Record Labels and Major Brands Unite

by erica ~ July 8, 2008

There’s nothing new about musicians placing products in their songs. Dating back to 2005, some of the most popular items mentioned were Mercedes, Nike, Cadillac, Bentley, Rolls-Royce, Hennessy, Chevrolet, Louis Vuitton, and Cristal. According to the Billboard Top 20 for 2005, of the 106 songs in the top 20, 36% had brands in the lyrics.

Now, we are now entering a new era where major companies are getting into the music business to promote their own products, essentially becoming record labels themselves. For example, Proctor & Gamble is teaming up with Jermaine Dupri, who runs the urban music division of the Island Def Jam Music Group, in a joint venture called Tag Records. This label will sign and release albums by new hip-hop acts, which will of course incorporate their products into their songs.

According to the New York Times, “The brands walk a fine line by making sure that consumers are aware that they financed a song without having it simply seem like a commercial.” P&G are not the only ones getting into the music business. Companies like Red Bull, Nike, Caress, Bacardi, and Smirnoff already have something cooking with a number of record labels.

I can see why such ventures are currently taking place. With iTunes and other technologically advanced programs that offer music downloads, record labels are having a tough time staying alive.

The New York Times article goes on to say, “At a time when labels’ promotion budgets are declining, consumer brands can offer valuable exposure in print and television ads. Jeff Straughn, Island Def Jam’s vice president for strategic marketing, said that Tag might spend seven times as much promoting a release as a traditional label.”

These joint ventures will benefit both the record labels and the musicians in the long run. We are already bombarded with ads at concerts, music videos, and on the artists themselves, so what’s the big deal if these two worlds join forces? Combining these large companies will improve marketing, advertising, and all kinds of publicity for everyone that is involved.

For example, “In dealing with Bacardi, Groove Armada receives a monthly fee, money for recording costs and a generous royalty on music Bacardi sells or gives away. It retains the copyright to its recording, as well as the right to sell its E.P. in traditional outlets, where it will presumably benefit from the money Bacardi spends on marketing.”

All in all it looks like this junction will work out for everyone.

Erica Berkovich is an Associate Account Executive at Mediashop PR. She is currently pursuing a Masters degree in Corporate Communications at Baruch.