“The shadow of crisis has passed, and the State of the Union is strong,” declared the President during his State of the Union address.
The following night, I found myself hoping for a similar promise from Next Big Sound, an online music analytics platform that tracks artists’ popularity, in its annual “State of the Industry” report for 2014.
“Brands. No longer a dirty word in the music industry,” the report begins, echoing the principles that Music Dealers has touted since its founding. Artists are leveraging brands as partners to access their resources for widespread marketing, and to earn extra revenue to finance their craft.
And the feeling is mutual. Last year, brands took to working with artists more frequently in order to build long-lasting and meaningful relationships with their consumers.
According to a March 3 report by IEG Sponsorship, brands spent around $1.3 billion on music partnerships in 2014. More interestingly, according to Next Big Sound, brands are looking to work more with up-and-coming artists and not just “the Beyoncés and Lady Gagas of the world.” “Informed by data and with the right campaign,” the report continues, “brands can provide additional leverage to spread the word, entice new fans that are otherwise out of reach, and actually help break an artist. In return, the kids think they’re cool. Win; win.”
People want to know what’s hot before it’s already popular. They want to be the trendsetters, the kick-starters, the go-to authority on what’s-what.
As proof, monthly users of mobile music discovery app Shazam rose to 100 million in 2014 from 70 million in 2013, according to Shazam. Furthermore, the company recently announced that, after receiving $30 million in new investments, Shazam is now valued at roughly $1 billion.
So, yes – brands are smart for opting to collaborate more with emerging artists than big label stars, a trend that is rewarding those brands with greater consumer engagement and higher customer conversion.
“Interestingly enough, it is some of the lesser known, break-out artists that have led to the highest earned media value for [Target],” said Next Big Sound’s report. “For instance, while Taylor Swift has 25x the number of followers on Facebook as Sam Smith, and 15x the audience overlap with Target, the brand saw $1.8 million in earned media value in the month following the Sam Smith release, compared to only $663,000 for the Swift release.”
Target is well known for its exclusive music partnerships, in which the brand collaborates with artists to release albums or singles that are only available to Target customers. In 2013, the brand worked with 98 artists in exclusive partnerships and released over 200 bonus tracks, according to Target. Next Big Sound listed the brand’s seven most profitable partnerships in 2014 and tracked the value generated in each campaign’s first month. When totaled, those numbers totaled $6,885,000 in earned media value (EMV) for Target – and that’s just from each campaign’s first month!
Next Big Sound notes on several rising trends, including the continued digitization of the music industry, as demonstrated in the report’s analysis of online music discovery:
TOTAL PLAYS: 434,695,663,626
+363% from 2012
+95% from 2013
Sources: Spotify, YouTube, Vevo, Soundcloud, Vimeo, Rdio
TOTAL FANS: 17,335,824,480
+202% from 2012
+186% from 2013
Sources: Facebook, Twitter, Instagram, SoundCloud, YouTube, Vine
Social Network Stats:
1.) Fewer Soundcloud followers, but greater Soundcloud plays
2.) Instagram is growing faster than Twitter as a platform for artists
3.) About a quarter of all music-related follows on Twitter last year were for indie rockers.
The report’s stats paint an interesting picture: people may be buying fewer albums, but they’re certainly listening to more music than ever before. Additionally, 15% of artist-to-brand partnerships are with independent artists / independent labels. Though 85% are still working with major labels, brands are quickly noticing consumers’ love of indie music, and will likely partner with independent artists even more in 2015.
The relationship is clear: consumers want music, but aren’t paying as much for it anymore; brands want more consumers, but can’t build an audience on their own; and artists want to make music, but need a meaningful revenue stream to do so.
But the state of the industry is not yet as strong as we all would like. Though music streaming is rising, revenue is dropping. Artists are losing their ability to grow in their craft, and the industry is accordingly suffering.
But we’re fighting to fix that. As this report clearly shows, artist-to-brand partnerships can be the solution to these problems: for brands, consumers and artists alike. As long as the interests of each party are upheld, these partnerships can provide consumers with meaningful content, brands with stronger engagement, and artists with significant revenue streams.
The light of a strong industry is near, but it’ll take some hustle to clear us of this shadow of crisis.
Thank you to the team at Next Big Sound for putting together a phenomenal and informative piece of content.
By: Zach Miller, Music Dealers
All images sourced from Next Big Sound’s State Of The Industry Report.