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Warner Music Group forms brand marketing venture with 50 Cent's manager

We all know that changes are afoot in the music industry, for both record labels and musicians. As the market for physical records becomes less and less lucrative, labels are forced to look outside their bread and butter to generate revenue. And according to an article in yesterday's Wall Street Journal, the future of a label's solvency may have much less to do with marketing music and more to do with branding the musician. WSJ points to a new venture formed by mondo music conglomerate Warner Music Group and über-manager Chris Lighty (pictured), the CEO of Violator Management (home to 50 Cent, LL Cool J, Busta Rhymes, Diddy and Missy Elliott, among others).
The venture, called Brand Asset Group, aims to involve Warner Music Group in major revenue streams like merchandise sales and endorsement deals, areas previously maintained by performing artists themselves without much interference by labels. The rationale, according to the WSJ, is that "Labels have spent millions marketing artists and building their brands, but have benefited from only one dwindling revenue stream." Assumedly, entities like Brand Asset Group would engage both artist and label in securing ever more substantial branding, and each party involved would receive a cut of the profits.
At least in the case of Brand Asset Group, there is no necessary relationship between client and label roster outside of the contract - for instance, Brand Asset Group's first endorsement deal pairs General Motors' Pontiac with rapper 50 Cent, who records for Warner's rival music industry empire, Universal. As for the specifics of the deal, the WSJ says 50's own involvement is "expected to be broad -- with 50 Cent possibly having input into the design of the car maker's Pontiac G6 GXP Street edition and likely featuring the car in places such as music videos and the CD booklet for an album he is slated to release late this summer."
If ventures like this grow in prevalence, it may mean that record labels shift their focus significantly from sales to marketing in order to resuscitate their profits. It could also mean that artists are ever less economically empowered as they give up more of their formerly tried-and-true revenue streams. One thing is for sure if this trend catches on: in the future of the record industry, music itself will matter less and less. Will Brand Asset Group be the first in a line of similar ventures? Only time, and profit, will tell.
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50 Cent
Brand Asset Group
Chris Lighty
Warner Music

I was actually talking about this tonight with my friend Derek. It seems like more than ever there are more and more giant corporations getting involved with music yet album sales continue to decline. On the other hand band's seem to be making their money off shows. I definitely believe labels will try to get a piece of these other revenue streams whether it's from concert sales or partnerships with big corporations that want a hip image.

Dave Park

You guys catch Fiddy's new Vitamin Water commercial? The General is the ultimate businessman!

Yung Daba

I'm waiting to see how record label muscle is gonna help an artist as big as 50 make more money through endorsement deals than he did before...if you're already working with Vitamin Water, you've hit the top. It'll be interesting to see if smaller labels that weren't making a shit-ton of money through album sales in the first place are gonna go for this model, too.

Etan Rosenbloom

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