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It may be a digital age, but live is still the big cash driver for the top 40 earners on our annual list

The U.S. music business offers a matrix of trends to satisfy chart watchers and number crunchers. New CD sales continue to fall. Digital music sales are rising nearly 10 years after the launch of the iTunes Music Store. Streaming and subscription revenue are growing as music lovers choose easy access over-and, sometimes, in addition to-physical ownership.

Concerts make up 68.9% of revenue for the 40 artists on Billboard’s Moneymakers list, which tallies artists’ annual earnings. Remove Adele and Taylor Swift, both of whom didn’t earn any U.S. touring income in 2012, and the average increases to 72.5%-a figure on par with the 72.6% in 2010 and the 68.3% that touring represented in 2011.

Madonna tops the 2012 list, in part because 93.5% of her total revenue came from concerts. Bruce Springsteen, a close second, earned 92% of his revenue from live shows. Roger Waters, a distant third, had the highest concert share on the list with 93.6%. The entire top 10 averaged 84.2% of their income from concerts, and the number would have been higher, if not for Justin Bieber‘s mere 60.1% share at No. 10 dragging down the average.

Billboard estimates the 2012 Moneymakers artists pocketed $373 million from concerts after paying agents, managers and expenses. That was up from $329 million in 2011 but down from $383 million in 2010. For all Moneymakers artists, touring income accounted for 72.8% of revenue in 2011 and 75.1% of revenue in 2012. Artists at the top of the list got an even greater share of revenue from touring. A top 10 artist made 84.2% of income from concerts in 2012 compared with 75.8% in 2011 and 81.7% in 2010.

Touring wasn’t vital for every act on the Moneymakers list. Two major artists, Swift — who topped last year’s rankings — and Adele, made the list without any concert earnings for the year. Meanwhile, two others-Mumford & Sons and Maroon 5-pocketed less than $1 million in concert earnings for 2012. In percentage terms, touring accounted for just 12.6% of Mumford & Sons’ total revenue and only about 2.6% of Maroon 5’s total.

Artists who made less than $1 million on the road tended to make more from recorded music — just as the negative correlation between concert revenue and music sales suggests should happen. Adele and Swift averaged $7.2 million in recorded-music sales while Mumford & Sons and Maroon 5 averaged about $3.2 million. The other 36 acts on the Moneymakers list, who each earned more than $1 million from touring in 2012, averaged just $2.3 million in recorded-music sales.

Read more details here:  http://bit.ly/15HmGru

Streaming revenue wasn’t terribly important to any artist’s overall income as measured by Billboard-not even those artists with little to no touring income. This isn’t to say streaming didn’t have an indirect impact on these artists’ revenue. Without the promotional benefit of, say, YouTube, some albums would have hardly been as successful as they were last year. But in terms of pure, direct revenue, streaming provided a mere pittance for music’s top earners.

Maroon 5 had the highest streaming share of 2012’s Moneymakers list with 3.5%. Within that, the highest noninteractive streaming share was 0.5%, or one-seventh of the total. Drake had the second-highest streaming share with 3.3%, and One Direction had the third with 2.5%. It’s not surprising that Maroon 5’s “Payphone” and One Direction’s “What Makes You Beautiful” were the No. 5 and No. 6 tracks, respectively, on Spotify in the United States in 2012. (Maroon 5 had two more songs in Spotify’s top 100 of the year.)

 

 

 

If Spotify and Pandora Are the Future, Do Artists Have One?

Psy
“Wait, 1.2 billion views and you’re paying me 0.6 cents a view?” / Photo by Getty Images

Streaming services’ growth stirs debate over slim royalties

The New York Times has seen the future of music, and it doesn’t look good for musicians.

As the Times reports, the comparatively teensy amount artists earn from streaming services has caused concern throughout the industry.

While the average musician might earn 7 to 10 cents on an iTunes download, artists receive a fraction of a fraction of a cent each time their songs are played on streaming services. That’s not terrible if you’re Psy, who a Google executive recently said had earned $8 million on the 1.2 billion views for “Gangnam Style,” a rate of roughly 0.6 cents per view. It’s less good if you’re Zoe Keating, a self-described “avant cello” musician who late last year revealed that despite getting more than 1.5 million plays on Pandora in a six-month span, she received less than $1,700. Spotify was a bit kinder: Her 131,000 plays last year yielded almost $550.

Pandora, for one, lobbied last year for permission to lower its royalty rates, which unlike Spotify’s are set by law. A wide range of artists, from Brian Wilson to Rihanna, opposed the leigslation, the so-called Internet Radio Fairness Act. So did the American Association of Independent Music, which represents many prominent indie labelsBillboard reports that the legislation isn’t completely dead and is “just hibernating.”

Artists might dream of penny royalties, but streaming service providers are swimming in big bucks. Pandora is publicly traded, with a share price that values it at nearly $2 billion. Spotify isn’t public, but its investors have reportedly pegged its value at $3 billion. To put that into perspective, the entire music industry saw revenues of roughly $7 billion in 2011, according to the Recording Industry Association of America.

Streaming service companies might be worth a lot on paper, but they’re not contributing much to the record business just yet. Pandora had $202 million in “content acquisition costs” in its last four reported quarters, and Spotify recently said it had made $500 million in royalty payments, the Times notes. That pales in comparison to music downloads’ $2.6 billion in 2011 sales.

Read more here: http://www.spin.com/articles/streaming-services-artist-royalties-spotify-pandora-youtube-debate?utm_source=spintwitter&utm_medium=social&utm_campaign=spintwitter

CBS Sony Logo Split - H 2012

Pivotal Research Group’s Brian Wieser said CBS would gain exposure in fast-growing countries.

CBS should buy Sony Pictures Entertainment, a Wall Street analyst said in a research note Tuesday.

Brian Wieser of Pivotal Research Group told clients that CBS will have cash for major acquisitions now that it has decided to turn CBS Outdoor in the Americas into an REIT while selling off the European portion of that business, as hollywoodreporter.com

“First and foremost, among potential targets we think that at the right price, SPE offers a very strong fit for CBS,” he wrote.

“If we assume SPE were worth around $10 billion in enterprise value and were capable of high-single-digit profit margins, such an acquisition would not be dilutive and would be strategically beneficial,” wrote Wieser. Read more about the article here: http://bit.ly/10vMIbW

The analyst also noted that CBS chief executive Leslie Moonves has expressed an interest in SPE.”Moonves indicated in the press that SPE is the kind of business that CBS would be interested in purchasing,” Wieser wrote. “However, Sony has reiterated several times that the division is not for sale.”

TEN BRANDS TO WATCH IN 2013

TEN BRANDS TO WATCH IN 2013

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Marketers spent close to $1.2 billion on music sponsorship alone in 2012, and that’s not even counting the hundreds of millions that went into commercials featuring current songs that helped many artists impact the Billboard charts. As artists, labels, publishers and tour promoters alike continue to turn to the advertising community to help make up for budget and marketing gaps, here’s a look at 10 brands that will be among the first on everyone’s speed dial over the next 12 months.

Check Out All Our Year-End Coverage and Charts Here

Pepsi

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As Frank Cooper, Pepsi’s chief marketing officer of global beverages, told Billboard.biz earlier this week, the soda giant is prepping a multi-year creative partnership with Beyonce worth $50 million that will be at the center of an even bigger music strategy for 2013. Among the brand’s plans are building a label-like service similar to Mountain Dew’s Green Label Sound and amplified music efforts around its sponsorship of the Grammys, NFL and “The X Factor.”

 
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Having spent the bulk of 2012’s music strategy on its sponsorships of “American Idol” and the Olympics, Coke is turning to its recent $10 million investment in Spotify to guide its strategy for 2013. At the top of that list: a new series of location-based music apps, tentatively titled “PlaceLists,” that the brand already commissioned a network of New York hackers to develop last spring.

Cover Girl

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The cosmetics brand finished the year with a trio of major music endorsements, adding Pink, Janelle Monae and EDM sister duo Nervo to a roster that also includes Queen Latifah and Taylor Swift. Look for big TV looks for Monae and Nervo at the top of the year, and a possible tour extension for Pink when her Truth About Love tour takes off this spring.

Macy’s

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The country’s largest department store marketer is also looking to become its most powerful when it comes to artist relationships. Not only are Mariah Carey, Taylor Swift and Diddy among its many celebrity merchandise partners (and stars of its TV ads), but a new focus on emerging artists helped anoint twin-sister duo Megan & Liz the winners of the IHeartRadio Rising Star competition, sponsored by Macy’s. Look for Macy’s to do something similar in a new strategic partnership with Myspace, which will relaunch in mid-January.

Mondelez

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The year’s most confusing rebrand aside, the new name of Kraft-Nabisco’s packaged food unit represents strong buying power and some big brands, ranging form Oreo to Planters to Trident to Oscar Meyer. At the top of the company’s list for 2013? A sponsorship of One Direction’s 2013 World Tour.

Intel

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Having kicked off 2012 with new creative director Will.i.am, look for Intel to look for new and innovative ways to showcase its technology through music, from its ongoing global events series with Vice, The Creators Project, to a new jogging app with singer Imogen Heap where music reacts to the pace of your run in real-time.

Samsung

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After spending some $600 million marketing its Galaxy products in 2012, Samsung will continue to seek artist and media partnerships using music to amplify its “Next Big Thing” platform and Samsung Music Hub in 2013.

Chevrolet

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Perennially one of the most active brands in music across any category, Chevrolet set the bar high for music in the Super Bowl last year when a spot starring rockers Ok Go doubled as a launchpad for fun.’s “We Are Young.” Look for the automaker to try and top itself during the big game in 2013 as well as continue a sponsorship strategy that has included stops at South by Southwest and our own Billboard Music Awards.

Converse

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With its Rubber Tracks studio in Williamsburg, Brooklyn, hosting over 400 artists in its 18-month lifespan thus far, Converse has quickly established itself as one of music’s most sustainable brands. This summer, CMO Geoff Cottrill helped artists like Nas, Santigold, Blur, Paul Weller, Spiritualized and Plan B play intimate gigs in London when other venues couldn’t take them due to the Olympics. With Rubber Tracks scheduled to do pop-up studios around the country in 2013 as well as continue as presenting sponsor of the Fader Fort at SXSW and CMJ in 2013, expect Converse to be everywhere emerging artists go for the next 12 months.

Budweiser

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The brand’s inaugural Made In America festival, headlined and curated by Jay-Z, was a success — the two-day event grossed $5 million in ticket sales with over 78,000 in attendance, according to Billboard BoxScore. Look for a second year to follow around the same Labor Day timeline as 2012’s event, plus an extension of Bud Light’s renewed deal with Pitbull and a deeper dive into digital music sponsorships.
— made by andrew hampp for billboard.biz

 

Beyonce lands $61m deal with Pepsi

Beyonce lands $61m deal with Pepsi

This article was first published in The Straits Times on Dec 12, 2012.1.jpg

Partnerships of singers with big corporations go beyond music. Beyonce’s husband, rapper and record producer Jay-Z, had a deal with Microsoft to promote his memoir. — PHOTO: ASSOCIATED PRESS

New York – For its campaign with Beyonce next year, Pepsi does not just want to sign up the telegenic pop star for another TV commercial. It also wants to get into the Beyonce business.

In an expansion of the recent marketing experiments that have brought PepsiCo ever closer to the music industry, the company has embarked on a hybrid project with the pop star that will include standard advertising such as commercials as well as a multi-million-dollar fund to support the singer’s chosen creative projects.

“Pepsi embraces creativity and understands that artists evolve,” Beyonce said in a statement. “As a businesswoman, this allows me to work with a lifestyle brand with no compromise and without sacrificing my creativity.”

The campaign will coincide with a blitz of promotion for her next album, which has no title or release date so far but is expected next year.

Sometime after she performs at the Super Bowl half-time show on Feb 3 (also sponsored by Pepsi), she will appear in a new TV ad – her fifth for the soft drink since 2002 – and her face will be on a limited- edition line of soda cans.

The less conventional aspects of the deal are meant as collaborative projects that indulge Beyonce’s creative whims and might well have no explicit connection to Pepsi products.

They are still at the brainstorm stage, but projects could include live events, videos, “a cool photo shoot” or almost anything else, said Ms Lee Anne Callahan-Longo, general manager of Parkwood Entertainment, Beyonce’s company.

For Pepsi, the goal is to enhance its reputation with consumers by acting as something of an artistic patron instead of simply paying for celebrity endorsements.

“Consumers are seeking a much greater authenticity in marketing from the brands they love,” said Mr Brad Jakeman, president of PepsiCo’s global beverage group. “It has caused a shift in the way we think about deals with artists, from a transactional deal to a mutually beneficial collaboration.”

The multi-year campaign is estimated at US$50 million (S$61 million), the bulk of it for media placements and promotions around the world, and the remainder split roughly equally between Beyonce’s fee and what Pepsi calls a creative content development fund.

According to the tracking firm Kantar Media, PepsiCo and its archrival Coca-Cola Co each spent about US$148 million in the United States to advertise their soft drink brands in the first six months of this year, across all measured forms of media, such as television, print, digital and radio.

Over the last decade, many consumer brands have been taking more active roles with artists, particularly in pop music. Converse, Red Bull and Toyota’s Scion line, for example, have become as familiar in the music business as any record label or concert promoter by paying to help create and promulgate music.

Bands always risk fan disapproval when shaking hands with big corporations. But with record company budgets diminished, Madison Avenue money is often seen as essential. PepsiCo has been part of this trend through Green Label Sound, a label financed through its Mountain Dew drink, which over the last four years has paid to release free music by under- the-radar groups such as Matt & Kim and the Cool Kids.

“We recognise that there have been massive disruptions in music industry: lower investment in artist development, fewer points of distribution and financial constraints,” said Mr Frank Cooper, a top marketing executive in PepsiCo’s beverage division who has been a force for such projects. “We look at those disruptions as opportunities for Pepsi.”

These deals are not limited to music.

In 2010, Beyonce’s husband Jay-Z partnered with Microsoft to promote his memoir, Decoded. According to a case study led by Anita Elberse, a professor at the Harvard Business School, the publisher could contribute only US$50,000 for marketing, but Microsoft paid US$2 million for an elaborate scavenger hunt that promoted the book as well as the software giant’s new search engine, Bing.

For Jay-Z, the campaign was a success. But the effect of such deals on corporate partners such as Microsoft is hard to measure, Prof Elberse said. “Even if they see an increase in market share,” she said, “it’s hard to attribute that to this one thing they did with a star at one point in time.”

Mr Cooper, however, was confident that its music projects, such as Tonight Is the Night by the little- known rapper and singer Outasight – which sold 1.1 million copies after a push in 2010, when the song was featured in a commercial and Outasight appeared on the Pepsi-sponsored show The X Factor – bring a return on investment. “We believe all that transfers into brand equity for Pepsi, and, ultimately, sales,” he said.

Pepsi’s deal with Beyonce is an outgrowth of ventures such as Green Label Sound, but on a scale befitting her superstar stature.

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Beyonce has done five commercials since 2002 and the one above in 2004 was one of them. She was a Pepsi ‘gladiator’ spokesman with Britney Spears (left) and Pink (right). — PHOTO: PBB

In addition to the commercial and the soda can, the deal will also involve sponsorship of her world tour next year.

All the standard sponsorship elements will be present on the tour, such as prominent Pepsi logos. That kind of marketing, Jakeman said, is “still important, but insufficient” to reach savvy young consumers. So Pepsi will also play a role in selecting local talent as opening acts at various points around the world. And who knows, a concert stage would seem a perfect spot for some fund-supported video or social-media experiment.

“It’s wise for a brand like Pepsi to give an artist the ability to truly express herself,” said Ms Callahan-Longo of Beyonce’s company, “instead of just the old-school way of, ‘Do you want to be in an advertisement?’ “This is much bigger. This is, ‘How can we create something together that is truly unique?'”

New York Times

 

2012 YouTube Top Trailers Leaderboard

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For many of us, trailers are half the fun of going to the movies. Thanks to YouTube, there’s no price of admission to watch them. More and more, entertainment brands are promoting trailers on YouTube so fans can view and share them whenever they choose. As people engage with their favorite titles pre- and post-launch across multiple screens, online trailers have become an integral part of entertainment launches today.

The 2012 YouTube Top Trailers Leaderboard celebrates the movie, TV, and gaming trailers that most moved audiences through a winning combination of promotion (paid ads) and popularity (organic views). Combined, they have over 170 million views — proof that great ads can be entertainment that people choose to watch.

1. “Surprise” – Official Call of Duty: Black Ops 2 Live-Action Trailer

Uploaded 10/29/12 by CALLOFDUTYCreative Agency72andSunny

Media: OMD. Views: 35,152,507

2. Reveal Trailer – Official Call of Duty: Black Ops 2

Uploaded 5/1/12 by CALLOFDUTY. Creative Agency: The Ant Farm

Media: OMD. Views: 29,598,702

3. The Dark Knight Rises – Official Trailer #3 [HD]

Uploaded 4/30/12 by WarnerBrosPictures. Media: OmnicomMediaGroup

Views: 26,825,747

4.  SKYFALL – Official Trailer 

Uploaded 7/31/12 by SonyPictures. Creative Agency: The Picture Production Company (PPC)

Media: Universal McCann. Views: 17,572,461

5. Ted – Trailer 

Uploaded 4/5/12 by TedIsReal. Creative Agency: Vibe Creative

Media: Ignited. Views 15,404,876

6. The Hunger Games Theatrical Trailer #2

Uploaded 2/1/12 by TheHungerGames. Creative Agency: Carve Creative Advertising

Media: Initiative. Views: 12,527,651

7. Revolution – Trailer 

Uploaded 5/13/12 by NBC. Creative Agency: NBC Entertainment Marketing On-Air

Media: Ignited. views: 9,915,019

8. Multiplayer Reveal Trailer – Official Call of Duty: Black Ops…

Uploaded 8/7/12 by CALLOFDUTY Creative Agency: The Ant Farm

Media: OMD. Views: 8,817,813

9. SKYFALL – Official Teaser Trailer

Uploaded 5/21/12 by SonyPictures. Creative Agency: The Picture Production

Company (PPC) Media: Universal McCann. views: 8,773,971

10. Launch Trailer – Official Call of Duty: Black Ops 2 Video

Uploaded 10/16/12 by CALLOFDUTY. Creative Agency: The Ant Farm

Media: OMD. views: 8,230,452

Source: thinkwithgoogle.com. View count as of 12/18/12

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