Close-Up: How adland is handing music industry a lifeline

Music companies are turning to advertising agencies to help them make money in the digital age, Caroline Lovell writes.

It is estimated that 90 per cent of digital music downloads are illegal. This figure illustrates the battle the record industry has faced since the digital revolution changed the dynamics of how consumers connect to music.

Last week, EMI Music appointed an advertising agency, Adam & Eve, to help it promote its artists, increase revenue streams through non-traditional channels and help it fight this battle.

In 2008, the band Radiohead left the label because it said its relationship was a "decaying business model". EMI appears to have taken this snub seriously and now wants the ad agency to create "innovative communications, positionings and media solutions" to help the company connect its artists with consumers. Fresh content ideas and creative ways of delivering this content are top of the brief.

Part of this will involve Adam & Eve looking at EMI's business and investigating new channels and new ways to appeal to new audiences. It would seem "new" is EMI's focus here.

The music industry's downfall began with the birth of the internet, which opened the doors for consumers to illegally download and share music.

Crucially, the downloading trend brought the single back, causing the death of the album: the one thing music companies' revenue models are built on.

Matt Jagger, the head of Naked Ventures (and a former director and vice-president of Universal Music), says it is simple economics.

"The relationships (in the music industry) are built on albums being the end product, not singles. In the good old physical days, an album retailed for £14.99 and a single for £1.99. In the download world, albums cost £6.99 and singles are 79p, so you can see the problem."

The sheer weight of new music out there, coupled with the media's obsession with finding the next "new" sound, has meant that audiences are now extremely fickle, looking to move on to the next big artist, rather than buying the second or third album.

As a result, record labels now have to spend a lot of cash to develop an artist, which they are often loath to do.

Giulio Brunini, the chief executive of Brandamp, a joint venture between Group M and Universal Music Group to develop brand/music partnerships, says: "Once it was as easy as putting CDs on the shelf and waiting for someone to buy them; now it is much more complicated because music is consumed in a different way and listeners expect more for less."

James Murphy, one of the founding partners of Adam & Eve, believes the answer is to identify and isolate audiences, and create different ways to connect with them.

These connections could involve media subscription services, marketing exclusive content, as well as managing and driving fame and coverage for artists.

Alternatively, agencies can profile audiences, compare them with an artist's target audience and target them specifically.

"It's harder than ever to connect the content with the right audience. There is a proliferation of choices and channels; agencies are astute at dealing with that," Murphy says. Ad and media agencies can also help record companies understand how to treat artists like brands - and define the DNA of a band - to engage better with consumers.

But, equally, linking brands with bands also has its risks.

As Richard Skinner, a creative associate at Fallon, who has a long history of working at record labels, says: "What if there's a big bump in the road that agencies are not expecting? A car, after ten months of putting together a media plan, doesn't go out and get arrested for crack. A band member can, and your campaign is on its arse."

This isn't to say that record labels' marketing departments do an inefficient job of talking to their audiences. But the problem is that their target audience is quite specific, often young and actively listening to music. Where agencies will be able to help is by talking to a far broader audience.

"Record labels don't have planners; they have intuition, heart, soul and a record," Skinner says. "They hedge a bet that it will appeal to a number of people. But planners can get under the skin of that. I think it's a nice join-up."

Stopping people illegally downloading is something the ad world can't change. But the record industry has helped itself by opening up to the ad world, where in the past there has been a "mutual slight distrust on both sides", according to Shabs Jobanputra, a co-founder of Relentless Records UK.

It is a point that Jagger reiterates: "The industry is certainly much more open to being involved with brands and agencies. The arrogance of 'we're the music business, go away!' is definitely ending. Though the belief that brands will be the white knight that saves the business is misguided. Brands want to sell their product, not music. The business has to ultimately clean its own house in terms of costs and business models."

The challenges faced by the music industry are not that different to the ones faced by large media brands; it often comes down to the issue of how do you get people to pay for content online that they now expect for free.

Jobanputra says: "We've got something people want but we've failed to monetise it in a way that provides value for our artists."

EMI will be hoping that Adam & Eve can help push its business in that direction while putting it back in touch with consumers.

NEW MUSICAL EVENTS

Bartle Bogle Hegarty NY and Oasis

To launch Oasis' latest album Dig Out Your Soul last year, Bartle Bogle Hegarty New York created a reverse album launch and produced a documentary on the event.

The 18-minute documentary, Dig Out Your Soul In The Streets, which premiered on MySpace Music this month, follows members of Oasis teaching buskers in New York City tracks from their new album.

The documentary, directed by The Malloys, follows the buskers as they perform the songs around NYC at Times Square, Penn Station and Astor Place. The buskers turned the album launch on its head by performing the songs on the streets first.

Radiohead's In Rainbows

When Radiohead's contract came to an end with EMI last year, they decided to split from the record label (after failed deal negotiations with the new owner, Terra Firma), calling their relationship a "decaying business model".

The band went on to embrace online marketing techniques and exploit the digital medium to build a closer relationship with fans, positioning Radiohead as a band interested in music, not money. Their first high-profile stunt was the release of In Rainbows, where they got people to put a value to music by asking them to "pay what you want" to download the album. The band then launched a series of user-generated content initiatives.

Mother, Crisis, Universal Music, Covent Garden, JCPR - Superbusking

Last Christmas, Mother launched a new music event at Covent Garden, called Superbusking, with the homeless charity Crisis, Universal Music, Covent Garden and JCPR.

The event transformed Covent Garden into a performance venue, where Universal Music-signed artists busked and raised money for Crisis.

All of the artists - including Keane, The Feeling, Guillemots, The Saturdays, King Blues, VV Brown, Victoria Hart, Imelda May, Bryn Christopher and Jonathan Ansell - performed for free in the impromptu gigs. The event, which raised more than £12,000 for Crisis, was such a success that Covent Garden has decided to make Superbusking an annual affair.