Music PROs moot minimum fee following collapse in revenue from labels

A group of high-profile music agency figures are understood to have discussed setting a minimum price for their services to compensate for lost record-label fees.

Live act: Florence Welch and The Horrors at the NME Awards (Press Association)
Live act: Florence Welch and The Horrors at the NME Awards (Press Association)

A number of agency sources have revealed that leading PROs met last week to set a price and ensure they would not undercut each other.

The news comes as Darling Department makes its four-strong PR team redundant as it struggles with declining fees (see story below).

One London-based music agency insider who declined to be named said: 'It was really early preliminary discussions and nothing has been presented to record labels yet. There is another meeting coming up.'

The move reflects wider concerns about cuts to PR fees. Agencies report that clients are increasingly clamping down on costs by using financially focused procurement departments and methods such as 'reverse auctions' for new-business requests.

Record-label income has been hit by the rise of digital services such as Spotify and illegal file-sharing websites. While labels have responded with cash-generating ideas such as the '360 model' to set up single deals encompassing recordings, merchandising, live events and publishing, the industry is still fighting against dwindling revenues.

One music label insider said agencies were 'really suffering' as a result of labels looking for short-term solutions to cash concerns.

'Normally an agency would expect to be retained for a whole album campaign, but when one release date was put back, the agency's retainer was taken away until the album was launched. The label didn't want to pay them for that interim period,' he said.

The answer for many agencies is to diversify from recorded output. LD Communications CEO Bernard Doherty, whose agency devotes only 30 per cent of its business to promoting new releases, said focusing on artists was 'foolhardy' when live music is more lucrative. LD has recently promoted the NME Awards and the Download festival.

Others have criticised the industry for clinging to a model where press, publicity and online activity are handled by different agencies. Shoshanna Stone, head of The Outside Organisation's music division Outside Edge, said: 'The industry (can't afford) to pay for separate services.'

How I see it

Bernard Doherty, CEO, LD Communications

If you want to embrace music PR you have to be prepared to understand that fees in music are smaller than those in brands. Fees were never going anywhere but down because of the nature of the recorded music industry.

Richard Dawes, Co-founder, DawBell

Some have been diversifying, but not many. The opportunity is there for the taking. Brands specifically are constantly looking for a music solution. We've diversified into brands, talent management, events and European media consultancy. Music PR opens doors to all kinds of opportunities, we're finding.

In numbers

5.6% Fall in sales of digital and physical albums in the UK in the past year*

113m Number of digital and physical albums sold in the UK last year*

163m Industry peak in digital and physical album sales in the UK in 2004*

28% Internet users who regularly access unlicensed online music services**

Source: *BPI; **IFPI/Nielsen

Darling Department bids farewell to PR consultants

Music agency Darling Department has made its four-strong PR team redundant. The company's director said working in publicity 'feels increasingly dispiriting'.

The agency, which has worked on acts such as Lady Gaga and The Killers, will stop providing PR services from 1 April after almost 20 years as a press, radio and online publicity department.

Darling Department director Ed Cartwright said: 'Running an independent music PR company, in a landscape of declining fees and circulations, feels increasingly dispiriting. It's with great sadness that we're parting company with our talented and experienced PR and promotions team and we're sure they'll continue to thrive in their chosen paths.'

The agency will now focus on artist management and music consultancy. PR consultants Leo Walton, Leo Greenslade, Naomi Williams and Laura Coulson are individually leaving to continue providing services elsewhere, taking many of Darling's acts with them.

Adrian Read, who works for Lady Gaga, left Darling in January to form his own agency, Inside/Out. Read set it up with Chloe Melick, most recently head of publicity at Sony RCA as well as publicist for Jessie J and Kate Nash.

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