There’s a saying about radio: it’s not the music business, it’s the advertising business. The new partnership between Universal Music Group and Havas Media is proof the same can be said of the larger music industry.
The trend should be obvious by now. Listening is moving from purchased music to music that relies on advertising. Streaming services like Pandora are almost entirely driven by advertising. Subscription services like Spotify rely on advertising — major brands wanted — in order to provide free listening. Many artists, some with nothing more than a hit single and a large social media following, increasingly rely on brands’ sponsorship dollars. And brands are an integral part of live music — sponsorships and advertising accounted for $158.8 million of Live Nation’s $194 million of operating income in the first nine months of 2014.
It’s the era of multi-rights artist contracts — known as “360 deals” — and brands are necessary and needed. Labels are now in the business of securing brand partnerships for their artists — and taking a share of the revenue. Brands’ marketing and advertising muscle help labels with the costly business of developing new artists and creating global awareness for releases by already developed artists.
So it’s no surprise that Universal Music Group has partnered with Havas Media, a content and data arm of Havas Worldwide, a conglomerate that, according to its website, “aims to be the world’s best company at creating meaningful connections between people and brands through creativity, media and innovation.” The result is Global Music Data Alliance, a vaguely described venture that will help UMG leverage fan data with Havas’s consumer behavior insights to “to realize previously untapped revenues from consumer brands and other new business partners” for its artists, as UMG head Lucian Grainge said in a statement.
Another saying is applicable here: so much data, so little time. Music companies are increasingly relying out specialists to help them gather, visualize and make sense of data related to their artists. As the world’s largest music company, UMG has an incredible amount of data. Dominique Delport, global managing director of Havas Media Group, says the two companies “are taking it to the next level by bringing in Havas data scientists and algorithm experts, merging the two worlds.”
Insights gained can be used to understand artists’ fans and collaborate with the most appropriate bands with the most appropriate experiences. A peek at Havas’s work offers clues about the joint venture’s possible output: the “Jessie J Live in London” concert for Glaceau Vitaminwater; a VIP performance by Moby to showcase O2’s new, smaller venue, indigO2; and other initiatives to help its clients position or launch their products.
An anecdote will help people appreciate how much the music business has changed. Back in 1991, the Black Crowes were kicked off a tour with ZZ Top for expressing — on stage, no less — its displeasure of performing at concerts sponsored by Miller Beer. “We’re the Black Crowes. We’re sponsored by ourselves,” singer Chris Robinson reportedly told MTV after the band’s dismissal. The days of artists tip-toeing around brands’ involvement in music is long over. Welcome to the new music business.
