This story goes to press on the heels of last week's news that DreamWorks SKG is giving up the ghost and selling DreamWorks Records to Universal Music Group in a deal reportedly set at $100 million. And, of course, industry insiders are also bracing for the potential fallout from the deal front—speculation is heating up about not just one, but possibly two, mega-mergers that, if they pass regulatory muster, could ultimately reduce the number of major record label groups from five down to three.
Borman's prescriptions for taking the music industry into the 21st century actually marginalize the roles of record labels, which may translate into more opportunity for brand marketers.
M+V: Do you believe all the talk about the music business doing more alliances with Madison Avenue?
GB: Right now, as a consequence of what's going on online, the record industry's ability to promote and market music is being reduced by the lack of record sales. Turning to corporate brands is an alternative but many of the deals that are being done are not necessarily for the better, and in some cases, they are for the desperate. One should not do these deals now under different criteria than in the past just because the record companies don't have the money to spend anymore. When the match-up is right, it is a fantastic thing to do and I've been involved in many of those deals.
M+V: Tell us about one that's worked.
GB: Faith Hill has been a textbook example of building an artist's brand with the help of marketers. She has basically done three deals over the years that built upon each other organically. In the late '90s, we did a deal with Cover Girl, which involved print and TV, which helped us expand our base beyond just country music and into the mainstream; magazine cover opportunities became more available as a result. This led us to Pepsi, which paired her with [child actor] Hallie Eisenberg and [renowned commercial director] Joe Pytka for an ad campaign that ran on both the Super Bowl and Academy Awards. It reinforced the image-building from the Cover Girl relationship to another level. Finally, we did a deal with Alltel, a wireless company that sponsored her tour. We had more control of the creative for the TV ads and we were able to play up her warmth and family-values appeal. Since then, we've had many other opportunities from other brands where we came down to negotiating but they ultimately didn't come together. We're looking for the right match but we're not in a hurry.
M+V: In what other ways beyond tour support or media dollars can an artist solicit support from a corporate brand?
%%PULLQUOTE_RIGHT%% GB: There's a good chance that you'll see certain products with distribution channels getting into the record business. If we can't reach our consumer through the traditional [music] retailer that's disappearing, it means they're going to have to get it elsewhere. Let's say Hank's Motor Oil is distributed in 10,000 automotive locations around the country from gas stations to Manny, Moe, and Jack outlets. If they came to me and my artist, who may not have a record deal at the time, but has appeal to their consumers, I would listen because it's a viable model. I'm not saying this is the answer, but it could be an alternative. I've had conversations with brands about this. By the way, this isn't necessarily new, but it seems that way because they're starting to rise to people's attention.
M+V: A lot of people are worried about the future of record labels. What's going to happen to them?
GB: Once we figure out how to replace the labels for marketing and promotion, they'll serve no purpose. They've been a hindrance in preventing my artists from owning their masters and [by] exploiting them in other ways, which aren't appropriate. We're in an interesting transitional time. Maybe records will become a loss leader. The massive exposure that the music receives when it's given away could generate the kind of [ancillary] revenue that would more than make up for it.