Swift vs. Spotify – An insight into the Future of the Music Industry 7th November, 2014

With Taylor Swift’s recent decision to remove all of her music from Spotify, opinions have been forming as to whether this is a taster of things to come for the music industry.

 

In line with the release of her new album, 1989, Taylor Swift decided she no longer wanted any presence on the music streaming platform – Spotify. For years, Swift has been open in her opinions about music piracy and streaming stating ‘It’s my opinion that music should not be free, and my prediction is that individual artists and their labels will someday decide what an album’s price point is.’

 

In response to Swift’s decision, Spotify released the following statement: ‘We believe that fans should be able to listen to music wherever and whenever they want and that artists have an absolute right to be paid for their work and protected from piracy. That’s why we pay nearly 70% of our revenue back to the music community.’

 

Despite Spotify’s insistence that nearly 70% of their revenue goes back to the ‘music community’ – it is estimated that artists only receive $0.006 and $0.0084 per stream in royalties.

 

Most significantly, however, Swift’s newly released album ‘1989’ debuted at No.1 in the US and claimed the largest sales week for an album since 2002.

 

Impact on the Sponsorship Industry

It is worth noting, that Swift is one of the highest earning artists globally and has the ability to sidestep platforms such as Spotify, which is not an option for many artists.

 

This case however highlights two key things:

  1. The music industry is finally seeking alternative methods to overcome the issues faced through piracy and streaming
  2. Fans are still willing to purchase music and spend money on artists they admire – indicating that with the right model, the industry can be profitable

 

The state of the current music industry poses an interesting model for the sponsorship industry. In the past ten years, the commercial departments in record labels have increased two-fold. Gone are the days where a Number 1. slot goes to the individual selling 100,000 records, now, it’s more like 10,000 (see Rhianna in 2012). Sponsorship, it seems, has become a revenue stream to fill the gaping hole that has appeared through the decline in record sales.

 

Not only do brand partnerships generate additional revenue, but they offer artists a unique way to engage with their audience. Alongside brands, opportunities arise for artists to challenge their creativity and create products, design fashion lines and direct music videos (see the video FKA Twigs recently directed for Google Glass or one of the Slingshot team’s favourites Nas, Rakim, Kanye West and KRS One’s partnership with Nike’s Air Force One).

 

As an industry, there’s a huge amount of potential for artists and brands to collaborate across a plethora of mediums. In time, this will ensure that the music industry remains profitable for all parties involved and ultimately creates something truly unique for fans to enjoy.


Connecting with the Youth- Successful Sponsorship Strategies to Young People 3rd December, 2013

Digital media proliferation has led to social media platforms becoming paramount to successful sponsorship strategies directed at the youth. Younger consumers also tend to be far more receptive to campaigns based around their passions, of which sport and music are the most universal.

Deloitte and Further Education

Sponsorship campaigns in Universities are becoming increasingly common, with the most well-known examples coming through sport. Deloitte’s collaboration with the British Universities and Colleges Sport body (BUCS) is particularly successful. The 5-year partnership deal focuses on a ‘Leadership Academy’ model which delivers events to BUCS members to experience and develop leadership and communication skills.

Through the partnership, Deloitte has first-hand access to thousands of graduates which enables them to maintain their position as one of the top graduate employers (#2 in The Times Top 100 Graduate Employers 2013). It also gives Deloitte an opportunity to build a rapport with students, making them a leading choice for career-searching graduates.

Spotify and Bacardi on Tour

Consumers tend to be more receptive to campaigns that draw upon personal interests. ‘Spotify on Tour’ tapped into this by teaming up with Bacardi to bring music based experiences to fans across America. They created intimate gigs and festivals with renowned artists such as Ed Sheeran and Kendrick Lemar with an emphasis on musical discovery for real music lovers.

The project was supported by a dedicated ‘Spotify on Tour’ which enabled sharing of tour dates, exclusive images and video content. The campaign resonated with the younger generation, which in turn helped Spotify increase its Facebook ‘likes’ to over 2.7 million.

Coca-Cola – Fusion of Music and Sport

Sporting events also represent golden opportunities to engage with young people. Coca-Cola directed its sponsorship of London 2012 towards the youth with the innovative ‘Move to the Beat’ campaign. ‘Move to the Beat’ celebrated British talent by combining the critically acclaimed architects Pernilla & Asif and award winning DJ Mark Ronson. It was based over four different platforms: the Coca-Cola song, documentary, Facebook app and the Coca-Cola Olympic Games pavilion, and had the overall objective of bringing ‘teens closer to the Olympic Games by fusing sport with their passion for music’. The campaign generated a vast amount of online activity including 245 million search impressions, an additional 1.5 million Facebook likes and 21,000 Twitter followers. In addition, Coke became the 2nd most talked about brand during the London Olympics.

Much of the success of these campaigns can be attributed to the use of highly  relevant content for young people and the right platform for the market. Given the significant changes to the way young people are now marketed to it will be fascinating to see how the sponsorship landscape continues to evolve and how brands adapt to this fertile marketing demographic.