SonyBMG: When Great Things Come Together
In the infancy of one of the most significant mergers in the music industry's history, SonyBMG lets us listen to the syncopation of direct marketing and retail, classic artists and modern technology, corporate giants and you.
Jul 1, 2005
It's Tuesday, which means "report card day" at SonyBMG headquarters in New York City. Joe DiMuro, executive vice president and general manager of the company's Strategic Marketing Group, is in a particularly good mood as he squeezes in a morning interview amid media reports, direct response television (DRTV) campaign analytics and his weekly product management and marketing scheduling meeting.
So far, it's a grade "A" day at the office. "It's a little stressful at times but we're having a good week, and we're having a good month, so we're happy about that," DiMuro says. But his gladsome tone might also have something to do with today being his — and his four-year-old son's — birthday.
SonyBMG aired an infomercial-like special on NBC last Thanksgiving featuring "Elvis by the Presleys," an homage to the "king of rock" by members of his family.
DiMuro, now 41, says today is business as usual on Madison Ave. His son Julian gets the birthdays now. Last weekend they celebrated with a zoo party in Central Park, which was fine with DiMuro since he feels he's had plenty of birthdays already.
Though DiMuro makes personal jabs here and there about "getting up there" and his mounting forgetfulness, a 41st birthday hardly reflects the image of a grizzled industry veteran, but DiMuro has a wealth of experience working in entertainment marketing that spans nearly 20 years. He started in sales and marketing when he was 22 years old and hiked the executive hierarchy by managing successful campaigns for home entertainment and music giants such as 20th Century Fox, Play Station, Nintendo, RCA Records, BMG and now SonyBMG.
Combined Efforts DiMuro's Strategic Marketing Group, which is composed of commercial master film and TV licensing, strategic business development, direct response television, new product development, joint ventures and Elvis Presley content management, collaborates with the Sony Music and BMG labels in creative product development and joint marketing projects.
"We take the entire SonyBMG portfolio, and I work with all the TV and film supervisors and all the commercial advertising agencies to find ways to propagate our content, license our repertoire, license our masters, and as a revenue generating unit, I have a team of individuals in L.A. and a team of individuals here in New York who work with me in making sure that we're getting our fair share of money as well as licenses that can be done for our content," DiMuro explains.
Products like this Nickelodeon-branded compilation are part of SonyBMG's new product development plans.
New product development, which includes major product lines, such as Elvis Presley
, Nick Records and all the Nickelodeon TV properties, manages all direct response initiatives, including "Now" "Totally Hits" and all frontline, multi-artist compilation projects, as well as third-party imprint deals. The group collaborates on projects with Mattel, DIC Entertainment and a variety of other propositions. New product development produces and solicits approximately 35-40 new titles annually.
Prior to the Sony Music/BMG merger in December 2003, DiMuro handled BMG's catalog management, catalog marketing, DRTV packages and custom retail packages, which were compiled and produced for special retail distribution partnerships with retail chains like Gap, Banana Republic and Starbucks. He also spearheaded the digital licensing group that opened Apple iTunes, Napster, Real Rhapsody and Music Match, which provided digital and then mobile platforms to sell BMG products.
On Sony's side, Tim Pearson managed DR efforts as the vice president of Sony Music Direct. Pearson was brought into Sony six years prior to the merger to develop a direct response unit and increase sales across the company. Sony Music Direct looked at successful models of how other entertainment companies, such as Time-Life, used direct response then culled internal assets and built the division primarily around short-form spots to target demographics and boost retail. When Sony locked arms with BMG, Pearson joined the DR division of DiMuro's SonyBMG Strategic Marketing Group as senior vice president.
The division is set up to be a full-service DR company with internal producers who can physically create spots, but it works with several nonaffiliated production companies as well. Pearson plays a part in developing all spots, even if it's a limited role determining the message and general content.
SonyBMG then contracts outside media agencies to have them create media plans and purchase airtime. Its primary media agency is the West Chester, Pa. office of Cmedia. After Pearson and DiMuro review the plans, they send the spots to North Country Media Group (NCMG) Inc. a Great Falls, Mont.-based video customization and duplication company that manages all dubbing. And when the spots air, call centers West and Convergys handle the spikes.
"It's a much, much stronger company," DiMuro says of the company post-merger. "There's no question that the scale of the company has significantly increased. Look at the resources of all the talent."
Bertelsmanns BMG Direct to Take Over Columbia House
Catalogs combined, SonyBMG houses one of the largest collections of contemporary and classic music icons. The artists range from Beyonce Knowles, Britney Spears and Usher to Outkast, AC/DC and Johnny Cash. SonyBMG owns a treasure trove of 20 music labels, including RCA, Arista, Epic and Columbia. "There isn't a genre of music that we don't touch," DiMuro boasts. "There isn't a genre of music that we're probably not No.1 or No. 2 in terms of market share. And the depth of the catalog between Columbia and RCA in terms of the legacy is monumental. So clearly, we're a better company in terms of its scale, its strength and its depth of repertoire."
Long Live the King
Speaking of size, one of the artists lugged into the merger had so much content, he was designated a separate division within the Strategic Marketing Group — simply titled Elvis Content Management
DiMuro's most successful and lucrative DRTV project was for an Elvis Presley greatest hits compilation. In 2001, he worked as vice president of product development at RCA before his promotion to BMG North America as senior vice president of strategic business development. He knew the 25th anniversary of Presley's death was approaching, so he organized a task force team and led the way as project manager to create a compilation that paid tribute to the "King" while also invigorating his persona with an air of modernity and sex appeal.
"The focus was creating the singular greatest compilation album that had ever been done on Elvis. It became 'ELV1S 30 #1 Hits (E1),'" he says. "One of the focuses I had for the group was that we really needed to resuscitate the brand imagery of Elvis Presley, and there are a variety of ways to do that. I contracted several outside agencies that worked on packaging design and logo iteration for E1. We worked on different visual images that would be utilized in the positioning of the campaign. All of our outdoor, all of marketing communications, all of our TV spots, all of our creative was created with a consistent look that was all about a very hip, irreverent, contemporary looking Elvis Presley. "
DiMuro estimates that at least 80 percent of the marketing was direct response. They built the campaign in July 2001 and released the record in September. Since the project moved at warp speed compared to most ad campaigns, direct response played a major role in educating consumers about the new Presley release and why they should care.
DiMuro's marketing team organized a campaign with Nike to license a track and create a remix. It was included on the album and went on to become a No. 1 single, which became one of the main driving components for the album's sales.
It also created a network special on NBC that aired on Thanksgiving. It was an homage to Presley that featured music legends including Steven Tyler of Aerosmith, U2 frontman Bono, Bruce Springsteen and Sheryl Crow. The TV special and collaborative marketing efforts reflected an uncanny resemblance to an infomercial production, and DiMuro says it was no coincidence.
"There's no question about it. Everything that we did was sort of around the concerted effort of selling Elvis as this worldwide icon," DiMuro says. "And everything was supplemental; the TV, the direct response TV, the print, the outdoor, the billboard work that we did, the network special all had the consistency, and imagery and the messaging. No question about it."
SonyBMG uses traditional DRTV in a holistic effort to create awareness, sell products direct and, mainly, drive retail. In fact, retail sales will often dictate the media buying of a DRTV campaign.
"We execute strategies that (SonyBMG) develops relative to using direct response television to basically set up a successful retail launch," says Dave Savage, executive vice president, Cmedia. "So we'll start buying media targeted to whatever the album may be. It goes anywhere from three to four weeks in advance and then the street date happens, and we buy more after it hits the stores. If it's doing well in stores, they may increase the budget."
Pearson adds, "Retailers view direct response as an awareness vehicle to help support their sales and the awareness of product. In many cases — with older artists or skewing demos — they'll look for the details of a direct response campaign and how visible it's going to be so they'll know how much product to buy. And that's a substantial change from six years ago when our sales people weren't quite sure what our retailers would think. Some retailers understood it and understood the benefits. Others were vehemently opposed. Now, I think across the board everyone understands, at least in the entertainment space, that it's a good marketing vehicle to launch artists."
DRTV ads are on-air for current releases including: the new Bruce Springsteen CD, "Devils & Dust"; Il Divo (a new four-male vocalist classical crossover band started by "American Idol's" Simon Cowell); and a two-CD Barry Manilow "essentials" collection. SonyBMG is also running spots for DVD sets, such as the AC/DC two-DVD set of their greatest videos. Most of the DRTV products are marketed toward older consumers who watch more television than they listen to the radio.
"For them to find out about new CDs we really need to put it in front of them, and the goal of the DRTV is to make people aware, for example, that there's a new Bruce Springsteen CD out, or there's a new Barbara Streisand CD coming out," Pearson says.
To reach these demographics, Pearson will run spots on networks such as Lifetime, SoapNet, TLC and Nickelodeon's Nick-at-Nite. Depending on the project, Pearson will run spots on as few as one or two networks. But with more popular artists, such as Springsteen or Il Divo, the spots will air on 15 to 20 different cable networks.
Elvis Sightings To this day, Presley fans still swear the King is alive. Some believe he lives in Graceland; others see him at their local mall. If these assumptions were based on the amount of new Presley material continuously released on CD and DVD maybe they wouldn't be so farfetched.
Aside from DiMuro's initial Presley compilation at RCA records, he helped create "Love Elvis," a special Valentine's Day DRTV special and "Elvis by the Presley's," a soundtrack to the CBS network special SonyBMG co-produced and aired in May. He ran a three-week campaign with three different spots promoting the CD and DVD package offer.
Although no definite plans are set, Pearson and DiMuro are discussing prospects for creating an infomercial sometime next year. A possibility is a half-hour show hosted by someone in the Presley family and offering a unit catalog box set. It could include some unique, high-ticketed item — either audio or audiovisual — that would not be available at retail.
"I've done a 50-CD box set on Elvis," says DiMuro. "That could be a $500 ticket that could only reside vis-E0-vis the infomercial and then when we bring it to retail maybe we could break that down a bit, mark it down, cut it down and maybe come up with four or five different packages."
Pearson agrees that Presley would be a likely candidate for an infomercial project but says that other artists with a large enough catalog of material might also be considered. "I think we're early in the process. I think we'll get a project done," Pearson says. "I don't think that we're going to produce an infomercial or multiple infomercials just to be in that space. I think the goal is if we have the right product and the right project, then go from there and find the best way to sell it."