American Brandstand: Marketers Underwrite Performers
New York Times
July 7, 2008
The hip-hop and R&B
producer Jermaine Dupri has discovered best-selling acts
like Kris Kross and Da Brat, has produced hits for
Mariah Carey and Jay-Z, and now runs the urban music
division of the Island Def Jam Music Group. He’s also
looking for fresh talent for a new label financed by a
company new to the music industry.
The new player? Procter & Gamble.
The consumer goods giant is part of a wave of companies
getting into the music business to promote their own
products, essentially becoming record labels themselves.
Procter & Gamble, for example, is joining Island Def Jam
in a joint venture called Tag Records, a label that will
sign and release albums by new hip-hop acts. It is named
after a brand of body spray that P.& G. acquired when it
And Mr. Dupri, a music-industry veteran and the longtime
partner of the singer Janet Jackson, sounds quite
pleased with his new gig.
“I’ve never seen someone wanting to devote this much
money to breaking new artists,” said Mr. Dupri, who will
serve as president of Tag Records while keeping his
position at Island Def Jam. “Nobody in the music
business has the marketing budget that I have.”
At a time when online file-sharing is rampant, record
stores are closing and consumers are buying singles
instead of albums, getting into the music business might
seem like running into a burning building. But as record
labels struggle to adjust to a harsh new digital
reality, other companies are stepping up their
involvement in music, going far beyond standard
endorsement contracts and the use of songs in
These companies — like Procter & Gamble, Red Bull and
Nike — are stepping outside of their core businesses to
promote, finance and even distribute music themselves.
A few months ago, Bacardi announced that it would help
the English electronic music duo Groove Armada pay for
and promote its next release. Caress, the body-care line
owned by Unilever, commissioned the Pussycat Dolls
singer Nicole Scherzinger to record a version of Duran
Duran’s “Rio” that it gave away on its Web site to
promote its “Brazilian body wash” product. The energy
drink company Red Bull is starting a label that is
expected to release music before the end of the year.
And at least some of this music is credible: a hip-hop
song that Nike released by Kanye West, Nas, Rakim and
KRS-One was nominated for a Grammy Award for best rap
performance by a duo or group.
Unlike Starbucks, which got into the music business to
sell CDs at its stores, these companies want to use
music to promote products they already sell.
“It’s not about money,” said Sarah Tinsley, a global
marketing manager at Bacardi. “It’s a branding
Unlike the exclusive album deals that Wal-Mart is
striking with groups like the Eagles, these companies
are attracting artists at the height of their relevance.
Two weeks ago, Converse released a single by a
combination of artists that The Times of London called
“a three-headed Frankenstein’s monster of coolness”: the
Strokes singer Julian Casablancas, the producer Pharrell
Williams and the R&B performer Santogold. Offered as a
free download on Converse’s Web site, the song received
mostly favorable reviews from both blogs and newspapers.
“Our instructions to them were to have fun, as though
they were doing any song,” said Jon Cohen, co-founder of
Cornerstone, a music marketing company that has set up
music deals for Converse, Nike, Caress and Smirnoff. “It
doesn’t matter where the music comes from as long as
A decade ago, signing a record contract with a body
spray company would have been unthinkable for most
artists. But at a time when labels’ promotion budgets
are declining, consumer brands can offer valuable
exposure in print and television ads. Jeff Straughn,
Island Def Jam’s vice president for strategic marketing,
said that Tag might spend seven times as much promoting
a release as a traditional label.
“When I started in this business 10 years ago, it was
hard to get an artist to stand in front of a sign with a
logo on it,” said David Caruso, the co-founder of Acme,
the agency that negotiated the deal between Island Def
Jam and Tag. “Now brands are engaging their audiences
But the brands walk a fine line by making sure that
consumers are aware that they financed a song without
having it simply seem like a commercial.
“We wanted it to be like they were making their own
record,” said Rob Stone, a Cornerstone co-founder,
referring to the song that Kanye West, Nas and KRS-One
made for Nike with a celebrated producer, Rick Rubin.
“None of them had to mention the Air Force 1,” a Nike
Instead, Cornerstone asked the artists to write a track
about the theme of timelessness and promoted it like any
other song, making a video, promoting it to radio and
selling it on iTunes. (Nike’s profits went to the
Force4Change Fund, a charity for youth leadership
programs.) As it turned out, the song, “Better Than I’ve
Ever Been,” does mention the sneakers as well as “Nike’s
For artists, deals with brands can be more lucrative
than traditional record contracts. Performers usually
get an advance or fee in addition to a royalty rate
higher than that given by record labels, which is
usually $1 to $2 per sale. If the artist is signed to a
label, he usually has to share the money he makes. In
most cases, control of the recording copyright reverts
to the artist or label after a set period of time.
In another deal Cornerstone negotiated, the electronic
music duo Crystal Method remixed some of its songs to
create a workout soundtrack that Nike could sell on its
page in Apple’s iTunes store. The sneaker company gave
Crystal Method a small advance but a generous royalty,
according to Richard Bishop, the duo’s manager.
The mix sold nearly 40,000 copies online, according to
Nielsen SoundScan, and more than 15,000 copies in
traditional stores once Nike’s period of exclusivity
ended. Crystal Method’s last traditional album sold
184,000 copies, but Mr. Bishop said the duo made more
money on the Nike project because the royalty rate was
so much better.
“I think in the world today, it doesn’t make a
difference to the consumer if a record comes out on
Warner Music, EMI, Red Bull or Diesel Jeans,” Mr. Bishop
said. “Artists may be better advised to put their music
out with a brand to get better reach and bigger
Groove Armada should also do well in its deal with
Bacardi, according to the band’s manager, Dan O’Neill.
The yearlong contract calls for the duo to play 25
Bacardi events and give the liquor company online
distribution rights to its new E.P. — a release with
less music than a CD — which is due in October.
In exchange, Groove Armada receives a monthly fee, money
for recording costs and a generous royalty on music
Bacardi sells or gives away. It retains the copyright to
its recording, as well as the right to sell its E.P. in
traditional outlets, where it will presumably benefit
from the money Bacardi spends on marketing.
Music executives say many of the acts now striking deals
with brands are popular enough to do so because they
have already benefited from major-label marketing
campaigns: Crystal Method was signed to Interscope,
Groove Armada to Sony.
Although consumer brands are taking on roles once
reserved for labels, they are investing so much money in
music because the same digital technology that whipsawed
the music business is also making it harder to reach
“We don’t just want to talk to people,” said Anne
Jensen, a brand-building director at Unilever who works
with Caress. “We want to give them something that adds
value to their lives.” She said that Ms. Scherzinger of
the Pussycat Dolls was perfect for the campaign because
she embodied the spirit of Brazil. (Though, truth be
told, she is Hawaiian, Russian and Filipino.)
Ms. Scherzinger will get money from her deal with Caress
as well as exposure in the brand’s television campaign —
the kind of advertising that a major label would not
buy, even for a star.
“If you’re only looking at these deals in terms of
money, you’re going to miss what they do for each
party,” said Jeff Haddad, who manages Ms. Scherzinger
and the Pussycat Dolls.
Danny Goldberg, founder of the management company Gold
Village Entertainment and former chairman and chief
executive of Mercury Records, said that deals with
brands would turn off fans of some bands but could be
effective in promoting other performers.
“In another era, there was a stigma attached to this,”
he said. “Now it’s just another way to expose your