traditionally required to properly develop same.

In light of the above, it would appear reasonable to assume that a fast-track approach to success for new artists would similarly be the direct solicitation of corporate sponsorship; for having first secured proper funding (in addition to establishing a relationship that facilitates artist promotion via corporate advertising) everything else required would easily fall in line.

However, it must be mentioned that under such conditions, the potentiality for a climate to emerge whereby artists find themselves increasingly dependent upon corporations (that do not specialize in entertainment) as the primary sponsors of their work, is heightened; commensurately increasing the eventuality of artistic compromise. It correspondingly follows that should such a system manifest itself; as part and parcel of the underwriting of such new risk, corporate sponsors would likely seek - over time - increasing levels of control over content (and in the case of indirect relationships, an additional influence upon the selection of talent) so as to help ensure a maximum return on investment.

Brave new world indeed.