Are Brands Music’s New Bank? Lars Ulrich and Top Execs on the $1.3 Billion Up for Grabs
Six visionaries talk about what's working, what's not, why a Coke Zero concert in Antarctica makes sense and how the industry can catch up to sports' $12 billion gold mine.
The day after he joins Billboard in New York for a discussion on music and branding, Lars Ulrich will settle into HQ Studio in San Francisco to begin recording Metallica’s first album in six years. And as he prepares to do so, he’s thinking about how the world’s biggest rock band can stay just that -- how Metallica can continue to reach the audience that packed 70,000-capacity stadiums in South America in 2014. “You’ve got these kids that weren’t born when the black record came out,” says Ulrich, 50, referring to 1991’s Metallica, the best-selling album of the Nielsen SoundScan era, which moved another 104,000 of its 16 million total in 2013.
Whether it’s an established band trying to reach the widest audience possible, or a developing act trying to use TV to gain crucial exposure, more than ever brands are part of the conversation. Synchronization licensing for film and TV music use generated $322 million in 2013, further reinforcing the idea of brands powering a new form of radio. And with $1.3 billion in sponsor spending on live music and events to date in 2014, brands are also the music industry’s new bank. “I tell people all the time: ‘The job of the bank is to actually provide things,’ ” says Steve Pamon, JPMorgan Chase head of sports and entertainment marketing. “My job is to make sure you feel the things that we provide.” Pamon, 44, became a powerful player in artist partnerships this spring when he beat out rivals Citi and American Express for sponsorship of Beyoncé and Jay Z’s On the Run stadium tour with a reported $4 million bid.
Joining Ulrich and Pamon for a discussion of the ever-shifting rules of music and brands were Crush Management’s Jonathan Daniel, 53, who has overseen the careers of Sia, Fall Out Boy and Train; Atlantic Records’ Camille Hackney, 43, who has put together brand deals for Janelle Monae (Cover Girl, Sonos, American Express), Hunter Hayes (Pepsi, ConAgra Foods) and Charli XCX (Samsung, JBL); Patience Ramsey, 37, of Translation, the ad agency that helped created the Budweiser Made in America festival; and Jennifer Frommer, 46, who has helped assemble seven-figure deals with T-Mobile and MasterCard at EDM conglomerate SFX.
Lars, Metallica has certainly turned down more offers than not. Let’s start with what you and the band are looking for in a brand partner.
Lars Ulrich: There’s a filtration process that starts with the managers here in New York, Q Prime. They’ve been the first barrier shielding us from anything that’s not super cool, not right.
What’s off the table for Metallica?
Ulrich: Increasingly in our career, absolutes don’t play a role. The minute we have a conversation about “what does the fan want?” we stop ourselves, because it’s a lost cause. If you put 20 Metallica fans around this table, they’re going to tell you 20 different things. We really turn the conversation inward: “What are we comfortable with? Is this something we feel we can get behind?” It’s not about selling out, but whether it’s selling our souls. As you lay in bed every night, [you ask yourself], “Do I feel good about the choices I made?”
Last December Metallica became the first act to perform in Antarctica, with a little help from Coke Zero. What’s the next frontier?
Ulrich: There aren’t any left. At least on this planet. We’d have to do space.
Camille Hackney: Red Bull did a space drop, but they did not do a performance.
Jennifer Frommer: [Lady] Gaga is doing that.
Hackney: You need to be under the sea, in a dome.
Ulrich: One thing Metallica loves to do, we love to go to unexplored places. We were in China last year for the first time. Got a chance to go to Malaysia last year for the first time. There are still frontiers that maybe five, 10 years ago there was no infrastructure to support the type of thing we do. When someone said, “Antarctica” -- you have to look at Coke Zero and you may feel OK about getting in bed with that. So we did this thing for Coke Zero that helped facilitate that particular [event] in Antarctica, but it was primarily a campaign for Latin America. That doesn’t mean that we would get in bed with Coke Zero in the United States. You have to look at what the scenario is as a one-off.
In August, SoundScan reported new lows for weekly album sales, as if the industry needed another sign that the music business has to seek ancillary revenue. Camille and Jonathan, from the label and management perspectives, how have your roles evolved to address this need?
Hackney: I try and find that right pairing between artist and brand. I’ve been doing it for a while -- (gestures at Ulrich) we used to work together back in the Elektra days -- so I’ve seen the growth and the need for the pairing to happen. A lot of it is about the promotion that comes from the artist, whether it’s a major synch, and the millions of dollars of media that the advertiser will spend that the labels don’t spend. Sometimes it is a revenue conversation, and sometimes it’s a bit of both.
Jonathan Daniel: Every artist is different. With an artist like Sia, she’s not against brands, but it’s not as interesting to her. But for artists like Fall Out Boy or Train that want to be on the radio and huge, there are a lot of brand opportunities. I’m more into getting the music out by any means necessary than, “Hey, what’s the check?” We did a Samsung spot with Train’s “Hey, Soul Sister” where the band was well paid, but even if it [had been] free, it was so big for that song. It became the biggest song of the year. And I don’t know if it does that without that spot.
Frommer: I was so jealous of that Samsung spot. I wanted that for one of my artists, and I was close, but you beat me. You look at things with that lens on: “How many tracks will it sell? How much exposure will my artist get for the song?”
In 2014, live music and events are estimated to earn $1.3 billion in sponsorship revenue, while the top four sports leagues alone will get more than $12 billion. How do the folks in this room help bridge that gap?
Steve Pamon: The key thing that prevents us from really becoming as big as we could be in it is the organization of the music industry. When I was at the NFL, we had a very specific sponsorship group; we had a very specific process.
Hackney: And you know the schedule of all of the games.
Pamon: Camille raises a very big point -- if I invest in the NFL, I can tell you that on Sept. 4 the Green Bay Packers are going to be playing the Seattle Seahawks at 8:30 ET, unless there’s an act of God. We do
about 1,000 events a year -- about 40 percent are music. I can’t tell you the last time I’ve seen a ticket that said “presented by Chase” where the musical act played at [the time on the ticket]. But before you get to that, the question the music industry has to ask is, “Who’s on first?” (gestures at Ulrich) Who comes to see me about a deal with Metallica? Because I can tell you, Universal has a guy who’s doing catalog, Universal might have a person doing new records, they might have label people. Three people might come to me to talk about the same thing -- and that’s ignoring the agents, the managers. And then we have festivals, radio stations, video channels ...
Hackney: Darn, Steve!
Pamon: We’ve had 16 to 17 different people come and try to represent the same thing. The biggest takeaway is sponsorship means support. It’s not about us supporting you, it’s about you supporting us in exchange for money. Once you tell me how it supports us, we’ll pull out all the stops to support you. Roc Nation did a hell of a job with the [On the Run Tour] because one of the first things they did was sit down and say, “What are you guys trying to accomplish?”
What about the role brands play in the creative process? Jonathan, your bands get a lot of attention from the advertising industry. Train has a song called “Cadillac, Cadillac” on its new album. So does Columbia then take that to Cadillac?
Daniel: I think that’s probably too on the nose for a brand.
Frommer: Yeah, they throw you out.
Daniel: For me, one of the challenges with working with brands is a lot of times they want a song specifically that fits their brand, and they want it to be a hit. Those two things don’t necessarily go together. Hits are magic songs. Maybe somebody can build them in a lab, but I don’t know anybody.
Daniel: Maybe Sia can. But when people come to her [she’ll say], “I can write the song for this, but that’s not necessarily going to be a song that would go on the radio too.”
Hackney: Typically the ad agency comes, they have a brief [discussion], they want a song that hits that emotion. Other times you go out there with this amazing song, it’s synchable, the advertiser is looking for something, and you match the two. Brand deals happen in a totally different way. It’s not about walking into an agency or a brand and saying, “We’ve got these songs.” It’s much more of a conversation about, “How can we meet your needs and your goals? How can we help you move product or connect better with consumers?”
Pamon: From a bank’s perspective, we’re aligning ourselves with purchases. You buy music, tickets, admission to a festival -- that’s a lot of how we interact with the music business. We’re not as interested in getting to the front of the creative process with, say, a Metallica. We’re interested in getting next to Metallica’s fans, as they form their relationship with Metallica. One of the worst parts about brand partnerships is when they’re inorganic. Why would we want to interfere with the creative process of Metallica? That would be stupid, because that’s not what we do. But if you’re a fan of [Metallica’s] music and we can provide access so you as a fan have a deeper relationship, and you as a fan attribute that to Chase, then the conversation is wide open.
What are the difficult parts of that conversation?
Hackney: I’ve learned this over time: Make sure that the artist meets the brand person, not the agency person, and they have a meeting of the minds before anything is done.
Ulrich: You can take that a step further and say you’re not going to get in bed with someone who doesn’t understand who you are.
Hackney: I work with Janelle Monae, and she has a distinct look. There was a campaign we were working on early in her career and the brand wanted her to dress in purple. She got to the set and said, “Do you not know who I am? I dress in a uniform. I dress in black and white.” And we had to part ways in preproduction.
Frommer: And if you know that artist is controversial or polarizing, you’ve got to know that going in, or don’t make the deal.
Hackney: I always give full disclosure about the artist’s past so that the brand person is never surprised. A PR person or the lawyer Googling and saying, “Did you know ...?” -- that’s the absolute worst thing that can happen.
And when it goes wrong, the public can see the brand as censor. That happened in 2013 when Mountain Dew pulled out of deals with Lil Wayne and Tyler the Creator over sensitive content. But on the other end of the spectrum, there was Doritos -- another PepsiCo brand -- at South by Southwest this year sponsoring Lady Gaga being vomited upon as performance art.
Pamon: It’s the context of the performance as well. We did the On the Run Tour, which was very successful. That is an R-rated show. If we had the On the Run TV special and it wasn’t on HBO, we would have pushed for a cleaner thing.
Ulrich: Don’t you go to Lady Gaga to get her to vomit on herself? You want that edgy, controversial thing that people are going to talk about.
Hackney: People bashed Gaga and Doritos for doing it, but I thought it was brilliant. Everyone to this day still talks about it, so good for them. Their whole platform is “be bold” -- you had to do a bold challenge to get into the show. She was a representation of boldness in its most emphatic forms.
Patience Ramsey: When you’re buying big superstar talent, there’s a history there. You know if they’ve ever been arrested. All of these factors that weigh heavily on a blue chip brand. Not only is the artist endorsing the brand, but the brand is endorsing the artist. When you get more into the emerging acts, you just don’t know them that well, so there’s an inherent level of risk.
How important is risk in what each of you do?
Frommer: It’s the program more than the individual, because I’ve been in positions where the brand will say, “They’re going to make it, right? They’re going to have a No. 1 hit, they’re going to be all over Spotify, the biggest thing in the world?” And I have to say to them, “I don’t know. Take a chance, make a mistake. Do something different.”
Hackney: And when you get that one right, it’s phenomenal.
Pamon: Also, it’s a cost issue. Fundamentally it’s like anything in life: Something that’s a quarter I can take a chance on, something that’s $250, you better explain it.
Frommer: Where have you been my whole life?
Pamon: Well, hey, [you and I ] are going to do a deal pretty quickly. It’s really changed the few years I’ve been in the music industry. We have a lot more transparency. We’d have to talk to five guys to get to [Ulrich] is what Camille is saying, so you may not know the opportunities that could come our way that we don’t see. But the walls are coming down now, people are more comfortable, and we don’t want to be in a place that’s inorganic. Because guess what? People see through that. The fans see through that, and so does everyone else. Even if we’ve managed to fool ourselves, it’s going to get caught in the end. Why waste the time?
U2’s deal with Apple, estimated at $100 million in media spend for the ad campaign alone, just became the biggest brand deal in music history. Did it work?
Daniel: I don’t think it achieved the desired result, at least from the artist perspective. I’d always prefer that the music speak louder than the stunt. When the music feels like an afterthought and the artist a punchline, it’s hard for me to celebrate the idea, as bold as it may have been.
Hackney: The giveaway stunt just ups the ante on how labels launch significant projects. This rivaled Jay Z/Samsung. I’m inspired to plot what’s next with a brand partner. Most bands, and certainly any label, would kill for a $100 million media campaign, or whatever the actual multimillion-dollar media spend is. The proof of the partnership for the band, however, will be revealed when the follow-up album is released. Did the stunt spark a new wave of discovery? Will the next album attract new fans? Will radio play the singles enough to spark a top 20 hit? Will it bring down the average age of their ticket buyer?
Ramsey: The backlash could have been prevented if they had simply put in place some sort of required action to obtain the music -- even as simple as a “click here to download the album.” The idea of things appearing on your phone without your consent feels very “big brother” and unwelcome. It forces us to wonder: Is the brand really getting its money’s worth?
Ulrich: I think U2 are the coolest… it's 2014 and anybody who thinks outside the box, or attempts in any way, shape or form, to break the status quo in the world of music, should be applauded. To me, it's not about whether the endeavor is a success or not. It's the fact that they have the balls and the foresight to throw something this radical at all of us. We are embedded in our creative process right now and this type of attempt to reinvent the wheel inspires me immensely.
This article first appeared in the Oct. 4th issue of Billboard.