Projection: Brands Will Soon Account for 50% of Industry Revenues...
Percentages can be dangerous in this business, but here's something to chew on: Digitas now projects that 50% of all music industry revenues will come from brands in just a few years. “I would argue half the revenue of the industry in a few years will come from brands," Digitas CEO Laura Lang told an audience at the Cannes Liones media conference today.
The dangerous part is that once-reliable revenue-generators likeCDs are going poof, and similarly-steady sectors like publishing and touring are showing signs of wear. That makes for a much smaller pie, and much bigger percentages for up-and-coming revenue generators. Whether brands become a white knight in that picture—in real dollar terms—is questionable, though there are certainly a myriad of advertising- and branding-related models trying to take advantage of the trend.
Just think of the extreme variety. This includes everything from ad-supported digital formats (ie, Pandora) to multi-million-dollar venue naming rights (ie, Live Nation). In between, we could probably list a dozen variations off the tops of our heads, including concepts as diverse as Bieber colognes and Grooveshark. But the rearview mirror has been harsh on ad-supported startups, and look no further than roadkill like Spiralfrog for proof.
Then there's the whole “band as a brand" thing, an orientation that just doesn't sit right with some artists. The question is whether artist careers should involve hawking products to survive, though maybe this is a future that simply must be embraced. Especially if Digitas' numbers are right.
The dangerous part is that once-reliable revenue-generators likeCDs are going poof, and similarly-steady sectors like publishing and touring are showing signs of wear. That makes for a much smaller pie, and much bigger percentages for up-and-coming revenue generators. Whether brands become a white knight in that picture—in real dollar terms—is questionable, though there are certainly a myriad of advertising- and branding-related models trying to take advantage of the trend.
Just think of the extreme variety. This includes everything from ad-supported digital formats (ie, Pandora) to multi-million-dollar venue naming rights (ie, Live Nation). In between, we could probably list a dozen variations off the tops of our heads, including concepts as diverse as Bieber colognes and Grooveshark. But the rearview mirror has been harsh on ad-supported startups, and look no further than roadkill like Spiralfrog for proof.
Then there's the whole “band as a brand" thing, an orientation that just doesn't sit right with some artists. The question is whether artist careers should involve hawking products to survive, though maybe this is a future that simply must be embraced. Especially if Digitas' numbers are right.
