Tag Archives: endorsements

Popping up on a high street near you

By September 30 2009, 3:04 pm 2 Comments

HMV’s name jumped out at us during a trawl through the music headlines a week or so back. If you didn’t see it the entertainment retailer announced it would be taking advantage of empty real-estate in the recession-hit high street to open temporary pop-up stores in some of the UK’s mid-sized towns. Hats off to this great idea to cope with Christmas demand.

But there’s no reason should this type of initiative should be confined to traditional retailers. While the concept of pop-up stores is not new, taking this principle and applying it to the world of music and brands might have some interesting consequences. What better way to drive awareness and engagement than by making a splash on the nation’s high street? Don’t wait for the customers to come to you, go and find them.

Take a music service rollout that is struggling to gain traction. A simple pop-up demonstration store with some smart incentives and maybe a few bands would almost certainly draw a crowd. Alternatively a clothing brand with a music campaign in full swing could easily replicate the HMV model and establish a physical presence nationwide to support its core activity. There would be space for live music, unique dressing of the location and bespoke promotions that might not be feasible in the permanent stores. Flexibility has to be the key advantage here.

Maybe we’re too focused on the virtual world and not enough on the real world on our doorstep. There must be logic in trading the social network site that’s attract a handful of would-be customers, for a pop-up store that brings your brand activity to life on the high street.

Is this reality of a pop-up music brand experiences viable? As with anything it would depend on a lot of factors to consider – location, budgets, proximity of your target audience – but there’s no reason to think it won’t happen on a high street near you soon. Watch that empty space

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UK Brand investment in music totals £89M in 2008

By July 22 2009, 1:27 pm 1 Comment

A new report from UK royalty collection society PRS for Music points to growth within the music sector despite the economic problems and continuing piracy issues – with the overall size of the UK music industry growing by 4.7% to be worth £3.6B in 2008. The report also highlights the need to create a balanced account of revenue across the full spectrum of the industry. As well as traditional label revenue, and the substantial live market, the wide reach derived from B2B revenues, such as licensing, advertising and sponsorship, increased by 10% to £925M during 2008, despite a slump in spending by major advertisers. You can download the full PRS report here.
 
Will Page, chief economist at PRS, emphasizes the importance of brand revenue to the overall picture. He highlights data provided by FRUKT – which outlines an £89M spend in music from brands – saying it “introduces us to a source of revenue which isn’t new, but has arguably been omitted from much of the industry analysis to date”. Advertising support (£24M) and live sponsorship (£23M) dominate, however there is a ground swell with regards to digital investment (up almost 20%) and brands being prepared to step away from the big names and events to embrace niche and emerging music. Jack Horner, Creative Director, FRUKT, says: “Brand investment in music is more innovative than ever before, with more consumer brands understanding that a long term view and clear definition of a role within music is critical to their acceptance and success. As brands move from the old approach of badging and towards developing content, music offers the opportunity to create truly engaging platforms. These investments in music are becoming a valuable revenue stream for the music industry, hence the openness with which all parties now approach collaborations and the increase in deals”.
 
Brand investment: the numbers
 
•    Advertising support = £24M (27%)
•    Live music sponsorship = £23M (27%)
•    TV = £25M (28%)
•    Event creation = £8M (10%)
•    Digital = £5M (5%)
•    Artist endorsement =  £3M (3%)
 
We’ll be looking at this area again in our upcoming FRUKT Music Intelligence Report 003. In the meantime it’s worth considering how ingrained endorsements have become in both the brand psyche and the bank accounts of major artists.  
 
Beyonce was ranked 4th on Forbes Celebrity 100 earlier this month with fairly staggering earnings of $87M. The Beyonce brand has gone from strength to strength with revenue diversifying away from the more traditional roots of album sales. That’s not to say she’s not shifting plenty of albums, around $29M of her earnings came in from direct music sales. However, other revenue generators based around the Beyonce brand dwarf this. She netted $14M in a combination of concert ticket and merchandise sales, highlighting the importance of her new tour on forthcoming earnings. However, putting album sales and live revenue to one side, Beyonce has pulled in $15M from her fashion line (Dereon) – she has announced her intention to give away Dereon handbags and a pair of Dereon sunglasses via a text competition during her current tour – and a massive $20M from brand endorsements.
 
With a string of endorsement campaigns for Armani, Nintendo, L’Oreal and Trident gum under her belt, the figures here highlight just how much brands are financing music. The question however is whether brands are getting the required ROI by aligning with artists in this way? Simply badging a product with a celebrity, or having product touched by the hand of a major singer can often provide the midas touch for artists but not always for the brand. Many brands are now moving to deeper relationships with musicians that offer additional creative freedom for the acts involved and also provide more long-term investment opportunities for fans. Badging certainly has its place, but followed up with deeper long-term music investment it can offer a more lucrative reward for all parties – brand, band and fan – over time.

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