Saturday, July 12, 2008

It’s American Brandstand: Marketers Underwrite Performers

The hip-hop and R&B producer Jermaine Dupri has discovered best-selling acts like Kris Kross and Da Brat, has produced hits for Mariah Carey and Jay-Z, and now runs the urban music division of the Island Def Jam Music Group. He’s also looking for fresh talent for a new label financed by a company new to the music industry.

The new player? Procter & Gamble.

The consumer goods giant is part of a wave of companies getting into the music business to promote their own products, essentially becoming record labels themselves.

Procter & Gamble, for example, is joining Island Def Jam in a joint venture called Tag Records, a label that will sign and release albums by new hip-hop acts. It is named after a brand of body spray that P.& G. acquired when it bought Gillette.

And Mr. Dupri, a music-industry veteran and the longtime partner of the singer Janet Jackson, sounds quite pleased with his new gig.

“I’ve never seen someone wanting to devote this much money to breaking new artists,” said Mr. Dupri, who will serve as president of Tag Records while keeping his position at Island Def Jam. “Nobody in the music business has the marketing budget that I have.”

At a time when online file-sharing is rampant, record stores are closing and consumers are buying singles instead of albums, getting into the music business might seem like running into a burning building. But as record labels struggle to adjust to a harsh new digital reality, other companies are stepping up their involvement in music, going far beyond standard endorsement contracts and the use of songs in commercials.

These companies — like Procter & Gamble, Red Bull and Nike — are stepping outside of their core businesses to promote, finance and even distribute music themselves.

A few months ago, Bacardi announced that it would help the English electronic music duo Groove Armada pay for and promote its next release. Caress, the body-care line owned by Unilever, commissioned the Pussycat Dolls singer Nicole Scherzinger to record a version of Duran Duran’s “Rio” that it gave away on its Web site to promote its “Brazilian body wash” product. The energy drink company Red Bull is starting a label that is expected to release music before the end of the year.

And at least some of this music is credible: a hip-hop song that Nike released by Kanye West, Nas, Rakim and KRS-One was nominated for a Grammy Award for best rap performance by a duo or group.

Unlike Starbucks, which got into the music business to sell CDs at its stores, these companies want to use music to promote products they already sell.

“It’s not about money,” said Sarah Tinsley, a global marketing manager at Bacardi. “It’s a branding exercise.”

Unlike the exclusive album deals that Wal-Mart is striking with groups like the Eagles, these companies are attracting artists at the height of their relevance. Two weeks ago, Converse released a single by a combination of artists that The Times of London called “a three-headed Frankenstein’s monster of coolness”: the Strokes singer Julian Casablancas, the producer Pharrell Williams and the R&B performer Santogold. Offered as a free download on Converse’s Web site, the song received mostly favorable reviews from both blogs and newspapers.

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