Is Product Placement $aving the Music Industry?

Eden PearsonSean Leahy

Decreasing (Legal) Record SalesArticle Summary

How Much Does it Cost?Relation to Class

Discussion

What’s Next?

Decreasing (Legal) Record SalesArticle Summary

How Much Does it Cost?Relation to Class

Discussion

What’s Next?

Decreasing (Legal) Record Sales

• According to the Recording Industry Association of America (RIAA), global music piracy each year causes:– $12.5 billion of economic loss– 71,060 U.S. jobs lost– $2.7 billion in workers’ earnings lost– Over $800 billion in tax losses

Decreasing (Legal) Record Sales

Article SummaryHow Much Does it Cost?

Relation to ClassDiscussion

What’s Next?

Article Summary: “Singing Songs of [Your Brand Here!]”

• Adam Kluger: Self-made budding music mogul• He realized how much revenue the recording

industry was losing in the new “digital age”• The music-business trend that most caught his

attention was product placement

• 1999: “Summer Girls” – LFO– Abercrombie & Fitch

• 2002: “Pass the Courvoisier” – Busta Rhymes– Courvoiser cognac sales spiked after release – Brought attention to the value of “brand drops”

for both recording artists and marketers alike

Article Summary: “Singing Songs of [Your Brand Here!]”

Article Summary: “Singing Songs of [Your Brand Here!]”

• Kluger made over 400 phone calls to record labels and large companies

• Finally sold them on the value of product-placement in song lyrics and music videos– First song: “Beautiful, Dirty, Rich” – Lady Gaga– Also: “Zoosk Girl” – Flo Rida & T-Pain

Decreasing (Legal) Record SalesArticle Summary

How Much Does it Cost?Relation to Class

Discussion

What’s Next?

• Costs:– $40,000-$250,000 per product placement– Varies based upon the artist’s popularity and

relevance– Placing brand names in song lyrics can cost over

$500,000

How much does it cost?

• Cost for product placement can more than cover the production cost for an entire video shoot

• By Kluger’s own prediction:– “It will get to the point where the

brand is paying for the entire production of an album,” explains Kluger. “The labels and artists will not have to put up any money. So everything is profit. That’s 2 years away, not 10.”

How much does it cost?

“Billionaire” – Travie McCoyPaid placement of Mini

Cooper in 2010 music video

Decreasing (Legal) Record SalesArticle Summary

How Much Does it Cost?

Relation to ClassDiscussion

What’s Next?

• Perception: – “The Clutter”: The average person is exposed to 3,500

ad info pieces per day, leading to a “sensory overload”– “Perceptual vigilance”: consumers are more likely to

be aware of stimuli that relate to their current needs• Learning & Memory– “Modeling”: imitating others’ behavior– “Memory”: acquiring information and storing it over

time

Relation to Class

Decreasing (Legal) Record SalesArticle Summary

How Much Does it Cost?Relation to Class

Discussion

What’s Next?

• Can you think of any songs with products in the lyrics or videos?

• Do you think product placement in songs and music videos would make you more likely to purchase the product?

Discussion

• Helm, B. (2010, December 2). Singing songs of [your brand here]. Bloomberg Businessweek, 86-90.

• Pinchevsky, T. (2009). When bands and brands collide. Minyanville, Retrieved from http://www.minyanville.com/businessmarkets/articles/AAPL-hpq-mot-MAT-F-dai/6/3/2009/id/22916

• Plambeck, J. (2010, July 5). Product placement grows in music videos. New York Times, Retrieved from http://www.nytimes.com/2010/07/06/business/media/06adco.html

References

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