Advertising Industry Vs Music Industry

[I'd Rather Play]

I was listening to a radio prog about Saatchi and Saatchi. Their internet based revenue Is 40% of their business. That's up from 3% from 10 years ago.

So why was it the advertising industry was able to adapt and prosper through the web but the recording industry was not. Is it because the music industry is full of inept people or did the two industries face very different challenges from the digital age?

[soulgreed returns]

Maybe in advertising, you're selling eyes on the advert, which the internet, as a communication medium, is very good for.

In the music industry, people are selling... For the "golden age", records mainly i guess, with music on, which is now available for free.

Actually I think the problem for the music industry is uncertainty over what the product is. The internet is just a means of communication, which is obviously way easier to harness for advertising. For music, the internet coincided with technological advances (i.e. Cds which could be ripped to computer files), that meant piracy was a no brainer for most consumers.

I personally think making cd audio compatible with cd data was what killed the music industry as it was, and the internet is a red herring to some extent, it just facilitated file sharing, it didnt enable it.

Maybe without the internet the music industry would have fared even worse?

[Hugh Robjohns]

Their internet based revenue Is 40% of their business. That's up from 3% from 10 years ago.

You can't really form any opinion from that. It just tells you that the balance between the different outlets for their advertising has changed -- and there's no surprise in that. To know whether their internet marketing is successful (and more successful than the record industry), we also need to know their turnover and profit margins ten years ago in comparison to today.

H

[damoore]

Given the amount of music being used on the Internet, if you include the money spent creating music in the music side of the equation, I expect you would find comparable ratios. But, of course, what is measured on the music industry side is just the money derived from delivering the product.

So the two sets of numbers are not comparable.

[CS70]

I was listening to a radio prog about Saatchi and Saatchi. Their internet based revenue Is 40% of their business. That's up from 3% from 10 years ago.

So why was it the advertising industry was able to adapt and prosper through the web but the recording industry was not. Is it because the music industry is full of inept people or did the two industries face very different challenges from the digital age?

Well the content in advertising is rather irrelevant. If people copies your stuff, you're only happier.. the whole point of good agencies is to be so creative that people want to share your work without paying for it, *even if* it's an ad.

Thieves work in your favor - exactly the opposite as the recorded music industry.

[Goddard]

Um, don't think many ads are 'pirated' are they? Except perhaps Superbowl ads...

Point being, ad agencies aren't losing revenue due to Interweb piracy; for them the Interweb is just another media format/market to exploit.

Did that program indicate whether their "old media" (print, radio, TV) revenue streams had been in decline? If so, that of itself could well explain why their Interweb ad revenue accounts for such a large percentage today.

Coincidentally, heard this on radio today about musicians wanting to know how to get their music into ads/commercials.

[4TrackMadman]

I don't know about advertising but I imagine there are a few more companies than what is left in music now, you have Sony and BMG now controlling everything if not mistaken?

[dubbmann]

To echo what some others have said, the two 'industries' are very different. Music has been hurt by many factors, but the bottom line is too much music chasing too ffew dollars/pounds/euros - admittedly, w/t factor of piracy thrown in to reduce the money being spent. Advertising, otoh, isn't being beset by an explosion of 'content' and nobody cares about pirating an ad. That said, I'd be suspicious of S&S's numbers. Advertising is being hurt by Google/Doubleclick/... cutting out the agency fees as much as possible. Ad agencies make their money from a cut of ad buys they make for clients, and Google et al want to have that business themselves. I think ad agencies are on borrowed time, but for different reasons that the music biz.

Cheers,

d

[tea for two]

Opportunity to reminisce one of my heroes Abram Games.
Mention Abram Games to Charles, Maurice (Saatchi), Martin (Sorrell) they will get misty eyed.

Abram Games graphic art was social commentary for six decades.
Born in WhiteChapel (London) Abram came to the fore during WW2



Abram was a humanist. This was a free design from Abram


Public



::::

I was listening to a radio prog about Saatchi and Saatchi. Their internet based revenue Is 40% of their business. That's up from 3% from 10 years ago.

So why was it the advertising industry was able to adapt and prosper through the web but the recording industry was not. Is it because the music industry is full of inept people or did the two industries face very different challenges from the digital age?

Whenever an App, Internet giant (that doesn't have a physical product) speaks of monetizing, they are alluding to advertising revenue :
their largest source of income.

$Billions paid by companies to
Facebook, Google, Instagram, Snapchat, YouTube, Vevo, Vine et al to promote their image, news, products.

Each require differing advertising.

Thus companies hiring specialist Advertising Agencies as Fetch, M&C Saatchi Mobile, Somo, for Apps, Social Media, Web.

Easy to see this is the fastest area of growth in Advertising (250billion App downloads last year).

Compared to music.

Promotion

Promoting Big musicians on Apps, Social Media, Web, is pretty much same as promoting a company.
Big record companies will ride their big horses for all its worth (they always have), whilst it is not worth their while to ride small horses.

Really it is not so much different industries, nor different medium, rather it is about advertising ....
however much we want to say it is about the music.

Justin Bieber breaks 10Billion views on Vevo

Therein is the difference.

Even small companies can find the $£ to advertise on Apps, Social Media, Web.
Whereas promoting smaller, unrecognised musicians .... back of agenda for big record companies, small record companies don't have the budget,
it is really is up to the individual musician, band to do their own advertising, hence eg. Bandcamp, SoundCloud, YouTube channels.

Consumption & payout

The $£ charged to companies for advertising views is far far higher than paid out for instance Spotify streams.
Snapchat charges $100K to advertise.

Snapchat say 8BILLION videos are viewed daily on its App.
Imagine tagging products services on to videos to be viewed 8billion times : this won't happen with music.

We are more discerning of music we like, likely to stream, purchase.

App, Social Media, Web advertising are apartments, eateries, houses, shops we see pretty much everywhere.
Music is those few places we go in to check out, buy.

::::

(BTW Rob C input very much missed, Rob C was up on such things).

[Frisonic]

Is this not a natural consequence of the fact that over the last ten years the internet has generated its revenues from advertising, therefore advertisers have been increasingly paying advertising agencies to place advertisements online on their behalf (fee collected). Whereas over the same time period music content on the internet is increasingly expected to be given away for free. Whilst tiny amounts of revenue are generated (mostly out of that advertising revenue) by things like YouTube and streaming sites this is largely consumed by the record companies themselves (de facto playing a similar role to the advertising agencies) and there has been nothing left to pass on to content creators (musicians)?

Advertisers pay to advertise. Musicians are expected to give it away. Both the advertising agencies and the record companies draw revenues either way. For the advertise the matter is ended. They will expect to see their return through their order books. For musicians its the cheque in the eternal post

Its what I always say, intellectual property is like virginity. You only ever get to give it away the once so chose your moment carefully

[KMuzzey]

The huge bump is because more companies are creating web content and adverts these days: commercials that only appear online, bonus content for buyers of the product, behind-the-scenes stuff, corporate mission & feel good pieces, nonprofit orgs making videos to raise money... the list goes on! And because of this, a lot more videographers and small production companies have been able to flourish. And they all need music for this web content.

So you can't tie the recording industry decline to the ad industry's explosion. But it's also misleading to say "the recording industry's decline" because while the major labels and artists have suffered, the indie guys have finally been given a place at the table and there are ways for your average joe to make money from writing music: libraries, direct licensing, iTunes sales, performance royalties from library and TV placements... and thanks to outlets like iTunes and Bandcamp, people can actually discover your music, buy it, and license it if they want to.

I'm guessing that most of us reading this forum were and are unaffected by "the recording industry" and its decline -- which normally reads as "the major labels and superstar acts." But we can all benefit from the ramping up of creation of web content because they all need music!

Kerry

[Frisonic]

we can all benefit from the ramping up of creation of web content because they all need music!

Kerry

Really? Last time I looked they wanted it for free. Where's the benefit in that? The vision of the internet you have painted there is textbook California Kool-Aid. But it really hasn't worked out that way. I think you will also find that the majors are having a better time of it than you suggest. But not sufficiently better to pass much on to their content creators.

[KMuzzey]

we can all benefit from the ramping up of creation of web content because they all need music!

Kerry

Really? Last time I looked they wanted it for free. Where's the benefit in that? The vision of the internet you have painted there is textbook California Kool-Aid. But it really hasn't worked out that way. I think you will also find that the majors are having a better time of it than you suggest. But not sufficiently better to pass much on to their content creators.

Really? I never do anything for free: when asked I say no and then I tell them what the fee would be. If someone's asking for free, say no. Also, It's a little weird when someone attacks the place someone lives as a retort to information presented. Since no one on this forum is a major label artist, I'm not sure why anyone would concern themselves with what % of revenue is being passed on from Sony or Warner or UMG to their artists -- and doubly so when you consider that many folks here are instrumental or score composers. It might be better instead to shift one's own focus to one's own career and develop a business plan.

This little formula started to work for me about 10 years ago, when I lived in NYC and long before I moved to California. And I never do anything for free, full stop. All license deals have a price tag attached. Production companies doing this legit ad agency stuff never ask for free music here in the US: there's always a budget. It might not be a huge budget, but there's a budget. And you can always pass if it's not enough $$ for you. In my own experience, saying "no thanks" tends to bring them back the next day offering money. Because if they've reached the point where they're asking for permission for the music use it means that their video is pretty much edited and done and the client has already liked it. They'd rather pay a couple extra bucks than go back to the drawing board and come up with something new.

Yes, it's a struggle and yes, it's difficult. But affiliate yourself with the right libraries or boutique licensing agencies and you'll see results. No, you won't be a zillionaire: but you can make money with your music. If your goal is to be famous, then best of luck to you. If your goal is to make money with your music, it's doable. If your goal is to make a full-time living as a composer, that's a little bit harder but IS doable. It won't happen overnight but if you're not willing to put in a few years' investment then it's probably not the right career path for you anyway.

So yeah: it doesn't really matter to all of us what % of revenue Sony/WEA/UMG are sharing with their artists unless Justin Timberlake and Mariah Carey are secretly lurking in these forums . Worry about that once you're a Sony/WEA/UMG artist. Best get busy forming a business plan for yourself, a timeline for deliverables and pitches to potential outlets, filling up the coffee pot and getting down to some serious work!

Kerry

[Frisonic]

Well I'm glad its working for you. Tell more people to say no when asked to give it up for the exposure alone! And I do understand that not all California is the same, that you folk in LA have a different world view from the Robber Barons to the north.

[KMuzzey]

Well I'm glad its working for you. Tell more people to say no when asked to give it up for the exposure alone! And I do understand that not all California is the same, that you folk in LA have a different world view from the Robber Barons to the north.

I imagine that composers in northern california would agree with much of what I said, since they're not robber barons & you can't dismiss something as "drinking the california kook-aid." That's probably akin to someone from London saying "he can't possibly have any talent, he's from the North, and you know how they are."

You can't lump tech companies like google in with composers and then with ad agencies and then tie that somehow to the fall of the major labels a few years ago. Sweeping statements like that are inaccurate. The fact is that independent distribution via places like CDBaby and Bandcamp has removed the major labels as gatekeepers and democratized the playing field. As an independent composer, instrumentalist, songwriter, pop band, EDM guy, whatever -- you can now release your work directly to the public, and they can buy it, and you can license it because you own the sync and master rights, and you can add it to a music library and get TV placements and you can make performance royalties from those placements. You can take all of those short film scores that you did for free and you can release them as a collection of scores on iTunes.

Now, this doesn't mean that you're going to be famous - but it means you can make money with your music. Separate the desire to reach Hans Zimmer-esque status in your career from your desire to make some money, and then from your desire to make a living at writing music.

The "everyone is doing it for free and it's ruining it for everybody else" thing isn't really true, because people in the legit licensing world aren't doing it for free. It's very much like when people were saying "oh great, now that people have Garage Band, kids in their bedrooms are going to be stealing all of the TV and movie music gigs" -- as though someone who can only make garage band loop-music would ever be in consideration for a TV or film scoring gig to begin with.

Seriously, there are opportunities out there and talent, like murder, always gets found out. But it's a long game, and most of the time the guys who win are just the ones who never quit.

My advice to aspiring composers? Make a game plan: have deliverables and goals for yourself month-to-month and for next year and the 5-year and 10-year plan. GROW that career, don't expect it to happen overnight. If you've made $1000 with your music this year, aim to double it next year and make $2000. And do that actively by creating more and better music and by putting it in the right places vs doing it passively by just hoping that something happens.

If you've got the drive to succeed, get busy and don't stop until you've made it happen. It's more possible now than it ever has been, ever.

Kerry

[CS70]

The fact is that independent distribution via places like CDBaby and Bandcamp has removed the major labels as gatekeepers and democratized the playing field. As an independent composer, instrumentalist, songwriter, pop band, EDM guy, whatever -- you can now release your work directly to the public, and they can buy it, and you can license it because you own the sync and master rights, and you can add it to a music library and get TV placements and you can make performance royalties from those placements. You can take all of those short film scores that you did for free and you can release them as a collection of scores on iTunes.

Now, this doesn't mean that you're going to be famous - but it means you can make money with your music.

Seriously, there are opportunities out there and talent, like murder, always gets found out

Just been at a jam tonight, after a recording sessions. Nice place, nice vibe, loads of people making music, some really good music - with nothing to envy to any commercial act.

Nobody - besides myself - was making any money out of it. And we make enough for paying off kit and recording, and that's about it. From live gigs, not from streams (which, for an unknown band in Norway, do unexpectedly happen quite a bit ). The ones who make a living out of it aren't at jams, they play cover bands (and absolutely no disrespect meant - it's a great job, and I've happily been playing my favorite songs, made by others, for more than 25 years).

Now, they probably wouldn't have made any money ten or twenty years ago. Not much's really changed, other than lots of business in home recording gear and services - which didn't once exist - has replaced the studio business - which did..

To "make it" (in the "making a living out of it", not reach mega-star status) is just has hard now than it's every been, because the gatekeepers are structural: marketing, exposure. The internet is another channel. A little bit more accessible perhaps, but not as much as it seems.

There's plenty of talent, and the truth is that 90% or more of it or more will not be heard. Nothing dramatic or negative about it, but music is (like anything else, really) its own reward. That you make or make not a living out if it incidental.

My $.10, of course.

[KMuzzey]

Fair enough.

But from the perspective of a composer/media composer/scoring composer -- you can make money with your music. Even if that's just putting your 200 songs into a music library that licenses for cable TV shows, you can make a few bucks and then make performance royalties off of the TV broadcasts. The same can be said of regular bands: songs (with the vocal stripped out) can be easily licensed through those same libraries.

And what you have now that you didn't have 10 years ago: you yourself can release your band's album onto iTunes or Amazon or Spotify or Bandcamp or....? You don't need a label to do that for you: that gatekeeper is gone.

So sure, you still need to do your own marketing and your own social media -- but at least you can put your product directly into the same marketplace that the big guys use, which was always the hurdle that had to be overcome. And the iTunes Genius works on your behalf a la "people who bought this also liked this." You can be in the same store that the big guys are in! It used to be that that wasn't possible, full stop.

I'll say it again: if the goal is to be famous, best of luck to you. But if the goal is to make some money with your music -- SOME money, not millions of dollars -- then that is possible now where it wasn't before. Find a reliable library or licensing agency that does placements for TV or ad agencies: it's a great place to start.

Kerry

[Frisonic]

Well I'm glad its working for you. Tell more people to say no when asked to give it up for the exposure alone! And I do understand that not all California is the same, that you folk in LA have a different world view from the Robber Barons to the north.

I imagine that composers in northern california would agree with much of what I said, since they're not robber barons & you can't dismiss something as "drinking the california kook-aid." That's probably akin to someone from London saying "he can't possibly have any talent, he's from the North, and you know how they are."

They normally say that about people from London!

[sixtysixmix]

I think there is a basic difference in the economic model of the two industries and that is the client base. The adverts are paid for by companies who wish to promote their brand or product. Music however is paid for by the listener (in the traditional "shifting albums" sense) and therefore the target clients are completely different.

[The Red Bladder]

In reply to the OP, yes, the music biz has been run by some extremely inept people. They honestly thought that they were selling music!

The reality is that you should be selling the entertainment experience. It's called show business for a reason! Music, all on its own was never enough.

Let's look at two examples - Nicki Minaj and Grandaddy. I love both, but for different reasons. One of them is a fantastic entertainment experience, the other is not.

Nicki Minaj - She is a hoot, her lyrics are wild and funny and she puts on a terrific show with lots of lights, smoke and explosions and has a thumping and tight backing band behind her. It's a real spectacle! More than that, she knows how to work an audience. Go to one of her shows and you'll get good old-fashioned showmanship at its best!

Grandaddy - This brilliant Modesto, California band and its leader Jason Lytle, who writes all the songs, really is the true heir to the crown of Pink Floyd. Concept music at its best! These are deep songs to kill yourself by. I just love sitting down with a beer or five and listening to 'The Software Slump' or any other CD from them, come to that. Unlike Pink Floyd through, they make no effort to put on a show. They just sit there and play, so I would not bother to go to one of their shows. They may be very musical, but they have missed the whole point of being in show business! There just is no show!

Seriously, there are opportunities out there and talent, like murder, always gets found out. But it's a long game, and most of the time the guys who win are just the ones who never quit.

Brilliant! That's the gig in one short statement!

[Sam Inglis]

I did go and see Grandaddy, many years ago. They were as dull as ditchwater.

[Drew Stephenson]

That's probably akin to someone from London saying "he can't possibly have any talent, he's from the North, and you know how they are."

Very nearly spat my coffee all over the desk!

[Kinh]

The recording industry is suffering because of streaming and exploitation. Music sales are going down so everyone (especially America) plunders what they can while they can. Just like the minor civilizations plundered Rome at its demise.

The only country that's surviving is Japan. They're the biggest consumers of music per capita in the world and 80% of all music bought is physical (CDs), they're piracy laws are strict, and they try to stamp out streaming.

America is a country full of inbred, morally/ethically bankrupt entrepreneurs so it's no wonder their industry is where it's at. They have no plan for the future just making the quick buck while they can.

[Emmet]

The only country that's surviving is Japan. They're the biggest consumers of music per capita in the world and 80% of all music bought is physical (CDs)

This is the reason for physical dominance in Japan

The Handshake Economy

to get back to advertising, eventually business is going to sit down and wonder why they are paying for ads when half of them are never even seen

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[petev3.1]

I was listening to a radio prog about Saatchi and Saatchi. Their internet based revenue Is 40% of their business. That's up from 3% from 10 years ago.

This could mean an 80% drop in other income in ten years and no change in internet revenue. All depends.