If you’re anything at all like me, you might have once wondered why it is that record labels keep reporting multi million pound losses year after year, but we still see ridiculously pretentious music videos, which quite clearly are costing them a fortune. Product placement advertising will obviously fund some of the shiny toys, but it’s surprising at how low a percentage of product mentions and video features are actually paid product placement, particularly in hip hop music which is renowned for its name dropping.
Damon Dash of Roc-a-Fella Records (Jay Z’s label) said in an MTV interview
“We only rap about things we like. I’ll mention Cheetos because I like them, but if I didn’t they wouldn’t be in our songs,”.
His argument is that music fans are savvier nowadays and are sensitive to any false endorsement. Damon also goes on to talk about how most musicians like Jay Z only name drop brands that the record label or artist owns, which seems like a pretty smart idea to me.
How much money do record labels waste on music videos?
Unfortunately it’s pretty complicated to work out the return on investment for a music video as there are very few ways that you can track revenue generated from fans seeing a music video, but when you consider that artists like Jack Johnson, The Beastie Boys, Madonna, Lil Wayne and Coldplay have all had breakthrough single success from music videos that cost less than £10,000 to produce, it makes you wonder why record labels aren’t cutting the typical music video budget allocations much below the £100,000 mark.
Now, I love seeing the latest Lamborghini Murcielago or a beautiful coastal view condo in a music video, but from a business perspective it’s ridiculously unnecessary and I find it difficult to understand how it is justified when record labels are losing so much of their shareholders money. I think it’s fair to say that music videos have become noticeably cheaper over the past few years, but it’s inevitable that soon we will see record labels significantly cutting back music video budgets and adopting a more creative and cost effective solution to flashy rock star lifestyle videos.