Music gets digitally tuned-up

Before the dawn of the digital age, music marketing used to be all about getting played on radio and MTV.

Before the dawn of the digital age, music marketing and promotion used to be all about getting played on radio and MTV and scoring good reviews.

HT Image

But the game has changed dramatically as fans turn increasingly to the Web and digital and mobile music services.

While the music industry has suffered sales declines and been forced to re-evaluate its business models, one area that has benefited is marketing, where costs have increasingly been underwritten by new partners in the technology sector.

"The overall marketing dollars may or may not be the same, but the money's not just coming out of labels' pockets anymore. There are many new partners who want exclusive content and are willing to pay for it," one music executive said.

For Madonna's multimillion-dollar marketing campaign for her album "Confessions On A Dancefloor," the singer released her single "Hung Up" as a ringtone ahead of the radio debut in October, marking a first for a star of Madonna's stature.

Various artists have also struck deals with Internet and mobile-telephone companies who have become partners in an album's release in exchange for the rights to sell audio and visual downloads of songs.

Wireless companies see content, especially exclusive content like a new song, as key to boosting new revenue and new customers.

Adam Klein, executive vice president of Strategy and Development for EMI Group Plc's EMI Music, said Verizon Communications has invested a "considerable amount of advertising dollars" in one of EMI's groups, "Yellowcard," to launch a service that lets customers download music to mobile phones wirelessly.

The market for music videos, long viewed primarily as marketing tools, has also changed immensely.

After years of supplying videos free of charge to MTV and other outlets, record labels are now getting revenues for videos from Internet, cable, satellite and wireless services.

"Videos have become extremely important as an asset and revenue stream. We're now seeing people putting money into them where previously they were taking it out," said Klein.

To be sure, heavy radio airplay is still considered key to fueling record sales, but technological and economic changes and a recent probe by New York Attorney General Eliot Spitzer into corruption involving music promotion in the radio and record sectors have led to a reexamination of traditional marketing and promotion methods.

"I'd say the changes have only begun. Record labels are still extremely conscious of radio airplay charts, but becoming less so. They're learning there are many games besides the traditional charts game for promoting music," said Dave Beasing at Jacobs Media, a radio consulting firm.

Beasing said he embraced the fact that labels were turning to Web communities like News Corp's Myspace.com and releasing songs as ringtones to create a buzz ahead of radio.

"In days past, it might not have been a welcome thing for radio. We always wanted to be first to play and break music, but now we'd rather be known for playing good music instead of all music," he said.

Terrestrial -- nonsatellite -- radio companies are currently upgrading to high-definition services and expanding their presence in other mediums, like the Web, to compete in the changing marketplace.

"Consumer behavior has changed. Listeners no longer only get their music on radio and TV. They're spending more and more time online and on devices like cell phones. We're making sure our brands reach listeners in a variety of ways," said Evan Harrison, who leads the Online Music and Radio division for Clear Channel Communications Inc, the biggest US radio operator.

Harrison, a former AOL executive, has sought to enhance Clear Channel's local station brands by providing exclusive and original on-demand online content and a Web concert series; by streaming music from new and developing artists and streaming high-profile CDs before their street dates; and through on-demand videos and podcasts of morning-show bits.

He said these initiatives have helped new artists increase their audience base and create anticipation for upcoming releases.

Digital track sales more than doubled in 2005 to 352 million, while overall US album sales sank 7 per cent, according to Nielsen Soundscan.

"Each year, we're looking at the landscape and how digital growth and opportunities are providing more avenues for the roll-out of projects," said Craig Kallman, chief executive officer of Warner Music Group Corp's Atlantic Records.