Reports Music

Making and Marketing an Artist Streaming Rewrites the Rules, Again

Report by Mark Mulligan
Cover image for Making and Marketing an Artist
Synopsis PDF Excel PowerPoint

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 having uniquely identifiable information (UII) from streaming services is the underlying challenge for measuring marketing ROI for streaming
  • Consumers are increasingly shunning ads: XXX skip video ads (rising to XXX of streaming music users and XXX use desktop ad blockers)
  • Some big ad agencies have overcharged advertisers for programmatic ad campaigns,  pocketing the difference via rebates from media owners
  • Labels spend around XXX of their revenue on marketing, compared to an average of XXX for blue chip companies
  • Generally, most campaigns are still album campaigns or at the very least built around a group of tracks
  • Major labels are building extensive marketing data capabilities to complement their already comprehensive streaming data resources
  • Record labels spent a total of XXX billion on marketing in 2017 with XXX of that XXX billion) being spent by XXX XXX million) was spent on traditional advertising across TV, Radio, Outdoor and Magazine
  • Labels spent XXX of digital marketing spend on YouTube in 2017, totalling XXX million 
  • In 2016, labels spent XXX on YouTube marketing for every XXX of video streams revenue 
  • In 2018 label marketing spend will tip over to XXX digital, up from XXX XXX million) in 2017
  • Warner Music Group’s 2017 artist and repertoire costs were XXX million while royalties to be recouped within one year were XXX million 
  • For an illustrative major label artist that generates XXX million in revenue, artist advance would be XXX production costs XXX and artist royalties XXX forthcoming European GDPR regulations are the storm on the horizon for marketing data for 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