THE NEW MUSIC ECONOMY (PT 1).

THE NEW MUSIC ECONOMY (PT 1).

The traditional music industry like we used to know it has control-alt-delete, and evolved into a dynamic mutant or its next incarnation called the “new music economy” and with it has come dramatic changes. Change as they say, is the only thing that is constant and guaranteed in the realms of mortal existence.

I was on the internet the other day checking my Facebook account when I saw a strip on the discussion wall of one Kayode Ogundamisi captioned, “Glo mobile’s misplaced priority: 500 million naira given to Naija’s artiste”. There was an ensuing hot debate from concerned and ‘patriotic’ Nigerians on the legality and morality of such spending. The arguments ranged from Glo’s ego tripping, to gross insensitivity to the plight of unemployed graduates, a shallow sense of corporate social responsibility and of course, money laundering and the list goes on. Honest opinions in all and well said, but permit me to use this phrase made popular by that late military despot, “fellow Nigerians” you are welcomed to the realities of the new brand-led music economy.

As the traditional music industry model breathes its last and gradually gives way to the emergence of the new music economy, the dynamics behind the business of selling music continue to shift to-and-fro like a troubled ship in a storm; CD sales continue their helpless downward spiral, yet, there is an all-time high and unprecedented demand for music consumption globally. Music is in the center of a massive revival in the place where it matters the most – with music consumers/users. At the very core of the new music economy is the ultimate battle-royale for the heart and pocket of the music consumer/user, who’s an ardent music fan and a potential consumer for the brands.

Brands are seeking to know how music works in the marketplace, and how value is added through music and entertainment affinities. Brands are aligning with music in various forms such as endorsements, artiste/brand partnerships, sponsorships and so on. It’s a smart strategic move on the part of a brand for instance, to take a fraction of their whopping advertising and marketing budget to sign-on artistes in order to access and get their brands exposed to millions of fans who are also potential consumers in a manner that’s cool to the music consumer/user.

This strategic trend explains why “non-music” companies are staffing up in the music and entertainment areas. For instance, global FMCG’s giant Procters & Gamble set up a record label with a whopping marketing budget headed by the renowned award-winning producer, Jermaine Dupri. Similarly, last year, Bacardi (drinks brand) partnered with dance music duo, Groove Armada on a mouth-watering deal; also, confectionery giant, Wrigleys signed-on R&B stars, Ne-yo and Chris Brown alongside Country singer Julianne Hough. AT&T (telecommunication giant) has a music division, so does Microsoft, Victoria Secrets, Best Buy, Apple, Nokia, Pepsi, Canon to mention a few.

Since the inception of the digital revolution and the subsequent convergence on the digital platform, music has come to stand out as the number one driver of growth in the digital commerce. In the digital commerce, quality digital content is a key driver that makes consumers embrace new services, and musical contents is in fact driving the digital revolution. Billions of dollars are invested globally in pipes and satellites by telecommunication and ISP companies but without content, they have empty pipes and boxes. Music over mobile phones is one exciting content offering with predictions that music will soon account for 50% of mobile telecoms premium revenues.

In the developed countries, digital downloads of music have already far outstripped physical CD sales. Mobile phone manufacturers now compete on the basis of the entertainment applications/functions such as MP3 players offered on their devices. In the new music economy, music is providing content widely on the internet, via mobile devices thereby creating new business models and driving the development of the whole digital economy.

Under the traditional music industry model, the traditional music market had limited and confined revenue streams controlled by accountants and lawyers. The primary focus was on the sales of CD, concert tickets and publishing etc; but in the new music economy, the new music market has multiple and dynamic revenue streams only limited by the imagination which includes brand endorsements, sponsorships, brand/artiste partnerships, digital downloads, TV/Film synchronization, commercials etc. In the new music economy, the artiste is a brand and an entrepreneur, the brands are the new label and the consumer remains the king. So, lights, camera and action! Brands are the new label; brands have hijacked the rein of control away from the traditional music industry custodian.

So, in short, we are just beginning to scratch the surface of the tip of the iceberg in Nigeria as far as the realities of the new music economy are concerned in the light of global trends. We should be poised for more tectonic shifting and mouth opening endorsement deals, artiste/brand partnerships and sponsorship deals that will look more like fairy tales in the nearest future. After all, the biggest entertainment company on the West African coast is not a record label, it is a beer manufacturing company called Nigerian Breweries! Surprised? Don’t be, because brands are the new label in the new music economy. These realities therefore call for a total paradigm shift, a fresh perspective and a proactive approach on the parts of music industry practitioners, record labels and artistes in order to exploit and maximize the opportunities presented in the new music economy. It’s highly imperative therefore for brands, labels and artistes to get it right, to truly understand the dynamics and mechanics of operating in the new music economy. Riding on the unique music marketing platform provided in the new music economy does not guarantee automatic success for all parties; however, success comes with a demand for a thorough knowledge, understanding and accurate application of the rules of engagement between music and brands. There are rules and principles guiding every successful artiste/brand alignment for instance, not every brand can match up with just any kind of artiste, the brand chemistry, bonding and eventual marriage must be delicately nurtured in a way that guarantee desired results for all.

In the sequel and the final parts of this piece, I will be focusing on the implications of the new music economy for artistes and brands. Artistes will learn how to reposition their music career in order to maximize the gains of the new music economy; and brands will gain an insight into the dynamics of effective music and brands alliance.