Thursday, November 8, 2012

Yamaha launches music label to build its brand

Jaquetta White/The Tennessean

Twenty miles from Music Row, in quaint downtown Franklin, music instrument manufacturer Yamaha Corp. is experimenting with a new business model.

No longer content with artists merely strumming and striking the guitars and pianos it produces, the Japanese company now wants them signed to its startup record label: Yamaha Entertainment Group.

The label, launched this fall, is betting that it can break acts by trading on Yamaha’s established name in the music business and, in turn, use those acts to improve Yamaha’s visibility and customer base, said Chris Gero, the label’s president.

“People just see us as a piano manufacturer, a products manufacturer,” Gero said. “But we have all these artists signed as endorsees. The opportunity just naturally started to show itself. We’ve become much more directly engaged with an artist’s life and livelihood.”

Artists including Elton John, Michael McDonald and John Legend are among those that endorse Yamaha by playing the brand’s instruments in shows.

Yamaha Entertainment Group is the latest independent label to sprout from the ruins of a beleaguered music industry. The Franklin-based imprint also joins a small but growing number of corporations attempting to diversify and grow by launching record labels.

Yamaha Entertainment Group has effectively replaced Yamaha Corporate Artist Affairs, the office that has overseen the manufacturer’s branding operation from Franklin for eight years. It was Corporate Artist Affairs’ job to get Yamaha products in the hands of artists and, by extension, in front of as many eyeballs as possible. It’s not by happenstance, for instance, that the Yamaha name is on prominent display whenever Elton John, a longtime endorser, takes to the keys on stage.

“We think through where the brand will be placed and seen,” Gero said. “We do it very strategically.”

The record label will serve as an extension of that effort. Ultimately, the label’s purpose is to position Yamaha to be as well-known a brand as, say, Coca-Cola or McDonald’s in the minds of consumers, Gero said.

But Gero said the label also is hoping to be an advocate for independent artists struggling to gain a toehold in a music world still working to restructure itself as the digital age redefines how people find, listen to and buy music.

“Because of technology, there’s never been an easier time in history to be heard,” Gero said. “Yet there’s an amazing inability to be heard because technology has taken the profitability out of this business.”

The boutique label will record, produce, publish, license, market, publicize and sell audio and video content for its artists. Alternative Distribution Alliance will distribute the company’s records.

‘I’m not looking for a big hit’

British rock band Leogun is the first act to sign to the label. The band released a five-single EP last month. Two other acts have been signed and are working on projects, Gero said.

The label does not focus on any particular genre and will release about five records each year, Gero said. The imprint will keep overhead costs low by employing just seven people and working with a team of about 30 independent consultants, Gero said. Yamaha also has built a recording studio in Franklin where it will record all of the artists it signs, using as much Yamaha equipment as possible to keep recording and production costs low.

“I’m not looking for a big hit,” Gero said. “I would rather have very small success than very large failures. But I hope we chart records. I hope people are talking about it.”

In today’s music world, Yamaha’s plan appears well within the realm of possibility. Consider the most recent Billboard charts. This week marked the sixth consecutive week that an independent music label claimed the No. 1 album on the Billboard 200 chart, which ranks the top-selling albums across all genres.

Mumford and Sons, signed to Glassnote Records, spent three weeks in the top spot before being bumped off by Broken Bow Records’ Jason Aldean, who was supplanted by Taylor Swift of Big Machine Label Group.

“This is a golden age for independent labels,” said Rich Bengloff, president of the American Association for Independent Music. “The model has become sustainable because the cost of entry has come down.”

Independent labels have come to fill a void in the music industry, giving small and mid-level acts a shot as major labels either back away from taking them on or offer what some consider unfavorable deals. The rise of the digital music distribution, which has all but eliminated the bottleneck of record store distribution, has allowed such labels to thrive.

A way to connect

Yamaha, a corporate brand turned independent label, is a variation on the trend. But, odd as it may seem, the company is hardly alone in diversifying its business model to include a record label. Firms with much more tenuous links to the music world have been adding record labels for the better part of the past decade.

The American Association for Independent Music, for instance, counts Red Bull Records, a company created by the energy drink manufacturer, as a member. Beverage maker Mountain Dew, meanwhile, has a label called Green Label Sound.

“The branding of artists with cool companies is a very cool thing,” Bengloff said. “To me there seems like a natural synergy.”

Brands have launched labels as a way to connect with fans and to gain more.

“Any company that has a focused market segment can become a music label,” Belmont music business professor David Herrera said. “The age, lifestyle and tastes affect what we buy, so any product that has a defined audience can also sell music directly, bypassing the label.”

Yamaha is a perfect addition to the group because the company has an established distribution system for music products, said Herrera, who teaches in the university’s Mike Curb College of Entertainment & Music Business.

“Yamaha has direct access to consumers of music, so the label fit is tremendous but focused,” Herrera said.

Still, such labels aren’t guaranteed success. In 2010 Proctor & Gamble created a hip-hop record label under its TAG body spray brand in a joint venture with Island Def Jam Music Group. It collapsed in less than a year.

Gero acknowledged that the company faces an uphill battle.

“It is very, very challenging,” Gero said. “We are learning as we go the things that work and the things that don’t.”

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