Record Label Promotion and Distribution Chapter Fourteen Music Business Handbook and Career Guide, 10th Ed. © 2013 Sherwood Publishing Partners

Start Thinking . . . How is a new album release marketed to the general public? What are the various avenues for distribution of recorded music? Music Business Handbook and Career Guide, 10th Ed. © 2013 Sherwood Publishing Partners

Chapter Goals Learn the importance of creating a marketing plan for merchandising a new record release. Gain understanding of record promotion techniques. Become knowledgeable about record distribution. Examine the role of NARM—how it serves its members and the music industry. Music Business Handbook and Career Guide, 10th Ed. © 2013 Sherwood Publishing Partners

The Marketing Plan SWOT The concept The marketing team strengths weaknesses opportunities threats The concept focus on the target market come up with a hook The marketing team Music Business Handbook and Career Guide, 10th Ed. © 2013 Sherwood Publishing Partners

The Elements of a Marketing Plan The Strategy Convince a target audience to buy Can contain promotions publicity paid advertising Once strategy is decided, cover art, promotional material, copy, and graphic elements are created Music Business Handbook and Career Guide, 10th Ed. © 2013 Sherwood Publishing Partners

The Elements of a Marketing Plan Radio Promotion Restricted airplay In-house and independent promoters Reporting stations Promotion to program directors Mailings, telephone follow-ups Payola Music Business Handbook and Career Guide, 10th Ed. © 2013 Sherwood Publishing Partners

The Elements of a Marketing Plan Beyond Terrestrial Radio Satellite radio Digital music channels Internet radio Dance clubs Music Business Handbook and Career Guide, 10th Ed. © 2013 Sherwood Publishing Partners

The Elements of a Marketing Plan Publicity Publicity campaign creates a buzz to get news about a record release published Interviews Satellite tours Traditional media Dailies and weeklies Fanzines Internet sites Music Business Handbook and Career Guide, 10th Ed. © 2013 Sherwood Publishing Partners

The Elements of a Marketing Plan Advertising Paid advertising yields controlled impressions Label advertising Cooperative advertising Trade advertising pull-through push-through Music Business Handbook and Career Guide, 10th Ed. © 2013 Sherwood Publishing Partners

The Elements of a Marketing Plan Digital Marketing Multi-prong approach promotion + publicity + advertising press release to websites place content in digital media buy digital media ads Marketing integration Interactive digital media Music Business Handbook and Career Guide, 10th Ed. © 2013 Sherwood Publishing Partners

The Elements of a Marketing Plan Digital Marketing Selecting Digital Marketing Opportunities E-mail lists assembled by label Video websites E-mail lists assembled by the artist Online music stores Label websites Social websites Artist websites Search engine marketing Third-party websites Cellular phones Blogs Virtual worlds Music Business Handbook and Career Guide, 10th Ed. © 2013 Sherwood Publishing Partners

The Elements of a Marketing Plan International Promotion Labels may spend more money and effort promoting abroad patchwork of territories require individualized and costly attention Timing of foreign releases Foreign promotions through staffed affiliates Strongest foreign markets: Netherlands, UK, Germany, Japan, Australia, France Music Business Handbook and Career Guide, 10th Ed. © 2013 Sherwood Publishing Partners

Record Distribution Digital Distribution Online music is a key channel for legitimate distribution Non-physical formats made up one third of U.S. recorded music revenue by 2011 Larger “slice of pie” than physical product Unbundled music purchases a drawback for labels Traditional brick-and-mortar retailers now offering online services to complement storefronts Music Business Handbook and Career Guide, 10th Ed. © 2013 Sherwood Publishing Partners

Record Distribution Physical Distribution Manufacturing, shipping, and managing inventory are still expensive for labels manufacturing on-demand Distribution and wholesaling challenging money tied up in inventory slim profit margins thousands of SKUs Music Business Handbook and Career Guide, 10th Ed. © 2013 Sherwood Publishing Partners

Record Distribution Types of Distributors Majors Independents One-stops Rack jobbers Music Business Handbook and Career Guide, 10th Ed. © 2013 Sherwood Publishing Partners

Record Distribution [Insert Figure 14.1] Music Business Handbook and Career Guide, 10th Ed. © 2013 Sherwood Publishing Partners

Record Distribution Retail Merchandising From the distributor or label warehouse, the physical goods arrive at retailers Retail competition is bruising Market share versus profit margins Categories of retailers shifted over the years Music Business Handbook and Career Guide, 10th Ed. © 2013 Sherwood Publishing Partners

Record Distribution Mass Merchant Chain Stores Mass merchants gained enough clout to dictate prices demand changes to the music itself Major labels sell direct to mass merchants Exclusive CD retailing deals by artists Coffee chain tie-ups Music Business Handbook and Career Guide, 10th Ed. © 2013 Sherwood Publishing Partners

Record Distribution Entertainment Retailers Record retail brands disappearing Replaced by entertainment software chains DVD, game, and music product To survive, traditional record-only stores must be well managed and situated where retail rents are cheap stock music of the community Music Business Handbook and Career Guide, 10th Ed. © 2013 Sherwood Publishing Partners

Record Distribution Cutouts and Repackaging deeply discounted music excess CDs and oldies with low or no royalties “Rereleases” and “new” releases big name hits genre compilations Music Business Handbook and Career Guide, 10th Ed. © 2013 Sherwood Publishing Partners

Record Distribution Retail Terms and Inducements Generous returns policies all accounts must be given the same discounts Eye-catching placement impulse purchasing price and positioning end caps POP displays “clean” CDs MAP policies Music Business Handbook and Career Guide, 10th Ed. © 2013 Sherwood Publishing Partners

Record Distribution National Association of Recording Merchandisers NARM represents recorded music distribution industry Key activities lobbying local, state, and federal authorities on legislative matters providing myriad information resources to members Music Business Handbook and Career Guide, 10th Ed. © 2013 Sherwood Publishing Partners

For Further Thought . . . What is SWOT? What are the benefits and disadvantages of selling physical CDs versus downloads or streams? Which party is helped or hurt most: artists, labels, distributors, retailers, or consumers? Music Business Handbook and Career Guide, 10th Ed. © 2013 Sherwood Publishing Partners