Creative Rights Caucus Welcomes Sony: Music Industry in a Digital Age

Yesterday, the Creative Rights Caucus in the U.S. House of Representatives welcomed Sony Music to present on the promises and challenges music faces in the digital age.

The panelists were: Caucus Co-Chair Representative Howard Coble of North Carolina, Chairman of the House Judiciary Subcommittee on Courts, Intellectual Property and the Internet; Caucus Co-Chair Representative Judy Chu of California. RIAA CEO Cary Sherman emceed the panel. Sony Music EVP of International Marketing John Fleckenstein and Sony Music President of Global Digital Business Dennis Kooker stole the show with back-to-back presentations.  Other House members in attendance were Rep. Joe Crowley of New York and Rep. Mel Watt of North Carolina.

Co-chairs Chu and Coble opened the panel with brief remarks. Representative Chu noted that creative content drives much of online growth.  She also noted that without creative content much of the consumer demand for digital platforms would not exist.

Sony Global Digital Business: New Markets in the Digital Age

Dennis Kooker presented first with a film montage highlighting the music business’s significant transformation over the past several years due to the growth of digital culture. Today, more than 400 providers partner with Sony Music, on a global scale to allow them to reach audiences with their music, according to Kooker. Mobile platforms are the future of music, as they are growing the number and diversity of music consumers that can now be reached. As an example, he cited Africa as a market whose wide-spread mobile adoption is creating a new market for music that has not previously existed in this way. 

Kooker also noted that music is largely what is driving the trends and happenings on social media. The top Twitter, Facebook and Google Images trends and searches are all largely music driven. Nine of the top ten videos watched on YouTube are music related. Kooker noted that people want to be close to the music and the artists they love, and social media platforms have really created new opportunities for the industry to help facilitate that.

After years of sales decline, the industry is now seeing a leveling off in sales, according to Kooker. Physical sales account for around 40% of sales, with digital downloading accounting for an additional 40%. Streaming and other revenue models fill out the rest of the pie. Diversifying revenue streams involving access models (like streaming sites), social media, and foreign markets, opened by new technologies, are the industry’s fastest growing segment. YouTube has about 1 billion active monthly users. Half of them are listening to music. This exemplifies the new possibilities that the industry is just starting to explore and monetize. Kooker ended by noting the possibilities that automobile interactive dashboards are creating. He noted that they are essentially another platform unto themselves, with things like Sirius XM becoming a standard option for most manufacturers.

Global Marketing in a Social Media Driven Environment

Daft Punk’s Story

John Fleckenstein then took over, pulling back the curtain on the global nature of Sony Music’s network of partners. Opening with the story of Daft Punk’s release of the album Random Access Memories and their hit single “Get Lucky”, Fleckenstein described the exciting challenges of marketing the album.

The Parisian duo invited Fleckenstein and a colleague to the Paris studio where they had been working on the album. The duo envisioned their work as encapsulating our collective memory of the 1970s. Their vision for what its release should be was that of Close Encounters of the Third Kind. They wanted the release to echo the feel of Spielberg’s famous film, where everyone is inexplicably drawn to the mountaintop and then revelation happens all at once. They chose a major label specifically because its global network of affiliates and relationships could pull it off in a way that an internet release alone could not.

Sony’s challenge was that as robots (the duo’s stage characters) Sony couldn’t leverage social media the way they might normally. So in response to the challenge, Sony started a major global billboard campaign in major cities that led to image sharing on social media. A TV spot was created that premiered at the Coachella music festival. Sony arranged for a total blackout that was kept tight under wraps. It appeared to most as if there had been a major power outage. Then the screen came on showing the trailer for “Get Lucky”. Fans were quick to record with their smartphones and send out through YouTube. That was followed up with ad buys for the same spot during Saturday Night Live that further kept the hype building.

The release culminated in the tiny town of Wee Waa Australia, pop. 800. The location alone was its own source of mystery and brought media from around the globe for a successful release date that made a splash on Pitchfork and Wired among many other music news sites.

The result of Sony’s well-coordinated efforts was the biggest streaming event to-date.

Miguel’s Story

R&B artist Miguel was the next featured story. As Fleckenstein told it, when they first met Miguel, his unique style and personality demonstrated that he didn’t fit the typical R&B mold. He had a creative vision that was different, and the studio took time to cultivate and work with him to help bring his vision of what his art was to life. An artist in the mold of Prince was the guiding star that Miguel and the studios realized was true to their vision. From there, Sony RCA worked with their network of creators, artists, producers and other talent to help bring that vision to life. They introduced Miguel to a creative team that more closely matched his own artistic vision, different from what he previously had been exposed to.

RCA’s network of powerhouse artists, including Justin Timberlake and Alicia Keys, helped use their own connections and audience draw to highlight Miguel’s rising talent. Justin took time out of a Sirius XM appearance to talk about Miguel, and Miguel joined Alicia Keys on tour.  The RCA family pulled together to help give a new artist exposure he might not have been able to get without such an extensive network at the same stage in his career.

The Kings of Leon Story

The story of RCA’s talent coming together around one of their own transitioned into the story of the Kings of Leon. A band that started as a duo, they never found the success in the US that the band and the label envisioned. But fortunately, their UK affiliate found that their music hit the right chord with their audience. The band’s music and image had the romantic vision of what many in the UK envision America to be like, and a romance was born. The band was such a success in the UK that it was hard to get them to do anything in the U.S.  joked Fleckenstein. Their newest album Mechanical Bull is due out in September. The first single released off of it “Super Soaker”, released this week. The advantage that Kings of Leon found with a major label was that “it afforded them a career.” said Fleckenstein. Without a global network that was able to find a home for the band and their artistic vision, exactly as they saw themselves, they might not have been able to sustain a full-time music career.

Justin Timberlake’s Story

Fleckenstein closed his talk with the story of Justin Timberlake’s double album The 20/20 Experience, his first album in 7 years. In a singles driven market the studio decided that a full album release would get lost. They engaged in a highly coordinated marketing campaign that took full advantage of Justin’s large Twitter following. A mysterious tweet, a YouTube promo video with no explanation, and then the single “Take Back the Night” was released around the world with military precision two hours before Justin took the stage in London. The social media response exploded around the world in response.

The presentation concluded with a brief Q&A. The single overarching message that came out of the meeting however was that despite digital’s challenges for music and an ever larger volume of content, the majors are finding new areas of growth and new ways to leverage their global networks in service of their artists, creating value and helping them stand out in a sea of creative talent.