Special-Products Wings Move Their Tails For Agencies

Brandweek, Oct 18, 1999 by Don Waller

"Ten years ago, the special-products business was about answering the phone and servicing song requests," says Universal Music president of special markets Bruce Resnikoff. "Nowadays, it has become a marketing business. We're not only marketing our own product--music--but also how it can be used to help market other businesses."

While licensing original recordings of vintage and current music for film and TV soundtracks has proven to be a major revenue stream, and the usage of catalog in TV spots is greater than ever, more and more special-products divisions are reaping additional benefits by creating custom CDs as promotional tools for various consumer brands and putting together direct-TV packages.

Seattle-based coffee retail chain Starbucks kickstarted the former concept with its 1994 "Blue Note Blend" sampler. Licensed from EMI-Capitol Music, the promotional CD featured selections from the vaults of the legendary jazz label Blue Note. Available only at Starbucks outlets, it sold 75,000 units.

Not surprisingly, Starbucks has continued to commission similar packages ever since, licensing music from each of the five major record labels' special-markets divisions, including blues from Sony, piano jazz from Universal and Cuban music, as well as a special Valentine's Day-themed compilation, from Warners. Bearing in mind that the ability to offer repeat customers different titles at different times is paramount, several other chain retailers--such as Eddie Bauer--have commissioned multiple titles from multiple sources, as well.

Clothing retailers, in particular, have been quick to take advantage of this promotional opportunity. While such familiar clothiers as Abercrombie & Fitch, Banana Republic, Old Navy, Express and Lane Bryant have all gotten into the act, companies specializing in everything from home furnishings (Pottery Barn, Pier 1, Origins) to cookware (Williams-Sonoma) to hardware (True-Value) have followed suit.

Two of the most imaginative applications of these promotional musical creations can be found on the collection of children's marching songs that Sony did for Gymboree and a compilation of songs about telephone calls (Glenn Miller's "Pennsylvania 65000," for example) that Warner did for GTE.

Aside from these discs' near-100% sell-though rate and their obvious branding value, their real use is as an in-store tool. Many retailers play these CDs in their stores, contributing to the shopping-as-entertainment environment that makes consumers linger longer--and want to come back.

BRANDY IN COSMETICS

Of course, today's special-markets divisions are doing more than filling more sophisticated orders. Warner Special Products senior VP/A&R Mark Leviton cites a recent Cover Girl cosmetics promotion that involved a six-song CD given free with product purchase. It featured Atlantic recording artist Brandy (a Cover Girl model) and five of the label's up-and-coming acts.

BMG Special Products executive VP Gary Newman has seen similar success with sampler premiums for Clairol and Kelloggs that spotlighted contributions from teen sensations 'N Sync. "We've also done very well with incentive programs where repeat customers can create their own customized CDs," says Newman. "We also do a lot of mail-order catalog business with companies such as Avon, Publisher's Clearinghouse, Reader's Digest and Rivertown Trading."

CIRCUSES AND CALCULATORS

"We've done a lot of sweepstakes-type promotions with beverage companies," says Sony Music Special Products executive VP/GM Harold Fein. "But we've also become more involved in creating enhanced CDs for Ringling Brothers and the NBA. The Ringling Brothers disc has circus music, screen savers, circus videos and information, all packaged in the souvenir book.

"The NBA enhanced CD features recent stadium-rock hits, a screen saver, every team's schedule via a hot link to the team's Web site, a video of Commissioner David Stern on "David Letterman" and a spot for the NBA. It was distributed at every home team's opening game as a welcome-back promotion. We did about 700,000 of those."

For EMI-capital Music VP/sales & marketing Roy Gattinella the recent emphasis has been on "using our music and client base to help develop new acts," explaining that the company is currently doing a national back-to-school promotion in which a Hewlitt-Packard calculator comes in a blister-pack with a front offer for a free CD by the Moffatts, a young family group. The product is available through major consumer-electronics chains. Additional advertising tie-ins include a back-to-school promotion with Belk department stores involving an enhanced CD of four Moffatts songs and a video, a NASA video, an interactive game and fashion show, and a contest-entry form. Aside from a chance at $200,000 in prizes, including a VIP tour of the Space Center, purchasers get a $2-off coupon redeemable at Wherehouse and Blockbuster music stores.

KEEPING THE TV AT HOME

Along with the proliferation of promotional CDs, special-products divisions continue to experience rapid growth in direct-TV packages. While all of the major record labels cut third-party deals with such packaging companies as Time-Life, Cornerstone Promotions, Razor & Tie and Heartland Music, Sony and Universal maintain in-house direct-TV operations (Sony Music Direct Response and UTV Records, respectively), as well.