This post was co-written by International Association of Entertainment Lawyer (IAEL) members Bernard Resnick (photo), Enric Enrich, Massimo Travostino and Sally Mattison
Everyone knows that selling recordings is important, but in today’s music industry, sales of recordings are only one element of an artist’s success. Artists must supplement their recording revenue with other streams of income in order to make a decent living. These other streams of income include items such as songwriting/music publishing; fan club; selling merchandise; live performances; and branding/endorsement revenue.
In the past, many artists and their managers hesitated to enter into branding or endorsement agreements, as they feared that their fans would abandon them for “selling out”. The artists and managers of today, however, have grown up in a world where advertising is ubiquitous. They are more used to seeing celebrities associated with commercial brands — see below for an extensive list of examples — and the fans are less likely to think less of an artist who engages in a deal with a brand.
In a time when major label rosters are diminished and more and more people aspire to be professional musicians, artists are increasingly conscious of their identity as “brands”. Building awareness of their brands, including through means such as corporate sponsorships, endorsement deals, and sales of merchandise, is now less likely to be seen as selling out, and more likely to be seen as acceptable, desirable, and even necessary.
When negotiating the agreement with the brand, Artists and Managers should keep the following issues in mind:
– Term: what is the length of the agreement? ◊ very often is convenient to link the contract duration to a specific initiative (e.g. the tour) or to other deals (e.g. new product and/or new recording launch and distribution)
– What is the scope of sponsorship? For example, does the deal cover tour, merchandising, recordings, video, social networking, advertisements, etc.? It is important to strike the right balance between money and reputation, which is a function of the Artist’s image and notoriety before the deal, the Artist’s future objectives and positioning the Artist properly within the music market. In some European countries, the commercial use of a person’s image is very strict and requires express consent. Therefore, careful and precise drafting to specifically define the ways in which brands can use the name, likeness and image of the Artist is essential.
– What is the amount of sponsorship fee?
– Is the artist going to be working with the brand on an exclusive or non-exclusive basis, and vice versa? During the contract term, will the brand be allowed to enter into sponsorship deals with other artists who may have a similar sound or audience?
– What other merchandising or cross promotion efforts can be part of the branding deal?
These are just a few examples of how to replicate the success of recent successful Artist-Brand associations, such as: Justin Bieber with WalMart; Britney Spears with Pepsi; Lady Gaga with Virgin Mobile, Gilt Groupe, Zynga, and Polaroid; Eminem with Lipton, Chrysler, the National Hockey League, ESPN television, and Activision; Rihanna with Nivea; Carrie Underwood with Olay; various artists with Old Navy; T.I. with AXE Body Spray; Sick of Sarah with Dress Barn’s Maurices chain; Train with Coca-Cola; OK Go with Samsung; Bob Dylan with Victoria’s Secret; Jay-Z with the New York Yankees baseball team; various artists with MTV and Subway Restaurants; various artists with Mountain Dew; Santigold, Pharrell Williams and Julian Casablancas of the Strokes with Converse; Fergie with Dr. Pepper; Kiss with Dr. Pepper; T-Pain with Bud Light beer and Toshiba; Blur with Michelob Light beer; will.i.am and Slash with FloTV; Grizzly Bear with Volkswagen; The Heavy with Kia; Arcade Fire with the National Football League; various artists with Toyota Scion; various artists with Qdoba Mexican Grill; Chris Brown with Wrigley; Justin Timberlake with MySpace, Sony, Givenchy, Audi and Callaway Golf; Miranda Lambert with Cotton Incorporated; and Beyonce with Tommy Hilfiger, General Mills, DirecTV, Vizio, Nintendo, and L’Oreal.
To find out more about branding deals, don’t miss IAEL’s Master Class at midem 2013, “Mock Negotiation of a Branding Deal” at 12:00 on Sunday, 27 January. The session features experienced entertainment lawyers Enric Enrich (Spain); Bernard Resnick (USA) and Massimo Travostino (Italy).