Why Brands Hold All The Aces

This week's extract of HIT BRANDS describes the 'intentionally irrational, explicitly obtuse and unapologetically illogical state' of the B2B market for music.

Introducing the Hit Brands Model

If the game is called Hit Brands then the aim of the game is to create value between the players: consumer brands, customers, musicians and the agencies that connect them together.

Everything we do is aimed at building, adding, banking and spending 'value' in some form or another. Value is not necessarily monetary; though dollar signs certainly help us to keep score. Value is not soft and fluffy either, there always has to be a measure. Value is a combination of practical, emotional and reputational factors that combine to deliver measurable benefits to the business.

In setting out to write this book, the three of us set ourselves the goal of fully defining the complex relationships between music and brands. In doing so, we discovered a model that (to date) has been both specific and general enough to allow us to classify all the case studies we have seen into just three essential categories that together touch all the various components of any brand. The creation of our model is useful as, now defined, it provides a framework for creating and measuring value. It serves neatly as shorthand for the types of activity that brands undertake, and also enables us as practitioners (albeit with interests in the theoretical) to help the marketing and music industries to talk together positively and with clarity.

This sidesteps us to another reason why this book had to be writ­ten. The music industry as defined by its key stakeholders - artists, labels, publishers and distributors - has traditionally viewed the marketing industry, comprising brands and their agencies, as little more than a piggy bank. The view that brand money was somehow 'soft; to be taken and spent as a kind of bonus or subsidy to the 'real' music industry pervaded throughout the late 20th century and into the start of this century. The only thing that has changed in recent years with the demise of physical sales of recorded music, is that the record business (the part of the music industry that used to sell plastic discs to people) has run out of steam so thoroughly that any­ one left in that business is not only lucky to have a job but probably smart enough to know that playing nicely with brands is a smart idea. Each of us is on the receiving end every week of hundreds of requests from the music industry on how they can get involved with brands. So the music industry has had to work out how it can bring value to brands. Not just by way of licensing tracks to commercials, which we could label as the lowest common denominator in the Hit Brand model, but also by moving into truer partnerships, where a brand's ability to distribute music is appreciated, and music's ability to con­nect with an audience is paramount. Distributors used to be the people who would ship first vinyl, then cassettes, then finally compact discs to retailers. They would physi­cally distribute music to the public through the retail channel while the public, completely in the thrall of the music industry, was utterly addicted to buying and owning recorded songs. Then everything changed. First with Napster, then with a slew of torrent sites for peer- to-peer file sharing, and now streaming ser­vices such as Spotify, Pandora and even iTunes have come along to feed the public's addiction to music to such an extent that they no longer need to buy CDs. People still need to hear music; in fact it is now a ubiquitous accompaniment to every waking moment from the alarm in the morning, to the gym, the commute, shopping, at work and at play. But people don't need to own it any more and certainly don't need to pay anything like the levels they once did for the joy of ownership. We know that music has value in spite of people's reluc­tance to hand over their cash for a copy.

So the buyers stopped buying, the retailers stopped selling and consequently the distributors stopped distributing. So what? So the people making and recording music lost part of their ability to get heard, to get in front of a buying audience. No longer 'racked' and promoted in store, the music industry had to find new paths to mar­ket. Live concerts filled the void, as did a return to old-fashioned radio plugging and as much online and direct-to-consumer activity as they could manage. While the rest of the music industry was in flux, however, one line of income stayed steady and started to grow. You could call it the Business to Business (B2B) music industry, which has been a con­stant and a salvation for many record labels and publishers. It has an intact supply chain, in fact its distribution model is growing all the time. It is a fully functioning market and though it is, forgive the pun, a little 'unsung; it nonetheless provides the context within which hit brands reside.

Brands are acting as distributors of music. The money they spend on licenses and the media amplification of the music they choose makes them a serious force for breaking new music, getting it heard and even getting it bought. This is a truth and also an opportunity that some brands are failing to realize while more and more brands are managing to seize. The budgets that successful businesses across industry sectors are putting into the music industry are significant but the value of the assets being created in 110 way reflects the invest­ment. Why are brands - and we use the term as a shortcut for the marketing and advertising folk who control the budgets - unable to see that they hold the aces? That the music industry does not serve them well and that things could be so much better?

It has always occurred to us, your humble authors, that the B2B market for music is almost wholly irrational, by which we mean there is 110 globally accepted method for choosing the music for a brand, no globally accepted method for pricing the music for a brand and no globally accepted method for measuring the usefulness of music for a brand. In fact, there is such a complete lack of these things that the conclusion might be that the B2B music market is intentionally irrational, explicitly obtuse and unapologetically illogical. The answer to the question 'How much would it cost?' is invariably 'Whatever they say' and recalls the old joke that, when asked what he does for a living, a music publisher once responded 'I answer the phone.'....

Daniel M Jackson - CEO, CORD

with Eric Sheinkop and Richard Jankovich