The Hottest Sector Of The Promotional-Music Market: Publishing And Goods-Pushing

Brandweek, May 22, 2000 by Davin Seay

At a time when uncertainty about the future of the music business makes any long-range prognostication a risky business at best, one prediction can be made with confidence: Copyrights, licenses and sync rights will continue to be the Industry's bread and butter.

Regardless of the ultimate configuration of major entertainment conglomerates, notwithstanding the technological challenges that confront traditional sales and distribution streams, and in spite of the rampant problems of piracy and widespread downloading of proprietory material, publishing is not only surviving but thriving. The fact remains that artists are as dependent on the publishers as are those for whom music is a necessary ingredient in the merchandising and marketing of every conceivable product and service. From cars to carpets, blockbuster films to Internet portals, political campaigns to professional wrestling, music has become the essential creative element in any equation for commercial success.

"We are celebrating our 10th anniversary this year," says Richard Rowe, president of Sony ATV and the man charged with overseeing one of the industry's most extensive and diverse catalogs. "In that time, we have witnessed an almost total transformation of the music-publishing business. The traditional way of doing our job was to sign a songwriter, wait for him to write a song and try to find an artist to record it. Today, of course, that concept is totally outdated, Most recording artists are their own songwriters, and, for that simple reason, we have been compelled to seek out other sources of revenue. Thankfully, we are in a market where those sources are becoming increasingly plentiful. We are, as much as anything, in the film, television and advertising business these days."

PASS-ALONG BENEFITS

"When the economy is this strong, there's a lot of dollars in the pipeline," observes John Melillo, VP of music resources at EMI. "Ad agencies and their clients have adopted a forward lean on realizing the potential of this red hot market. That, in turn, makes our bottom line very healthy, and it's a benefit we can pass along to the artists and songwriters we represent. Let me put it this way: It's a great time to be in the music business."

David Renzer, president of Universal Music Publishing, couldn't agree more. "In the area of global synchronization, we have seen a growth of over 20% in the last year alone," Renzer enthuses. 'Most of that, it goes with saying, is a direct result of the huge increase in film, television and advertising licenses. Of course, having a significantly enhanced catalog hasn't hurt, either."

Renzer is, of course, referring to the recent consolidation of the MCA and PolyGram publishing operations, which has been closely watched by the industry as a whole in anticipation of other such mergers, both planned and in place. "It took a while for things to shake out," Renzer allows, "but I'd say that, within this past year, we've really began to hit our stride. Just getting a handle on a combined catalog as big and diverse as ours was a daunting task. But the primary result of all our hard work has been in the ability to bring our songs and artists to a truly global marketplace."

OLD MODELS UNFASHIONABLE

While unwilling to project how the upcoming Warner/EMI merger may change its business model, EMI's Melillo doesn't seem especially concerned. "It's just too early to tell," he avers, "but I don't think there's any question that we're bringing tremendous resources to the table. We've been very conscientious in establishing our place in the new publishing environment, and that entails keeping your ear to the ground. You can't depend on old models any more. Music has become essential, not just in broadcasting, but in point-of-purchase, e-commerce, branded premiums-throughout the whole spectrum of modern life."

It's that lifestyle-enhancing aspect of music that, according to Rowe, encourages artists and songwriters to participate and cooperate in placing their material in the diverse venues now being made available. "The time when writers and recording artists were concerned about 'selling out' are over," says the executive. "Of course, they are very aware of what their music is being associated with, but the general attitude seems to be that there is no longer a stigma attached to having their song used to sell a product. It's just another avenue of exposure.

AD-SHOP SPECIALIZATION

Melillo sees a fundamental change in attitude occurring at the opposite end of the spectrum, as well. "Advertising agencies are becoming more and more specialized," he explains. "Shops that used to have a broad range of clients are focusing on particular market niches," he comments. "This diversification of the agency model gives us a great opportunity to meet their needs in very specific ways. We can match music to a campaign in ways that were impossible when the approach was more general and broad-based. In this cluttered communication space, it's imperative to tailor your message to the eyes and ears that are going to respond. We've got to be able to aid that process in very sophisticated ways."