Over 1 Million Sold

Brandweek, Nov 6, 2000 by Rickey Henderson

Talent And Profits Are At A Premium For Corporate Tie-Ins And Custom CDs

A recent trend in non-traditional music marketing has been the use of CD premiums, offered in conjunction with purchases of everything from clothing to cars. The Britney Spears and 'N Sync discs offered by McDonald's currently enjoy the highest profile of these promotional items, but the special-markets executives at record labels have been increasingly busy coordinating many such cross-promotional albums over the past few years. A survey of the executives responsible for "tie-in" CDs affords a revealing glimpse at the benefits afforded to artists and their labels by such campaigns, as well the logistical and political pitfalls to be avoided when creating CD premiums.

"It's different from the record business; these are all one-way sales," observes Gary Newman, executive VP of BMG Special Products. "We make X millions, we ship them, and we're done. Activity in this area comes in spurts. We just did a CD premium for Clairol hair products, and we did one for Members Only, the clothing manufacturer. We've got a staff of a half-dozen people who go out and pitch to corporate America. We attend trade shows; we deal with advertising agencies. We also do a number of Christmas promotions; we just did one with True Value Hardware, a CD of seasonal standards aimed more toward older consumers."

A Christmas promotion with Wrangler Jeans, "Country Christmas," was recently assembled by Kathy Hale, senior VP, special markets, Universal Music Enterprises. She also recently worked on a national promotion with Get Music and General Mills. According to Hale, "These promotions can require anywhere from 10,000 units manufactured up to a million or more." Hale is especially proud of the tie-in between Universal and NutraSoy, a custom CD to he distributed at the American Heart Association's "Heart Walk" being staged in 14 cities; the disc features a suitable soundtrack for walking, with tunes by James Brown, John Hiatt, Steppenwolf and others.

During her nine years at EMI-Capitol Special Markets, Shelli Hill, director of sales, has been involved with several premium deals. One of her latest projects, a CD produced in conjunction with NBC and available exclusively at Wal-Mart, compiles 12 new Christmas songs with NBC celebrities. The performances include duets by John Lithgow and Bebe Neuwirth, as well as Sean Hayes and Megan Mullally from "Will & Grace."

"You set your sights high for repertoire," Hill observes. "Artists might not want to participate; you have to be able to roll with those punches. It's not always a money issue; artists may not feel that it's right for them or that the project is too commercial for them. Unfortunately, your client might not have the same flexibility. We do what we can to acquire the best material possible, but stay within thematic and budgetary guidelines."

Dan Nathanson, VP of strategic marketing at Warner Bros. Records, describes his agenda in the realm of CD premiums: "A lot of things that I do are geared toward breaking new artists who might have trouble garnering radio or TV exposure on their own. I'll work with Levi's or Volkswagen or Doc Marten's. Last year, we did several million CDs where we'd tie in a media partner like Spin magazine, as well as an advertiser like American Eagle outfitters; we'd then create, in effect, soundtracks for the lifestyles of people who would buy those clothes and read that magazine. It's a win for us, in the case of American Eagle, as they have 700 stores across the country aimed at the shopping demographic of ages 15 through 25; that's the demographic for a lot of our breaking artists. We do these consistently, and they, in turn, lead into extensions such as sponsored tours.

"Most of the projects that I've been doing in the last few years have all cost a million-plus dollars to mount," Nathanson continues. "The 'plus' generally comes in the form of advertising buys or radio extensions or print ads or a Webcast. We start with a basic premise that (a) they want to tie the music to their product, (b) there's a specific demographic and a lifestyle that they want to reflect, and then (c) we find out what their budget is. We do a lot of listening; if they want country, then maybe we can do a Faith Hill promotion. If they want hardcore street, like this premium I'm developing for Slim Jim who wants that kind of image, then I can link them with one of our labels like Ruff Nation."

Universal's Hale points out that, in the course of assembling such custom discs, "We have to be very sensitive to our artists and their management and make sure that they approve of the project. The company with the promotion may be a competitor of a company promoting an artist's tour. You have to be careful about the potential issues that an artist might have with a product being promoted, like alcohol or tobacco.

"Some artists just don't like their music being connected to the sale of a non-music product," notes Mark Leviton, senior VP A&R, Warner Special Products, citing "This Note's For You," Neil Young's critique of artists who allow their music to be used as a promotional tool.