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.


App-led Sponsorship 23rd June, 2014

On Wednesday, Facebook embarked upon its latest attempt to corner the social media market with the launch of the aptly named Slingshot app.  To many, the launch was a response to Facebook’s failed bid for rival and burgeoning app Snapchat – an instant messaging app for sharing photos and videos with friends.

As of May of this year, users were sending up to 700 million photos and videos per day, while Snapchat Stories content was being viewed 50 million times per day.  The recent surge in apps such as these has engendered new opportunities for sponsors to develop more creative and diverse social media strategies. Yet despite the overwhelming usage of apps such as Snapchat, the platform is still relatively untouched by brands – as such, here is an overview of recent campaigns using these platforms.

Diet Coke & Taylor Swift

Last year, Diet Coke used the app as part of its sponsorship of Taylor Swift’s Red Tour. People who subscribed to Diet Coke’s virtual scavenger hunt received one picture a day for five days. Each picture revealed clues regarding location of that day’s item and those who collected all five items won a free concert ticket. Due to the success of this campaign, Swift was able to directly engage with Swift’s audience on a global scale.

Heineken & Coachella

More recently Heineken, through their sponsorship of the Coachella Valley Music and Arts Festival, created a Snapchat account called HeinekenSnapWho. Users received clues throughout the weekend about who would be performing and those who responded with the correct answer would get an early confirmation from Heineken.

Both of these activations demonstrate the extensive opportunity available for brands to generate their own content through these apps.  Furthermore, over two thirds of Snapchat’s 60 million users are mostly under the age of 25 meaning that Snapchat offers access to a very young demographic. This explains why Audi, through their sponsorship of Pretty Little Liars, have been Snapchatting exclusive content to users as it allows them to integrate their brand with their target demographic.

Vine

Of course, Snapchat isn’t the only app out there offering a platform for brands to get creative. Twitter’s video sharing service, Vine, has also attracted a number of sponsors due to the fact that the prerequisite of any viral video on Vine is creativity. In an article on digitaltrends.com, Meagan Cignoli, a Vine creator with over 300,000 followers, says that she is regularly courted by sponsors. Previous sponsorship deals having been agreed with Nike, Lowes and Rite Aid, allowing both the sponsors more social media coverage whilst she’s been able to extend the reach and authority of her own name by attaching herself to these brands. Therefore a ‘symbiotic relationship was created between a viral-hungry sponsor and Vine content creator’.

Vine has approximately 40 million users, 20 million less than Snapchat, however what they both share is a requirement for sponsors to be creative with their strategies. It is through apps such as these that sponsorship becomes so much more than just about the logo with more emphasis placed on integration, user generation and brand led content.