by : August 2017, Business

Brands and the Future of Music

Brands and the Future of Music

Most brands need to rejuvenate themselves periodically, and this is especially true when their commerce is directed to a younger demographic. Music is a catalyst that brings youth aboard, so its value in product marketing is paramount. The marriage between the brand and the music must make sense of course because music is tied to lifestyle considerations and so is any product that is promoted with music.

However, in some instances, and as will be shown below in the case of Converse Inc., and American shoe and sneakers’ business, the brand can move beyond the idea that a suitable pairing of song and product is quintessential. Just aiding and abetting the production of new music itself may be enough to draw younger generations in. This can be done by offering musicians a unique creative space of their own, separate from the existing music business and without many of the legal caveats that pertain to music’s ownership rights. The arrangement might cost startup money, but entering the supply chain of music under a unique set of circumstances may be the ultimate reward for the brand, which can now be perceived as a facilitator of sorts for young music makers who hope to carry their fans with them along the way.

Converse

In July 2011, Converse officially launched the opening of its first recording studio, Converse Rubber Tracks in Williamsburg, Brooklyn, New York. Converse, part of the cash rich Nike group, quickly made it the centerpiece of its marketing strategy. Free recording time was given to indie bands that were not able to afford studio time, let alone use the services of well-known engineers and producers. Following the opening of Converse Rubber Tracks, the company quickly moved to host a large number of popup studios across the globe. At South by Southwest (SXSW) in Austin, Texas, local bands that did not make the festival were even given the opportunity to record without any expectation of promotional work for the company.

The application process for free studio time is revealing because it shows that Converse is after the working musician only, not the general public – a history of music making, preferably in professional settings is required. Online applications are reviewed thoroughly in three-month windows. Each artist or band is given at least a day or two of studio time, depending on what needs to be accomplished, and can use top of the line equipment and the staff of in-house engineers. The company also positioned itself in the music product market, looking for alliances. At the Converse Rubber Tracks original recording venue, Guitar Center supplied equipment and instruments, including gear from Fender, Gibson, Ernie Ball, BlackStar, Marshall,  and Schecter, and, reportedly, “an Ocean Way HR2 large-format monitor system designed by Grammy award-winning producer/engineer Allen Sides.”

While disputes over ownership splits are typical in the course of doing business, Converse does not behave like a label and makes no legal claims on the recording masters. Artists and musicians who record in Rubber Tracks’ studios retain all rights to their music, although they are given the option of granting the company limited rights to publish the recorded tracks online and across social media platforms. Converse can also use Rubber Tracks-recorded songs as its own digital content, always with artists’ permission.

But this is not an investment model where the appropriation of the product is the right of the financier like it is in the regular marketplace. Here, Converse is performing a service and measures its return not in kind, but against a future brand loyalty coming from the creative community, with which it wants to be associated, and, naturally, its fans. There must be a return for the company that compares well with the expenditure of a traditional advertising campaign.

Indeed, Converse CMO Geoff Cottrill believes strongly in artists’ word of mouth as the biggest and most effective media, given artists’ attachment to fans. The strategy seems to fuel an explosive global growth, which Converse manages with headquarters in Boston, US, and Sao Paulo, Brazil. To date, over 1,400 musical acts have gone through the studio, for a combined total of 11.2K recording hours. Converse Rubber Tracks is now global, with popup studios in 25 cities, including Austin and Amsterdam, among the others. Converse has given access to twelve landmark studios worldwide, covering eight different countries in four continents: the list of associations with famous studios includes Abbey Road Studios in London, Sunset Studios in Los Angeles, The Warehouse Studio in Vancouver, Canada and Tuff Gong in Kingston, Jamaica.

Converse is also able to secure agreements with their recording artists to offer free sampling of their music. To date it has a library of 21K Rubber tracks, and it can offer this catalog free to rappers and DJs – a valuable gift when even a few seconds of a well-known song is out of reach for most indie artists.

Finally, Converse also holds its very own live music festival called Rubber Tracks Live, where its growing roster of recording artists headlines free concerts.

More Brands

Converse might break the mold of artist-sponsor relations. It is more typical for other mass consumer brands that need to revitalize themselves among the younger generations as well to offer sponsorships or licensing deals to their emerging talent. Such is the case of Coke, Pepsi, Red Bull, and Urban Outfitters, among others. More often than not, these deals are with record labels, distributors and booking agencies in the room, as well as the artist. Some examples follow.

Early this year, veteran Austin Indie rock outfit Spoon announced that a limited hot pink vinyl pressing of their impending ninth album Hot Thoughts would be available for purchase exclusively via Urban Outfitters. The brand of Urban Outfitters is often seen as vibrant and cheerful amongst the younger generations. Although many artists have signed exclusive deals with Urban Outfitters, the brand seems to be appealing also to a certain section of young music lovers for which Spoon’s image is desirable. In such a case, an ad hoc short-term arrangement works best for both parties.

In addition, Urban Outfitter also provides a venue at their outlets for artists and musicians to perform their music (artists and musicians who perform usually sport their products). Live music has been a revenue anchor for the business, especially after the single song economy that appeared following the World Wide Web and iTunes ushered the end of the album era. Urban Outfitters’ performances do not involve an exchange of money for a concert ticket, and therefore would not be tallied in the annual totals. Yet, for musicians, such events clearly are of consequence.

Much could be said about Pepsi’s positive interplay with music. Its notable figureheads include Beyonce, Madonna, One Direction, and Faith Hill. Like Converse, but clearly in the league of open artist advocacy for their product, Pepsi’s history of involvement with popular music goes back at least to the 1960s.

Coca-Cola launched a partnership with music licensing agency Music Dealers in 2012 to allow artists to license their material beyond the Music Dealers’ catalog and obtain equal split placement fees and publishing royalties. As reported in this publication, Music Dealers became in effect Coca Cola’s international record label, recruiting talent for one-off song deals with global reach until the demise of Music Dealers last year (see “Music’s Fizzy Logic” and “Coca-Cola and Music: A Case Study”, March 2102 and May 2017, respectively). Coca Cola has financed Idol-type shows in developing countries, where the pyramid of population is skewed to the young.

Red Bull Records, for the Red Bull drink company, which sells its popular beverage as a youthful tonic, was created as an independent label that strongly emphasizes long-term artist development with a global perspective. In January 2015, Red Bull Records teamed with Sony Music for a world distribution deal. Red Bull Publishing, however, seeks to distribute works as fully licensable material to external clients and Red Bull partners, for which it must own all the rights beforehand.

Conclusion

Often times, the impact of mass consumer brands in the music market is undervalued. They expend resources to harness music onto their brand names in ways that are difficult to measure in standard industry metrics, as seen in the case of Converse. But this also largely applies to Pepsi, Coke, Red Bull, and Urban Outfitters. Musicians should be glad and recognize that valuations of the standard market are, from their point of view, incomplete. If music is made and sold outside the confine of the majors, and is promoted by many an iconic company, it is affecting them positively — even if no dollar sale is registered either through the Recording Industry Association of America (the exception is Red Bull Records, whose sales would be reported to the RIAA and counted in its annual totals), or by Pollstar’s and Billboard’s Boxscore when live music concert tickets are at stake.

  This is likely to continue, for, compared with the 1950s-1970s, there is now little stigma shown by talent when projecting their image into a commodity. Tying their own brand name to a product of mass consumption, with all its lifestyle implications – good and bad — is less of an issue now than it has ever been. Fans do not seem to mind and the younger generations may not know better. Moreover, as was the case with Converse, it is advantageous for talent to look for exposure outside the old music echo system when not much needs to be traded in exchange for free production facilities and a favorable press from a big-ticket consumer giant.

All of which suggests that there will be a broadening of the music marketplace in time, as the monopoly over talent exerted by the majors abates. The danger here is that the music trade is evolving to become a complementary trade for other products of mass consumption that ultimately sell for reasons other than the music itself. The irony is that the sovereignty of the music market will be at stake as the existing music echo system expands.

 

By Peter Alhadeff and Shereen Cheong

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Sources:

  1.  https://www.fastcompany.com/3028602/how-converse-supports-musicians-without-the-brand-sponsor-ick-factor
  2. http://www.billboard.com/biz/articles/news/1177132/converses-free-recording-studio-rubber-tracks-opens
  3. https://www.forbes.com/sites/julianmitchell/2015/05/26/converse-rubber-tracks-is-giving-aspiring-artists-free-access-to-12-iconic-studios-worldwide/#43a4bcc95e1a
  4. https://digiday.com/marketing/inside-rubber-tracks-converses-contribution-music-community/
  5. http://howlandechoes.com/2017/03/samsung-pepsi-urban-outfitters-when-brand-partnerships-with-musicians-go-wrong/
  6. http://www.thembj.org/2017/05/coca-cola-and-music-a-case-study/
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