Bills Blog

There are few categories that have gone through as tumultuous a change as the music industry. Think for a moment about the sheer magnitude of evolution over just the past two decades: vinyl to CD, AM to FM, MP3 to streaming radio. We've experienced product and brand cannibalization in its purest form.  This hasn't abated as paid-for MP3 downloads are now in decline, which sparks new worries about the impending death of the music industry. This doomsday prediction has been heard before, but has always subsided as new technologies found acceptance with music lovers.  The industry is still very much alive. It is simply going through another category upheaval. Apple drove the last category change by creating iTunes which revolutionized the way the industry distributed music, and how consumers bought it. This game-changing technology allowed users to download music to their computer and pick and choose single songs.  The program was uniquely personalized and engaging in a way that no other distribution channel had mastered before. The digital download became this generation's 45.   The same product - a single song - just distributed differently.  What's old was new again.

In a category that is so rampant with change - what is the next big thing? The new trend is Internet radio. Free sites for streaming radio have the very real potential to threaten the future livelihood of the music industry. Pandora is the hot brand du jour, offering the ultimate in music engagement.  It allows users to create their own radio stations based on genre and artist and listen to them relatively commercial-free.  Users can "like" and "dislike" songs in order to optimize their listening experience. Pandora-like sites are exploding daily. With music becoming "free", it begs the question - are people less and less willing to pay for it? The music download is quickly becoming ancient history, and industry profit margins are being washed away as well. 

With the constant change and innovation, musicians and executives must keep an open mind to new technologies and potential revenue streams.  They can no longer be content just to extend and defend, but must search out new ways to drive revenue and profit growth.  Long a staple among movies and TV, product placement is finding a permanent niche in the music video segment. The shifting tides of the music industry and new economic models have caused artists to rethink any anti-commercial ideology and embrace product placement. Recently, many musicians have adopted product placement as a means to reaching the revenue end game.

Lady Gaga and Beyoncé feature rampant product placement in their Telephone video, generating considerable chatter from media and marketing experts.  What makes Telephone so buzz worthy is its fence-straddling posture between being blatantly commercial and aesthetically artistic. The obvious product placements for Virgin Mobile, Diet Coke, Miracle Whip, and more are heavy-handed.  In addition to music videos, product placement has found its way into song lyrics and concert tours. Rap artist Nelly features a song titled "Air Force Ones", and Travie McCoy claims "I wanna be on the cover of Forbes Magazine" in his 2010 summer hit Billionaire.  California Girls, the recent chart-topping single by Katy Perry and Snoop Dogg has not one, but two mentions of the Jeep brand. The Black Eyed Peas toured this summer with sponsors Blackberry and Bacardi advertising on t-shirts, tickets, posters, and even between sets at the concert. The lines between business and music are continuing to be blurred and crossed by musicians and studios alike.  The new credo is - follow the money! 

Do these placements work?  Can they move product and drive brand loyalty?  Celebrity endorsement is a slippery slope for marketers to traverse. The primary criteria needs to be - is it right for the brand? In the Telephone video, Lady Gaga spends an entire scene making sandwiches with a bottle of Miracle Whip mayonnaise.  Product placements don't get any more blatant than that. Miracle Whip is trying to contemporize the mayonnaise category.  This video was highly sexualized, and is being played out endlessly via YouTube, VH1 and other outlets that cater to the 18-24 demographic. Does Miracle Whip's Telephone placement make a 19-year-old college student run out and buy mayo? Highly unlikely. In fact, the sexually charged nature of the content runs the risk of ruining the brand by fueling jokes and innuendos.  The majority of time, your brand of Mayonnaise is a personal one - based solely on what you grew up with. The only one who benefits is Lady Gaga - the ultimate marketer in today's new-era music industry.

Although musicians are brands themselves at their very core, they're seeking ways to extend their brands deeper and broader. This ensures profits across multiple industries and categories, not just limiting themselves to their music niches. The best example of personal branding is artist Sean Combs - "P. Diddy". Combs, having made a name for himself in the Hip-Hop world, has been able to evolve beyond music with his Sean John clothing and cologne line, his Ciroc brand of vodka, and even his politically charged MTV "Vote or Die" campaign. He is the star of MTV's Making the Band, and founder and CEO of Bad Boy records. Combs' marketing and branding prowess has been the catalyst for transcending the hip hop niche and entering the mainstream, earning Sean John clothing a spot on the Macy's shelves. His elastic branding philosophy is a textbook case of evolving in sync with a changing industry. This continual brand extension is working for Combs, to the tune of an estimated $380 million net worth, and a permanent ranking on Forbes' "Top 20 Celebrities" list. The only dilemma for artists is one that they've struggled with for decades: being a business success or an industry sellout. There is often a delicate balance that fans are left to decide.  Musicians realize they must be distinct, or be extinct.