When the Rolling Stones agreed to lend Microsoft (Nasdaq: MSFT ) their "Start Me Up" hit to launch the Windows 95 operating system, the band sparked a major outcry over rock-n-roll sellouts. What used to be synonymous with counterculture had now become pop culture.
The Stones certainly weren't the first rockers to become corporate shills, but the situation hasn't improved any since then. The final nail in the recording industry's coffin, however, may be the rise of so-called "branded music." While it may not be a new concept, it's a considerably more virulent one.
Name that tune
According to Forrester Research, total revenue from music sales and licensing was more than cut in half over the past decade, plunging from $14.6 billion to $6.3 billion. The Recording Industry Association of America says album sales have fallen an average of 8% each year over that time period.
If the phenomenon of branded music takes hold, the recording industry won't be able to lay the blame for declining music sales on peer-to-peer downloading via Limewire or other software clients. Today's music is already fairly insipid, and what passes for a hit today probably wouldn't have succeeded as a B-side years ago.
The sponsoring companies like to think of themselves as "curators" of music, patrons of the arts. Where major labels used to provide the backing for artists, now NASCAR, Carhartt, and Coca-Cola (NYSE: KO ) are acting as the artist's bank. This emerging trend -- rock stars as brand spokespeople -- gives a whole new definition to the term "corporate rock."
They're not the Medicis
Branded music doesn't involve a celebrity endorsement, or a band releasing a CD compilation exclusively for Starbucks (Nasdaq: SBUX ) or Victoria's Secret, or AC/DC writing the soundtrack for Disney (NYSE: DIS ) subsidiary Marvel's upcoming Iron Man 2 movie. (I would've preferred Black Sabbath, with or without Ozzy Osbourne.) Instead, it involves corporations bankrolling bands to create songs specific to the company or product.
There's a precedent of sorts for this in the publishing industry. Amazon.com (Nasdaq: AMZN ) will pay authors 70% of the list price of books sold that are written for the Kindle. It hopes to encourage more writers and publishers to take advantage of the lower cost e-reader delivery platform. But there's a big difference in getting paid for writing a book for the Kindle, and writing one about it.
Get your motor running
Banshee Music has become a leader at this, producing "Defend the Dome" for the Atlanta Falcons, "Bristol Nights" for NASCAR's Bristol Motor Speedway, and "Party Up at the Downs" for the Kentucky Derby.
Toyota (NYSE: TM ) started a similar tactic a few years ago. Its youth-oriented Scion brand launched a music label with the idea of extending the brand through association, though even that was more about the music than the brand.
More recently, Converse sneakers got the ball rolling when it hired musicians Pharrell Williams, Santogold, and Julian Casablancas from the group The Strokes to write a song, "My Drive Thru," for the company's 100th anniversary. PepsiCo (NYSE: PEP ) is doing the same thing through Green Label Sound, a singles-only label based around its Mountain Dew drink.
How much does banal cost?
Forrester says just 44% of U.S. Internet users and 64% of Americans who buy digital music think that music is worth paying for. And that's from the people who actually pay for it. Is it any wonder many people don't?
If corporations want to become patrons of the arts, that's all well and good. Musicians need a new business model. But co-opting artists to churn out corporate pitches is hardly the innovation that will going to save the music.
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