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New Revenue Streams and Changing Promotional Strategies in Music

February 25, 2011

A lot of the talk in the music business these days focuses on new revenue streams and marketing strategies, since the digital age has diminished the returns on recorded music.  We need not look further than Britney Spears’ new video, “Hold it Against Me,” or Radiohead’s release of its new album, “The King of Limbs,” for proof.  Spears’ new video made headlines for allegedly earning her $500,000 through product placement.  Radiohead, on the other hand, continues its pioneering spirit towards album marketing by releasing its new album for download on their website in several formats.  The headlines show how two starkly different types of artists are approaching the new digital music world.  I may be a bit jaded on the pop stars of our day, but I think that here, Spears basically represents how the major record labels and corporations are tackling the problem, in contrast to Radiohead, who is the shining example for a lot of independent artists, and I assume has a lot more input in their promotional and marketing decisions.

In case you want to see product placement in action, here’s one source’s list of the cameos in “Hold it Against Me”:

0:39 – Britney is handed a bottle of perfume, which she sprays on herself, followed by a close-up shot of Radiance logo
0:47 – Make Up Forever eyeshadow appears in shot, followed by a shot in which Britney applies the eyeshadow
1:27 – First shot of Plenty of Fish screen
1:30 – Britney clicks on Plenty of Fish logo
1:32 – Britney clicks on Plenty of Fish logo again
1:34 – Shot of Sony logo
1:35 – Plenty of Fish logo appears prominently in shot
1:36 – Shot of Plenty of Fish profile page
2:40 – Close shot of Sony logo
2:41 – Shot of Britney performing on Sony TV

Anyways, the product placement is blatant and only makes a bad video worse.  What Britney is doing floating 30 feet up in the Architect’s room from “The Matrix” in a wedding dress is beyond me.  The whole thing reminds me of a (dork alert!) Final Fantasy VII fight scene.  But, the point is, that the [former] pop queen took down $500,000.  Now, I imagine that the majority of that went to various companies, but it’s clear that Vevo, and in a larger sense, music videos, are being tested out by the music business for potential revenue.  As an added bonus, music videos can go on the internet as well as music TV stations (MTV, MTV2, Palladia, etc.).

The video perspective serves as a nice segue into a discussion of Radiohead, since Thom Yorke’s dance for the new song “Lotus Flower” has gone viral (over 5 million hits at this time).  IMHO, Yorke completely outdances Spears and it’s not really that close.  To get back on point though, Radiohead has gone away from the pay-as-much-as-you-want pre-release of their last album, “In Rainbows,” and is offering their new album in a variety of formats and with bonus items for the more expensive purchases.  For $10, you can buy the low-quality (mp3) version of the album, a high-end (wav) version for $15, or get the wav version plus artwork for ~$50.  I’m sure they did some research about price points, but at first blush it seems that the low end isn’t low enough (personally, I’d be much more inclined to download an album I kiiiind of want at $5-6) and the high end is too high ($35 for artwork???).  I do like the progressive pricing scheme, though, but really, when you’ve reached the point Radiohead has, you’re tweaking with a product that is probably going to sell regardless.  I’d like to expand on this, but that’s going to require its own post, which is hopefully coming soon.

In the meantime, I’m fascinated by the way artists (and companies) are going at the money making problem in modern music.  The major pop stars of our day have the power of large corporations still behind them and we see that influence in their “360 deals,” agreements which involve the artists relinquishing their rights to everything, but their souls (although I’m not sure Bieber ever had one).  Spears’ corporate backers saw an opportunity to recoup some of their costs and make revenue on this video, which they were probably going to make anyways.  In contrast, independent artists, like Radiohead, are trying to give their fans more choice.  It’s a microcosm of how both genres are heard–pop music being blasted into people’s ears from every which way, while indies appeal for the attention of a smaller group of listeners by giving them different and unique options.


One Comment leave one →
  1. T Mann permalink
    February 26, 2011 9:00 am

    Your name is actually Leo.

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