Warc Blog

Musicians turn to brand tie-ups

29 July 2013
LONDON: Musicians are increasingly striking lucrative endorsement deals with brands as they aim to protect their incomes against a long-term decline in revenues from music sales.

New figures show that musicians, as a group, earned £100m from brand tie-ins in 2012, reports the Financial Times. This represents a major boost for a music industry that has seen a long-term decline in sales.

Last year, global music revenues rose for the first time since 1999, with a gain in digital revenues offsetting declines in CD sales.

Artist endorsements, including the American pop singer Madonna's backing of a Smirnoff vodka brand and a deal by One Direction, the British boy band, with Pepsi, rose by a third year on year to become among the largest sources of performers' incomes.

“There has been an increasing recognition recently of the power of music to add value for brands,” said Robert Ashcroft, chief executive of PRS for Music.

While Howard Davies, a partner at Deloitte, the UK accountancy firm, told the newspaper: “Artists, agents and labels are looking for incremental ways in which they can develop revenues.”

He added that the move was jointly driven by the music industry and brands, in a symbiotic manner, which he nevertheless described as “hard work.”

In all, music industry commercial tie-ups overall generated £104.8m in 2012, a rise of 6%, despite a fall in the sponsorship of live events that was partly due to the summer Olympic Games.

Artists tend to receive upfront payments from such tie-ups, rather than the successive royalty payments generated by streaming services. But the partnerships can cause problems, such as Smirnoff being reported to the Advertising Standards Authority accused of encouraging under-aged drinking.

The drinks brand was subsequently cleared by the regulator on the grounds that Madonna's seniority meant that she was unlikely to influence strongly the under-18 age group.


Data sourced from Financial Times; additional content by Warc staff

 
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