In the wake of the music industry's plummeting sales, it's easy to lose sight of the fact that record labels sometimes have marketing goals outside of licensing every conceivable asset they own. To maximize revenue, labels and managers are on the lookout for brand partnerships with potential to evolve beyond licensing deals to take into account an artist's interests. These partnerships can result in all new songs and music videos, meaning meatier creative opportunities for bands, labels, production companies and agencies.

One example of a record company that has adapted an agency-style model is independent Australian label Modular Recordings. Aside from its recording business, the label runs its own merchandising and touring divisions, and a brand consultancy called Modular Ideas, which operates as a youth marketing agency for brands such as Puma, Nike, Becks, BMW, Lee Jeans, Wrangler Jeans, Virgin Mobile, Sony Ericsson and Heineken.

Earlier this year, BMW approached the label to license The Presets' electro banger hit, "Are You the One?" for TV and online ads launching its 1 Series in Australia. Rather than take the money and run, the label convinced BMW to commission an original remix of the track by French producer Lifelike in line with the band's current sound, that would launch via the campaign.

"One of our concerns with BMW was it was all happening just before The Presets released their sophomore album," says Axel Moline, creative director at Modular Ideas. "Even though 'Are You the One?' is the most obvious, no-brainer synch deal to do for BMW 1 Series, we wanted to do it in a way that wouldn't negatively affect the album."

BMW liked the idea and positioned itself as the launch pad for the original song, while Modular got a free marketing tool and new song for its catalogue, from which it can collect royalties. The Presets and their fans got a track that sonically bridged a gap between their first and second albums, and music bloggers got a free track to distribute.

To further promote the remix, Moline convinced the automaker to finance a music video directed by frequent Presets collaborator Jonathan Zawada and produced by Sydney's Collider Films. The 3D-animated promo stars a fleet of unbranded cars hurtling through a candy-colored intergalactic landscape. Interestingly, BMW was concerned the treatment over-emphasized its product.

"BMW were amazingly open to allowing us to create whatever we wanted, and for us it was important that the clip was of a quality so that it could be viewed as a legitimate piece of the Modular video catalogue," says Moline. "The overarching concept for the clip was simply to focus in on the question 'Are You the One?' So after some explaining BMW realized that thousands of cars were actually what we wanted to use to maintain credibility for the clip."

An agency veteran, Moline previously had a stint at Sydney-based youth marketing shop Spin before going freelance and joining the label. As Modular Ideas' creative director, it's his job to maintain the label's indie aesthetic in the artists' commercial ventures, and work on above the line campaigns for external brands.

When the Australian Urban Outfitters-style retailer General Pants sponsored a free concert by British psych-dance band Klaxons, he orchestrated a ticket giveaway that gave the band a logo-free gig, and the client got a new CRM database. Customers who spent more than $100 received a scratch card and logged on to a branded website and entered information for free tickets.

Recognizing that artists are more open to working with brands, major labels are also shifting marketing focus to brand partnerships. Two years ago, Universal Music Group International launched BrandAmp in the UK, a joint venture with WPP's media investment arm, GroupM. The aim is to broker partnerships between clients and artists that might involve strategic music consultancy, live event planning, and composition in association with London music shop Delicious Digital. Recently, BrandAmp recruited pop stars Take That to appear in a campaign for clothing retailer M&S.

Another major, EMI Music, is also extending its reach. This past June, the company promoted Cynthia Sexton from SVP, strategic marketing and licensing for EMI Music North America to EVP, global brand partnership, licensing and synchronization for EMI Music. "We are digging deeper than we ever have into all the major revenue streams that are part of licensing," she says. "That's everything from trailers to video games and licensing with respect to our other assets - album art and other things that aren't necessarily musical."

Sexton cites a recent campaign for skin care brand Origins that featured EMI singer-songwriter KT Tunstall, who was open to working with a brand that shared her social values. Tunstall became a spokesperson for the brand, which in turn sponsored her tour and inserted coupons in her album. "It was a match made in heaven," Sexton says. "They actually went on to do a lot more with KT."

But where can ad agencies fit into this new brand-band paradigm? When it comes to long-term brand partnerships, Sexton says she prefers to work direct-to-client. "There's a very long lead dealing with brands and it's in all of our best interests to start working early on rather than have it be so opportunistic," she says. "What we'd love to see is creative directors bringing us into meetings early on and allowing us to work hand in glove with them if they feel music is important to that brand."

For Moline, allying with agencies sometimes benefits his small label. Modular has worked with Saatchi & Saatchi and Leo Burnett on pitches to develop music programs for campaigns. "For us, they have vast resources that we can tap into, such as publicity, that we don't have in-house," he says. "Working together we could develop marketing properties that are bigger than anything we could pull off as separate entities."

Modular Recordings http://www.modularpeople.com
EMI Music http://www.emimusic.com
BrandAmp http://www.brandamp.co.uk