July 7, 2008
Brands and companies are taking on the role of record label as the old model of music distribution continues to die. Proctor & Gamble, Nike, Red Bull, Unilever, Converse and Bacardi are all forming relationships with artists and providing payment, publicity and distribution for their songs. It becomes a win-win situation as the musicians get paid well to continue their work, and the brands share the limelight generated. The deals are reported to be far better than musicians were getting from traditional record companies. Most artists maintain the rights to their work after a period of time, and the revenue sharing is far more generous.
The New York Times reports:
Procter & Gamble, for example, is joining Island Def Jam in a joint venture called Tag Records, a label that will sign and release albums by new hip-hop acts. It is named after a brand of body spray that P.& G. acquired when it bought Gillette.
And Mr. Dupri, a music-industry veteran and the longtime partner of the singer Janet Jackson, sounds quite pleased with his new gig.
“I’ve never seen someone wanting to devote this much money to breaking new artists,” said Mr. Dupri, who will serve as president of Tag Records while keeping his position at Island Def Jam. “Nobody in the music business has the marketing budget that I have.”
At a time when online file-sharing is rampant, record stores are closing and consumers are buying singles instead of albums, getting into the music business might seem like running into a burning building. But as record labels struggle to adjust to a harsh new digital reality, other companies are stepping up their involvement in music, going far beyond standard endorsement contracts and the use of songs in commercials.