Chapter 14 Music Business Handbook and Career Guide, 10th Ed. © 2013 Sherwood Publishing Partners.

Chapter 14

Music Business Handbook and Career Guide, 10th Ed. © 2013 Sherwood Publishing Partners

Record Label Promotion and Distribution

Chapter Fourteen

Start Thinking . . .

1. How is a new album release marketed to the general public?

2. What are the various avenues for distribution of recorded music?


Chapter Goals

• Learn the importance of creating a marketing plan for merchandising a new record release.

• Gain understanding of record promotion techniques.

• Become knowledgeable about record distribution.

• Examine the role of NARM—how it serves its members and the music industry.


The Marketing Plan

• SWOT strengths weaknesses opportunities threats

• The concept focus on the target market come up with a hook

• The marketing team


The Elements of a Marketing PlanThe Strategy

• Convince a target audience to buy

• Can contain promotions publicity paid advertising

• Once strategy is decided, cover art, promotional material, copy, and graphic elements are created


The Elements of a Marketing PlanRadio Promotion

• Restricted airplay

• In-house and independent promoters

• Reporting stations

• Promotion to program directors

• Mailings, telephone follow-ups

• Payola


The Elements of a Marketing PlanBeyond Terrestrial Radio

• Satellite radio

• Digital music channels

• Internet radio

• Dance clubs


The Elements of a Marketing PlanPublicity

• Publicity campaign creates a buzz to get news about a record release published

• Interviews

• Satellite tours

• Traditional media

• Dailies and weeklies

• Fanzines

• Internet sites


The Elements of a Marketing PlanAdvertising

• Paid advertising yields controlled impressions

• Label advertising

• Cooperative advertising

• Trade advertising pull-through push-through


The Elements of a Marketing PlanDigital Marketing

• Multi-prong approach promotion + publicity + advertisingo press release to websiteso place content in digital mediao buy digital media ads

• Marketing integration

• Interactive digital media


The Elements of a Marketing PlanDigital Marketing

Selecting Digital Marketing Opportunities

E-mail lists assembled by label Video websites

E-mail lists assembled by the artist Online music stores

Label websites Social websites

Artist websites Search engine marketing

Third-party websites Cellular phones

Blogs Virtual worlds


The Elements of a Marketing PlanInternational Promotion

• Labels may spend more money and effort promoting abroad patchwork of territories require individualized and costly attention

• Timing of foreign releases

• Foreign promotions through staffed affiliates

• Strongest foreign markets: Netherlands, UK, Germany, Japan, Australia, France


Record DistributionDigital Distribution

• Online music is a key channel for legitimate distribution

• Non-physical formats made up one third of U.S. recorded music revenue by 2011 Larger “slice of pie” than physical product Unbundled music purchases a drawback for labels

• Traditional brick-and-mortar retailers now offering online services to complement storefronts


Record DistributionPhysical Distribution

• Manufacturing, shipping, and managing inventory are still expensive for labels manufacturing on-demand

• Distribution and wholesaling challenging money tied up in inventory slim profit margins thousands of SKUs


Record DistributionTypes of Distributors

• Majors

• Independents

• One-stops

• Rack jobbers


Record Distribution

[Insert Figure 14.1]


Record DistributionRetail Merchandising

• From the distributor or label warehouse, the physical goods arrive at retailers

• Retail competition is bruising

• Market share versus profit margins

• Categories of retailers shifted over the years


Record DistributionMass Merchant Chain Stores

• Mass merchants gained enough clout to dictate prices demand changes to the music itself

• Major labels sell direct to mass merchants

• Exclusive CD retailing deals by artists

• Coffee chain tie-ups


Record DistributionEntertainment Retailers

• Record retail brands disappearing

• Replaced by entertainment software chains DVD, game, and music product

• To survive, traditional record-only stores must be well managed and situated where retail rents are cheap stock music of the community


Record DistributionCutouts and Repackaging

• Cutouts deeply discounted music excess CDs and oldies with low or no royalties

• “Rereleases” and “new” releases big name hits genre compilations


Record DistributionRetail Terms and Inducements

• Generous returns policies all accounts must be given the same discounts

• Eye-catching placement impulse purchasing price and positioning end caps POP displays “clean” CDs

• MAP policiesMusic Business Handbook and Career Guide, 10th Ed.

© 2013 Sherwood Publishing Partners

Record DistributionNational Association of Recording Merchandisers

• NARM represents recorded music distribution industry

• Key activities lobbying local, state, and federal authorities on legislative

matters providing myriad information resources to members


For Further Thought . . .

1. What is SWOT?

2. What are the benefits and disadvantages of selling physical CDs versus downloads or streams? Which party is helped or hurt most: artists, labels, distributors, retailers, or consumers?


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Chapter 14 Music Business Handbook and Career Guide, 10th Ed. © 2013 Sherwood Publishing Partners.

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