Reports Music

Making and Marketing an Artist Streaming Rewrites the Rules, Again

Report by Mark Mulligan
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The 20,000 Foot View: Marketing is one of the core competencies of record labels. The rise of the internet and social media transformed label marketing strategies. Now streaming is turning everything upside down again. The new challenge this time round is that streaming is both a marketing tool and a revenue source. In the old world, there was a very clear delineation between radio and retail, streaming brings the two together, which can lead to conflicting objectives. For example, labels widely recognise that the streams that free users generate can be crucial in building momentum for a track.

Key findings

  • Labels not            uniquely identifiable information (UII) from            services is the underlying challenge            measuring marketing ROI for streaming
  • Consumers are            shunning ads:            skip video ads            to            of streaming music users                       use desktop ad blockers)
  • Some big            agencies have overcharged advertisers for            ad campaigns,  pocketing the difference            rebates from media owners
  • Labels spend                       of their revenue on marketing,            to an average of            for            chip companies
  • Generally, most            are still album campaigns or            the very least built around            group of tracks
  • Major labels            building extensive marketing data capabilities            complement their already comprehensive streaming            resources
  • Record labels            a total of            billion on            in 2017 with            of that            being spent by majors 
  •                       million) was spent on traditional advertising across TV, Radio, Outdoor and Magazine
  • Labels spent            digital marketing spend on YouTube            2017, totalling            million 
  • In 2016,            spent            on YouTube marketing for                       of video streams revenue 
  • In 2018            marketing spend will tip over                       digital, up from                       million) in           
  • Warner Music            2017 artist and repertoire costs                       million while royalties to be            within one year were            million 
  • For an            major label artist that generates            in revenue, artist advance would                       production costs            and artist royalties           
  • The forthcoming            GDPR regulations are the storm            the horizon for marketing data            any company with European customers

Companies and brands mentioned in this report: ADA, Apple Music, AppsFlyer, AWAL, BMG, Chartmetric, Facebook, Instagram, Kobalt, Pandora, Platoon, Pledge Music, Spotify, Stormzy, United Masters, Warner Music Group, YouTube