As the music business and brands form an increasingly closer bond, New York-based indie label Decon Records is seeing its business skyrocket by diversifying into a full-service creative agency. Its work developing music and video content for big brands like Visa, Rock Star Games and Absolut Vodka is driving record revenue growth for 2013 — even as sales of recorded music remain modest.
“We have a different perspective than other creative agencies because of our experience in the music space,” Decon co-founder/CEO Peter Bittenbender says. “If a brand can find one company to produce great content and also great music, that’s what they’re really looking for.”
Decon got its start releasing underground hip-hop recordings by acts like Aceyalone, Hieroglyphics and the Alchemist in the early 2000s, but it invested heavily in building out an agency after being tapped by 2K Games to soundtrack the blockbuster “NBA 2K” videogame series in 2004. Now the brand side of the business, which houses several video directors and editors led by Decon co-founder and renowned music video director Jason Goldwatch, accounts for 75% of the company’s annual revenue. Decon made approximately $5 million in 2012 and is on track to grow that figure by between 35% and 40% this year, according to Bittenbender.
The cultural capital that often comes with success in niche music markets can be a major draw for brands. Marketing managers have found value in the close awareness of cultural trends, plus access to relevant artists, provided by boutique companies that incorporate active labels. When PepsiCo was looking to make a major investment in the music space with its own singles label, Green Label Sound, it tapped the Cornerstone Agency to run the operation, which had already established its music bonafides with Fader Label and the Fader magazine.
“We have a sense of how to put these things together,” Cornerstone co-founder/co-CEO Jon Cohen says. “And between all the stuff that gets submitted to us from an editorial standpoint and all the people who come to us for our other services, we get exposed to bands very early on.”
Having an in with big brands creates opportunities for artists signed to a label as well as the label itself. Decon frequently gets synchs for its own artists in ads that it produces, such as an Aceyalone placement in a recent Tanqueray commercial. Fader Label duo Matt & Kim has similarly appeared in Cornerstone-produced campaigns for Converse and vitaminwater. Vice Music GM Jamie Farkas says that she takes liberal advantage of resources at her own company’s creative agency (Virtue) and media arm (Vice magazine) when it comes to promoting artists on the label. Vice Music rapper Action Bronson (signed under a joint-venture deal with Atlantic Records) recently headlined a Brooklyn block party that was sponsored by Vice magazine and documented for a promotional campaign by brand partner Ray-Ban.
“Using our own platforms for our artists is a massive win for them,” Farkas says. “The Vice brand is a cultural force, and when we sign an artist they become a part of that.”
In addition to the much bemoaned shrinking margins, the traditional record business model, with its long gestational and promotional periods surrounding album releases, doesn’t easily allow for the volume achievable in the agency world. For three months’ work on a 17-part series of digital spots for Visa tied to this year’s Super Bowl, Decon took home a cool $700,000 in billings.
“I’d have to sell 100,000 records to match that,” Bittenbender says. “And that might take me a year or more.”
Nevertheless, executives at the companies say they remain committed to their labels, whatever small portion of the revenue mix they may represent. For them, music is the secret weapon, even if it’s not the only one in the arsenal.