Licensing Revenues on the Rise

iStock_000013428226XSmall-150x150.jpg

The sky is falling.  At least that’s what recent music industry reports would lead one to believe.  The first four weeks of 2011 saw the three lowest selling number one albums ever (Taylor Swift’s Speak Now – 52,000 copies, Cake’s Showroom of Compassion – 44,000 copies, and Amos Lee’s Mission Bell – 40,000 copies).  Pair those stats with the latest layoff spree at Universal Music Group and it’s easy to see why many feel like the horizon is looking rather bleak.  But amidst all of the ruble and dismay, there is one statistic to get excited about.

Artists and publishers are making more money than ever by licensing their music.  According to grabstats.com licensing revenue has climbed $100,000,000 every year since 2006 and is expected to continue to gain at the same rate in 2011.  Of course, these reports should be taken with the necessary amount of caution.  Will higher licensing revenues help artists sell as many albums as they used to?  No.  Will they rebuild the crumbling major label system?  Probably not.  But, licensing opportunities becoming more accessible and more lucrative will certainly come as a welcome reprieve for artists who have seen their former cash cow (album sales) slaughtered at the hands of Generation Y-Pay-For-Music-When-I-Can-Download-It-For-Free.

While singles and albums seem destined for file sharing purgatory, the commercial nature of advertising and promotion will ensure that licensing remains a viable moneymaker for songwriters, publishers, and artists.  After all, it seems rather disingenuous to try and convince people to buy your product when you’re stealing someone else’s.  More than ever we are seeing artists and their songs representing some of the world’s most iconic brands.  And while image-conscious artists used to be hesitant to align themselves with brands for fear of being labeled as too commercial, they are now doing so with gusto.  Ironically, the same fans that download their music for free are often the ones accusing their favorite artist of “selling out.”  Hip-hop star, Talib Kweli, along with Big Boi, Lupe Fiasco, and B.o.B, recently and unapologetically licensed his music for the latest Pepsi campaign.

"There's a generation growing up that doesn't understand that music is paid, but just because you get it for free doesn't mean that someone's not paying for it," he says. "Someone's still got to pay for it. So you've got to figure, 'Well, how is this person going to pay for it?' You've got to maybe loosen your idea of what selling out is, when you're not participating in supporting the culture."

We at Affix could not agree with Kweli more and we are proud to support the culture of Urban Music by helping artists realize the potential of licensing their music.  We are excited to take part in shaping the new music business landscape and we are determined to focus on the positive opportunities it provides.