As of late, I’ve been expanding my brand outside of simply creating music, and delving more into the business side of things. One of the ventures I’ve been working on is marketing for a company called mCig, a brand of vapourisers looking to leverage the relationship artists have with their fans, to help promote and sell their product. Simply put, endorsement deals.
The fact is, the music industry has been in a decline for years, and artists have almost forgotten about any sort of mechanical royalties on sales. In fact, most new artists have probably never even seen a royalty statement from their record labels; and now labels are taking a piece of their touring, merchandise, and endorsements via the 360 deal, there’s an even smaller piece of the pie to go around, so artists are looking more actively toward companies to help supplement that income, and companies are looking to artists to help bridge the gap between product and consumer.
In most cases, the company will have their eyes on an artist, and will reach out to the agent, the management, or the label, but in some cases, the artist will even reach out directly to the company. When a company approaches the artist, usually the first step is to establish what the company does, and why it’s a good fit for the artist: what are the synergies between the artist’s brand and the company image? Why does this make sense for the artist? Alternatively, when an artist reaches out to us, usually it’s because they need to meet a financial requirement for a certain part of their business. Maybe it’s to produce a music video? In these cases, a representative will provide a set financial requirement, and send a proposed offer; and once a deal is done, the company will work with the artist to ensure all deliverables are met, and everyone is happy.
So what is the company giving up? It could be cash, equity, royalties on sales of product, or any combination thereof; and the payment schedules on the deal can vary in many ways as well. Perhaps sales goals are in place, and the artist gets paid more depending on how sales go? Are royalties based on net sales or gross sales? This distinction can make a HUGE difference in how they’re paid. With a publicly traded company, like mCig, are there stock restrictions? If an artist must hold the stock for a period of one year before having an opportunity to sell, what is the likelihood the share price will rise, or at the very least remain constant? Because a publicly traded company’s value is determined by shareholders, the internal variables can have a huge impact on the artist’s deal value, and these are largely factors the artist has little control of. So the point is, it’s not always as simple as a cash fee for a job.
So how is the artist going to help the company? Perhaps by appearing in commercials, red carpet appearances, product placement in videos - the possibilities are endless. While the deliverables vary, one constant remains: talent pushes product, plain and simple. Artists have unconsciously built a connection with the fan in such a way that they’re able to have an obvious and immediate influence over their decisions as a consumer. This is a lot of power for one to hold, which means for an artist, selecting which companies to work with and support goes beyond who’s got the biggest cheque.
Personally, when I hear that a company has dropped an artist over a controversial lyric, I get rather annoyed. The artist is doing what they’ve always done; it’s the company’s job to vet all deals, and ensure that their brand ambassadors fit in with the culture of the company.
The landscape of the music business is changing on almost a daily basis, and artists need to continue to adapt with the business in order to grow with it. Making good business decisions with respect to corporate America is a huge part of that.
We see it very clearly; those who embrace this culture of business have elevated themselves to a level beyond just the music. Diddy, Jay-Z, Dr. Dre, 50 Cent; they’ve all become bigger brands than just the artist, thanks in part to the expansion of their brands beyond just music. The music keeps them relevant, but it’s the product that pays.