why advertising will win

My reasoning on why recorded music will mainly be sponsored by advertising in the future is that advertising by definition always makes the most money.

CDs and downloads are products which can be associated with plays just like any other product. When you hear a song on the radio and end up buying the CD because you like the song, the song is acting as a promotion for the CD.

But what if other products can have higher returns on that play? What if you can sell ten pairs of jeans for $100 profit instead of ten CDs for $50 profit? The musician who made the song will cut a deal with the jeans vendor instead of the CD vendor, obviously.

Maybe you get a one-song CD in the bag with every pair of jeans. It might be that the rock star wears a patch with the jeans brand on their jeans jacket. It might be that the jeans vendor gets a banner behind the stage at live shows. Or it might be a plain old ad-sponsored stream on a web site.

Which one of these methods you pick doesn’t matter – how the song and product are hooked together isn’t relevant to the basic argument. The argument is that

  1. The business of recording is about using recordings to move products.
  2. The most profitable products will always be able to pay musicians the most for their works.
  3. Advertising” is the word for this kind of relationship between recordings and products.

From this perspective selling CDs based on an affiliation with a song is still advertising in the sense that the product is the CD and the advertiser is the CD vendor. CD sales don’t have to go away for this point of view to be an accurate prediction of how the recording business will shake out. But CD sales do have to become an option rather than a necessity.

For example, a pop star might record a new song specifically for a marketing campaign for a new product. BMW comes out with a new model, and Barbra Streisand comes out with a new recording to be somehow associated with the car. Maybe you can only get a CD at dealerships or can only download a copy at BMW’s web site. The download is free on the site, the CD is free at the dealership. But the car isn’t free. If BMW can make more by converting Barbra’s song into into car sales than EMI can make by converting her song into CD sales, BMW can pay Barbra more, and she will move from EMI to BMW.

What it means for advertising to “win” over unit sales (in the form of downloads and CDs) is for the product associated with a recording to become flexible. The product associated with a recording should be whatever product is the most profitable. There’s nothing intrinsically CD-ish about a song. Sometimes the product should be a CD, but sometimes not.