I read the recent Brand Republic article on e-auctions and considered how it applied to music purchasing.
Whilst I appreciate why Clients might use e-auctions to buy goods & professional services, I have some sympathy with those who argue this doesn’t work for subjective IP assets (like existing music tracks). Putting, for example, Elbow up against Noel Gallagher isn’t comparing like with like. In addition, for every sound recording & song, the owners of that IP have a monopoly on the ability to grant licences. You can only “buy” Elbow from Universal (recordings) and Warner Chappell (songs).
So, whilst to some extent bespoke music (from music production companies) can be commoditised, I don’t think the same applies to existing well-known (licensed) tracks. The emotional resonance that each track & artist has with a particular audience will always be unique. In addition, the cost drivers for licensed music are many, varied and often irrational. Quotes will vary depending on the subjective opinion of music rights owners and artist managers concerning the “coolness” of the brand wishing to use their music. There’s one price for Nike and another for Andrex – to use the same track. Of course some rational factors apply (namely usage – Term, Territory, Media) but individual perception of artist stature and even which staff member handles the licence request will alter the pricing of a particular music track.
I’m not trying to argue for the dark side here… However, due to the idiosyncrasies of fragmented music rights, automated procurement is unlikely to work – at least in the near future. Of course, I would still always recommend the use of “human” competitive tendering for brokering synchronisation licence deals wherever possible, but I don’t believe that actually commoditizes the tracks. It just sets a benchmark for terms & fees for which the rights owners will either agree or not. In this context, personal relationships and a history of past deals significantly affect whether rights owners will offer preferential rates when faced with stiff competition. Whether the music industry catches up with other supply chain sectors willing to engage with e-auctions remains to be seen. For famous tracks by house-hold name artists, I wouldn’t bet on it!
ICP guest blogger Richard Kerstein is owner of Resilient Music - specialists in music procurement strategy for marketing communications including ATL, Digital, Experiential, In-store, Branded Content and Mobile. Richard's goal is to empower brands to take greater direct control of music sourcing and purchasing, thereby improving cost and risk management. This objective supports brands who wish to decouple production, or elements thereof, from their agencies.