Member Since: 3/7/2011
Posts: 2,187
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Endorsement is a MAJOR income stream to some artists
http://www.techdirt.com/blog/casestu...ont-sell.shtml
Quote:
When Primary Wave took over Cee Lo’s management, shortly before the release of “The Lady Killer,” he still had a relatively low profile as a solo artist. But the company seized on the early viral success of “Forget You” to make Cee Lo a ubiquitous face.
His over-the-top performances at half a dozen award shows -- performing with the Jim Henson Company puppets at the Grammys, playing a piano that spun 360 degrees above the crowd at the Billboard awards -- proved highly successful. His television campaign for the year has also included “Saturday Night Live,” an appearance on the NBC comedy-drama “Parenthood” and his own talk show on the cable channel Fuse (“Talking to Strangers”).
Primary Wave also booked numerous commercial endorsements for Cee Lo, in traditional TV spots like a 7Up commercial that has been running since October, as well as a Web video series for Absolut Vodka and personal appearances for Duracell and Pretzel M&M’s.
And, no, this doesn't just mean complete selling out (I can already hear the critics...), but finding campaigns that match Cee Lo's personality. They note they've turned down a ton of deals that didn't fit.
Either way, it looks like Cee Lo is earning a ton of money from all of this: commercials, sponsorships, TV appearances and (of course) tons of live performances. The article notes that actual direct music sales are the smallest slice of the pie.
But the key point here is that these and many other opportunities are much more wide open to artists today, and it helps if their music is more widely known. That is, artists like Cee Lo, with the help of companies like Primal Wave, are recognizing that if you use the infinite goods -- such as the music -- to make the scarce goods (like Cee Lo himself or his endorsement) much more valuable, you can make a lot more money than ever before. And when you look at the overall market that way, you realize that there's lots more money to be made in the music industry today than ever before. The only part of the industry that's hurting is the part that was based on selling plastic discs, which has become obsolete. Everything else is booming.
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Basically, Cee Lo is making $20 million this year. Of that, maybe $1 mil is from recorded music. The rest is from endorsements, sponsorship, TV appearances and live performances.
Quote:
“How much do you make on five million singles?” Mr. Mestel asked. “It’s not $5 million. Apple takes a piece of it, the record company takes a piece of it, the producer takes a piece of it, and then Cee Lo gets a piece of it as the artist.”
A recording contract for an act like Cee Lo would typically offer a net royalty of about 15 percent, according to several music executives. That means that for a $1.29 download from iTunes, after Apple takes its standard 30 percent fee, the artist would be paid 13 or 14 cents; for five million downloads, that amounts to about $650,000. As one of five writers of the song, Cee Lo would also make about $45,000 in publishing royalties on those downloads.
That leaves him a long way from the $20 million he is estimated to make this year.
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An endorsement of a product could get you something like $2-3 mil easily each year. More if you're a Big Name.
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