Kavita Maharaj, Global Director of Corporate Relationships at Havas Media spoke earlier this week at Midem, the music industry’s premier annual gathering in Cannes. Kavita joined a panel of prestigious music industry gurus and brand specialists to debate the challenges faced by the music industry and how it can work more effectively with brands to increase revenues in the future.
The music industry is facing a huge challenge - as music consumption is at its highest level, music sales continue to slump as the increased number of downloads of digital tracks failed to make up for the plunge in the sale of CDs in 2008. Nielsen year-end figures 2008 released earlier this month showed that total album sales, including album equivalents made up of single digital tracks fell 8.5% (to 428.4 million units from 500.5 million in 2007). Physical album sales fell 20% to 362.6 million from 450.5 million, while digital album sales rose 32 per cent to a record 65.8 million units.
Kavita comments: “This is a deeply troubling trend for the recording industry. Despite record consumption levels, music executives are finding it hard to turn this into much-needed revenues as high interest in content, does not necessarily translate into willingness to pay amongst consumers. Successful industry players will be those who can collaborate effectively with brands and all the other music stakeholders to cultivate new revenue streams through innovative product and pricing strategies.
For example, there is a high level of consumer demand and preparedness to pay for live music concerts. Therefore, involving brands and other stakeholders in effective deals with live music concert properties, where all parties share in the spoils, is a potential revenue goldmine for the music industry and brands. The key to success will be music/brand partnerships that take advantage of consumer insights to determine what consumers will pay for and then negotiate partnerships that provide compelling return on investment for both the brand and the music industry.”
