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The Evolution



Marketing Music Compilations

A Study on the Origins, Developments, and the Marketing Aspects of Music Compilations.
A dissertation submitted to the SAE institute, London for the degree of Bachelor of Art (Honours), Recording Arts

By Jeremy Gotlib August 2004

The Evolution of Creating and Marketing Music Compilations

2004, Jeremy Gotlib


The Evolution of Creating and Marketing Music Compilations

Music compiling a centuries old tradition, which has morphed into a multi-million industry, offering a variety of products that can cater for many different needs. In this competitive market of compilations, creating the product is only half the battle. Marketing and selling those compilations, to the public is just as vitally important. The Evolution of Creating and Marketing Music Compilations Traces the origins and developments of music compiling; from 100BC up until the 21st century, exhibiting cases that had significant influence. Apart from the cultural and historical aspects, this paper discusses the marketing innovations that have been used to sell compilations in the past, and in the modern market. In addition this paper looks at the different types of compilations available, while discussing their marketing strategies, relevance and their uses for both music consumers, and the music industry. This paper is intended for anyone wishing to seek further knowledge, and understanding on the music compilation market, its roots, and the business behind it.


The Evolution of Creating and Marketing Music Compilations

Table Of Contents
Abstract................................................................................................................... iii Acknowledgements ................................................................................................vii Chapter 1 - Introduction .........................................................................................1

PART I COMPILATIONS THROUGHOUT HISTORY ........................................................................3

Chapter 2 - Before the Record................................................................................4 2.1 - Greek poetry ..................................................................................................4 2.2 - Early music compiling...................................................................................4 2.3 - Broadside ballads and chapbooks..................................................................6 2.4 - The Phonograph.............................................................................................6 Chapter 3 - Compilation in the Age of the Record ..............................................7 3.1 - The early years...............................................................................................7 3.3 - Top Of The Pops..........................................................................................10 3.4 - The tape cassette and the CD.......................................................................11 3.5 - The 80s ........................................................................................................12 Chapter 4 - The 90s, Dance Music, and the DJ ...................................................14 4.1 - DJ Based Mix Compilations........................................................................14 4.2 - Developments of the Dance Compilation....................................................16 4.3 - Ministry Of Sound ......................................................................................17 4.4 - Further Innovation of Dance Compilations .................................................18 4.5 - Compilations as an artistic work .................................................................20 Chapter 5 Internet and New Technologies .......................................................22 5.1 - Internet.........................................................................................................22 5.2 - Audio Video Compilations..........................................................................24 5.3 - VJing............................................................................................................25


Chapter 6 The Compilations Market................................................................27 6.1 - Types of Compilations.................................................................................28 6.2 - Compilations and Their Uses ......................................................................30 6.3 - Market Targeting Diagram ..........................................................................35


The Evolution of Creating and Marketing Music Compilations

Chapter 7 Compilations - Business & Marketing............................................36 7.1 - The licensing business .................................................................................36 7.2 - Compilation Marketing................................................................................37 7.3 - The use of brand names ...............................................................................45 Chapter 8 - Conclusions ........................................................................................47 Appendix A .............................................................................................................49 Appendix B - The Licensing Procedure ...............................................................50 B.1 - Mechanical Payments .................................................................................56 B.2 Heads of Agreements form. Courtesy of Sony music.........................57 Appendix C Interviews .......................................................................................61 Appendix D - Music to the Masses Compilations, Live Performance & Radio ..................................................................................................................................63 Appendix E - Newspaper Cover mounts..............................................................64 Appendix F Greatest Hits & Soundtracks........................................................67 F.1 - Greatest Hits ................................................................................................67 F. 2 Soundtracks................................................................................................68 Appendix G - Additional Label Information.......................................................69 APPENDIX H Artistic Compilations - Additional Information.....................72 Bibliography ...........................................................................................................73

The Evolution of Creating and Marketing Music Compilations

As a kid I remember myself fantasizing about having all the albums in the world, and then sitting at home and taping just the good songs from each album, so I could have a collection of the best music ever made. I would name my cassettes the best music in the world A-Z. Of course I never actually completed this plan but maybe my childhood dreams implies something about the human need to collect things, be it, artifacts, clothes, stamps or of course music1. Music compilations most people have them in their music collection, but what do they really know about them? What are they? What are their origins? Who produces them? Are they just an expendable pop product or do they have any other values? And what can be their role in the future? This dissertation deals with music compilations, and is itself a compilation of several aspects, points, subjects, and facts all relating to music compilations. As far as I know (and I have checked all over) this is the first written paper to deal especially with music compilations. Thus the scope of issues to write about was enormous. I couldnt help finding myself writing more and more chapters about various aspects of this fascinating world of music compiling. When it came to editing this dissertation I had to sacrifice a lot of the chapters in order to assemble a work that will give the best overview on the subject while also keeping a focus on a theme and structure. As I discovered by writing this dissertation, marketing is an inextricable part of music compilations, and as such my work has developed a more marketing oriented theme. However this dissertation is not entirely written as a marketing work, as that would have taken too much of the focus from the compilations. What I did instead, was to look for a way to combine cultural and historical developments of compilations together with marketing theory In addition, this dissertation (mainly the appendix) discusses some other valuable compilation related aspects that are interesting to know. Final note Due to the vast amount of compilations releases over the years it was impossible to acknowledge every single influential release, however I have tried to refer to as many different compilations as possible. Some are featured because they were first of their kind or had an important significance to other compilations that followed, while other compilations are visually present in order to demonstrate and give examples to some of the points discussed I hope to shed a bright light on what is a significant part of the music world. I believe you will find it interesting and educating.

The need to collect can also be associated to some extant with the three higher steps of Maslow's Hierarchy of Needs (Social needs, Esteem needs, and Self actualization)


The Evolution of Creating and Marketing Music Compilations

This dissertation is the outcome of two years of study at the SAE Institute, London. I owe great thanks to all the SAE staff, especially my tutors; Milan Todorovic, Darren Gash, Chris Hayne, David Harrison and Xander snell who helped and guided me all throughout my studies. This work couldnt have been done without the help of many people, whose willingness to help was beyond every expectation I had, be it by giving me contacts, providing personal interviews, or simply answering a few questions over the phone, thank you all. I would especially like to thank (in no particular order) Corrado Dierna IRMA Records UK Leon Oakey Classic Records Carrie Miller Hed Kandi Darren Ensom Stoked Music LTD Elliott Tucker Demon Music Group Austin Wilde WHOA Music Simon Marks Family recordings Universal Records Grant maglanen - Sony music special markets Davin Larky - MCPS Owen Laurence - Music Week Grahm Anderson - EMI Rob Crutchley BPI library Ralf moor Mixmag Magazine Alex McCnut Universal Records Suzan Carry Ministry Of Sound Records Barry Allsop - Daily Mail & The Mail on Sunday Finally I am forever thankful to my parents who without their love, motivation (and money). I would have never got to the point in which I am today.


All music can only be the sum or part total of what has gone before2

Last Night A DJ Saved My Life, The History Of The Disc Jockey p-379

Chapter 1 - Introduction
The music market can be divided into three main categories. Ignoring the various types of music or the different mediums available, it basically end up with three forms in which music is sold: 1 The artist album 2 The single (and occasional EP) 3 - The compilation Whilst the media prefer to concentrate on the sales of albums and singles, and many books cover these areas, one might think that the role of the compilation has diminished in its importance, but make no mistake, compilations are big money for the music industries3, and have many important aspects for both the record industry and the music loving general public. In addition compilations have a much more significant role in music history than one might first believe. Various artist albums, compilations, or as they are also known anthologies are essentially the collection of various songs from various artists into one packaged product. Under the term compilation falls a loose description of what is a multi-faced market: from small label retrospectives that appeal only to a certain small niche market to TV advertised, million selling compilation series such as NOW and HITS. Between these two extremes lays a vast world of themes, genres, brands, ideas and marketing concepts that make the compilation market so divers: But that is not all. The compilation market also consists of multi artist soundtracks and even artist based greatest hits compilations that are also regarded as compilations. Both of these types of compilations account for an important part among the biggest selling albums of all time4. And as this was not enough, there are the newspapers and magazines covermount compilations that are given away free to millions every week5. While the selling of music, for profit is the bottom line of music marketing and promotion6. From all the different products released by a record company, compilations are in their essence the most market focused ones, as opposed to artist based releases in which the artistic input will contribute to the creating process, and the marketing will be planned according to the final product7 Compilations are from their earliest stage developed with the intent of generating new money from already available recordings.
as it will be demonstrated later on, compilations account for 22% of all music revenues in the UK. 12 out of the top 50 best selling albums in the USA are soundtracks or Greatest Hits calculated from Top 100 Albums chart that appears in - 5 For some interesting fact about the production of newspaper covermount compilations pleas refer to Appendix E 6 This Business of music marketing and promotion page 3 7 Apart from in manufactured pop in which marketing is part of the creation.
4 3

The Evolution of Creating and Marketing Music Compilations

Therefore looking at the development of music compilations will go hand in hand with the development of marketing concepts. Every album, every label, every record, every deal, is unique 8 Whilst one could divide singles and albums to categories according to the genre of music they represent, the world of compilation is much more diverse. This is due to the fact that for every music genre there are numerous types of compilations, each with different concepts, marketing strategies and licensing deals. With this in mind it would be impossible to focus on every single aspect and release. Therefore this dissertation will focus on some of the most important aspects of music compiling throughout history, while eventually narrowing the focus group to the new possibilities that have emerged (and are still emerging) within the dance compilation market. This dissertation is divided into two parts: The first part comes to give an historical and cultural timeline of the evolution of music compilation from ancient history and up until recent years. This historical overview provides the background to most modern aspects of compilation marketing, and is an important reference point for any future development. This leads to the second part of this dissertation that is an overview of the current compilation market. While dealing with issues such as: 1 - The different types of compilations and the role they have, in perspective of the music industry and the music consumers. 2 - The business of music licensing and the different aspects of compilation marketing. There are three main points that this dissertation will address: 1 It will show the place that music compilation had throughout the history of music. 2 It will discuses the main marketing concepts that the compilation market revolve around (this will be done by analyzing and looking at different compilations). 3 It will give suggestions for possibilities of future compilation marketing planning, and implementations that will address the fast growing digital distribution and new technologies.

Quoted from an interview the writer conducted with - Darren Enson Stoked Music LTD 29/04/04 see appendix C for the full transcript. See appendix for full transcript of the interview and more information about Stoked Music LTD

The Evolution of Creating and Marketing Music Compilations


The act of compiling has had crucial importance throughout history; by collecting different types of knowledge, the human race was able to establish every form of creation. Be it in religion, art, or science, without gathering all the previous information and organizing it in a fashion that future generations can learn from, no intellectual evolution could have been made. The Bible, for example, is after all a collection of events, stories and myth that took place in different times and places, and were eventually compiled and written down after years of aurally passing from one generation to the next. Books are another form of compilation compilations of knowledge. A writers job is to collect information from various sources (other books for example), assemble them, and create a new product from which other writers will eventually collect their information. When it comes to art, collecting remains an important issue; from early times kings and emperors surrounded themselves with the finest works of arts from around the world, and up to this day. Their vast collections make museums and galleries the backbone of the art world. As for music, cynics might say that music in its essence is a collection of sounds and pitches. But, more important is the fact that the entire evolution of music has been based on influences, collected from various styles of music from different origins. In addition, a lot of ancient songs and poems were saved, as in a time capsule, only by being documented in anthologies that collected the essence of a period.

The Evolution of Creating and Marketing Music Compilations

Chapter 2 - Before the Record

2.1 - Greek poetry As early as 700 BC, centuries before written music notation, the Greeks were writing poems, many of these poems have survived to this day thanks to anthologies. A collection of selected works, often in the same literary form, of the same period, or on the same subject9. The Greek Anthology is a collection of poems, mostly epigrams, that span the Ancient and Byzantine periods of Greek Literature10. The word Anthology derives from the name of the first collection of songs ever found11: Anthologia, which is the Greek word for Garland12 was compiled in Greece by Meleager of Gadara at around 100BC. Under the title Anthologia, he compiled poems by himself and forty-six other Greek poets. Meleager's Anthology was so popular that later editions of it were made. And its title made the word "Anthology" a synonym for what it is known for today13. 2.2 - Early music compiling When it comes to music one would find it impossible to accurately pinpoint where the act of collecting music began, as music notation was hardly documented until after the 9th century14. Even music historians find it hard to even imagine how the music of ancient Egypt or Greece sounded, not to mention consumed. But as the act of collecting had such importance in other fields, we may assume that music collecting is almost as old as music itself. After all, even in terms of pure entertainment, from ancient times throughout history, each era and place had its own favorite religious chants and folk songs. Performers of these times, be it the musicians of ancient Greek, the European mistrals of the Middle Ages, or the church choirs, had to relay (even if not entirely) on many different & familiar songs and hymns to please their audiences. Of course in those times before proper musical notation and printing were available, the possibilities of actually saving music works on paper (not to mention creating a product that can be related to as a music compilation) were impossible. But as time passed, this problem was solved.
Webster Dictionary Quote and information taken from: 11 Ancient Egyptian paper containing fragments of collections of poetry have been found in Egypt prior to that. 12 A bouquet of flowers the Greeks used to wear around their heads 13 Information taken from ibid & sophia/ancient_lit/greek_anth.htm - 70k 14 The earliest form of notation is from the 6th century but only in the 9th century notation was boosted by the catholic church, that wanted an accepted written language for music information taken from
10 9

The Evolution of Creating and Marketing Music Compilations

Early forms of written music notation have started in the 11th century. This allowed music to be documented in a physical form15. And by 1450 music notation was pretty much established. In that year Johan Gutenberg invented printing16 and finally the language of music had the means to be widely spread, collected, and treasured. Among the many songs and music sheets printed between 1450 and 1900, compilations of selected works were very common, and some even gained a place of acknowledgment in history. Here are a couple of examples; Parthenia edited by Orlando Gibbons in 1613 was prepared as a wedding gift for Queen Elizabeth I, and it was the first collection of keyboard music to be printed in England17. The first musical work to ever be copyrighted in America (18/11/1790) was in fact a compilation of songs - Rudiments of music compiled by Andrew Adgate18

15 16

Quote and information taken from - Information taken from - 17 Information taken from - and 18 Information taken from American Popular Music and its Business, The First Four Hundred Years, Volume 2 (1790-1909) page 3

The Evolution of Creating and Marketing Music Compilations

2.3 - Broadside ballads and chapbooks From about 1506 and throughout the 16th to 19th centuries Broadside ballads were popular across Western Europe and America. These printed sheets contained words to popular songs and occasionally even music notation. They were sold for a penny by traveling peddlers or by merchants in a town's marketplace. The ballads were usually memorized and then sung to a well-known tune in bars or public places. As printing became cheaper, more and more Broadside ballads were published Someone19 had the idea of folding several sheets into one book and selling it for a dime (10 pennies), thus introducing for the first time the concept of a marketable music (song) compilation. These chapbooks (cheap books) or garlands as they were known became a very popular mean of entertainment, culture, and information, selling over 250,000 copies20 in some cases. By the early 20th century the popularity of the chapbooks had diminished as newspapers and records began to replace them.21 2.4 - The Phonograph The birth of the compilation - the product, as we know it today, was entirely dependent upon the evolution of new technologies (i.e. the LP). But even from the beginning of audio recording, many forms of music compilations have been made. The first machine to captures audio was the Phonograph22 invented by Thomas Alva Edison in 1877. Initially Edison intended it for things other than music recordings (not to mention compilation of music) 23. Nonetheless the first orchestral recording ever made with a Phonograph (in 1889) was of the New York orchestra playing a collection of works by Wagner, Haydn and Beethoven24. This recording is probably the first ever audio music compilation.

This someone is considered to be an Englishman named Richard Jones who in 1584 printed A Handful of pleasant delights the earliest known chapbook. 20 American Popular Music and its Business, The First Four Hundred Years, Volume 2 page 45 21 For more information on Broadside ballads see; And 22 The Phonograph was a sound-reproducing machine capturing the sounds onto tin covered cylinders 23 According to the Guinness Book Of Recorded Sound, Edison mainly intended it for the recording of spoken word (letters, books, dieing men wills, etc) 24 The Guinness Book Of Recorded Sound


The Evolution of Creating and Marketing Music Compilations

Chapter 3 - Compilation in the Age of the Record 25

3.1 - The early years By the start of the 20th century a new medium took the place of the Phonograph. The Gramophone used the printing of sounds onto disks that could be duplicated, thus finally enabling the creation of a music business. At first, records were made of shellac26 rotated at a standard 78-rpm (rotations per minute) and recorded up to 4 minutes of sound per side. That was obviously not a sufficient playing time to produce a compilation. But even as soon as 1925 record companies knew they can do much better business by selling a selection of 78s in a discounted price rather then only one 78 at a time. One of the earliest of such compilations was, The Colombia History Of Music volume 1 (1930) this was followed by further volumes, and shortly after other companies began to release their own edition such as Two Thousand years of music (Parlophone 1930-9) and History of Music in Sound(HMV UK, 1953-9). In fact the concept of the music album was derived from this selling method27. Originally the word album had one meaning: A bound or loose-leaf book, for storing or displaying photographs, stamps, or the like.28 It was by bounding various singles into one package, that the term album became synonymous with the record industry. By the end of World War 2, record albums were simply collections of 10 and 12 78rpm singles which were purchased together in an actual album 29 The next step for the music industry was the successful re-issue of the LP format by Columbia Records in 194830; using new microgrooves the new vinyl-made, 33-rpm record could play over 20 minutes of sound per side. This meant that compilations (and full length artist albums) finally became an established product that record companies can invest on properly producing and marketing. In the 60s when the LP finally became the standard format for music consumption, it became clear that compilations would have an important role in the music business. The Sound of Music, West Side Story, and South Pacific were all multiple composers/artist soundtracks and all topped the charts on both sides of the Atlantic (with the former two being the best selling albums of the 60s).

Unless stated otherwise, Information for this chapter taken from; The Warner Guide To UK & US Hit Albums The Guinness Book Of Recorded Sound Last Night A DJ Saved My Life, The History Of The Disc Jockey and A very fragile rubber Webster dictionary The Warner Guide To UK & US Hit Albums, page 6 Previous attempts to lunch an LP format were unsuccessful an abounded.

26 28 29 30

The Evolution of Creating and Marketing Music Compilations

Other non-soundtrack compilations also enjoyed a great success, mainly in the USA, with RCAs 60 years of music America loves best series being the first various artists LP compilation to reach the 'Top 3 of the US charts in the early 60s.

Across the Atlantic the British customers were slower to catch on with the compilation trend (apart from soundtracks), between 1962-1966 a few companies released hits and theme compilation; Pye records All The Hits by All The Stars and HMVs Great Motion Pictures Themes achieved mediocre success and Phillipss All Star Festival even managed to reach the top ten for a few weeks, but it was only in 1967 with the arrival of R&B that a compilation series became a major success and proved compilations are a valuable tool for introducing and establishing new genres of music31. Motown records British Motown Chartbusters did not only sell vast quantities and stayed a long time in the top ten but also preceded and oversold the artist albums that the compilation was based upon, this compilation series that was only based on Motowns own catalog helped introduce and promote the new R&B genre from America in the UK market. The series has been so successful that in recent years Universal records (that is the current owner of the Motown catalog) have re-released the series in the form of a budget CD compilation.

Current Re-issues of the Motown Chartbusters series

As the following pages will reveal, the developments in technology and marketing meant The 70s brought some changes to the compilation world. Apart from the emerging of new artists and new genres, the concept of the compilation stayed the same, but the focus on intensive and innovative marketing gave compilations the edge they needed to become more successful then ever before. From the late 60s and throughout the 70s there were two main compilation brands whose marketing innovations became landmarks in the compilations world.

See chapter 6.2 for more about the uses of compilations.

The Evolution of Creating and Marketing Music Compilations

3.2 - K-Tel32 The Chart topping exploits of K-Tel records heralded the dawn of TV advertised compilations33 K-Tel records first started its operation in 1964 with the release of "25 Great Country Artists The Company was founded by Philip Kives a former home appliances salesman. K-Tels policy was to license scores of old and new music from different labels and to create theme compilations with names such as 20 dynamic hits34 or Disco Fire. K-Tels use of heavy T.V advertising35, together with blinding colors and screaming fonts cover art cultivated compilations into a pop culture institution, and took the US and the UK by storm in the seventies and early eighties. K-Tel was the label that has set some of the most important building blocks for compilations marketing: TV Advertising Up until today, major labels have departments that are working on developing TV advertised compilations. Cover art designs - K-Tel pioneered the use of extremely colorful covers that can catch the eye of a costumer from a distance. Distribution to non-music outlets Together with Top of the Pops compilations (Hallmark records)36. K-Tel was the first to make its compilations available through non-music stores such as pharmacies and super markets. As commonly happens in the compilation market, K-Tels success was soon copied by many companies including; Arcade, Telstar and Ronco, all offered similar products whit similar marketing strategies, and often very similar names, such as 20 fantastic hits37, and them as well were selling in large quantities.

K-Tels use of blinding colors and screaming fonts set the roles for compilation design for years to come

Information on K-Tel taken from: The Warner Guide To UK & US Hit Albums. Explosive Dynamic Super Smash Hits! An Article by; Greg Beets published in 04/may/2001 available from music_feature2.html, and

33 34

The Warner Guide To UK & US Hit Albums - page 114 K-Tels first release to top the UK charts in June 1972. 35 To watch the TV adverts go to 36 See following heading for more information about Top Of the Pops 37 Released by Arcade in August 1972.

The Evolution of Creating and Marketing Music Compilations

3.3 - Top Of The Pops In the late 70s the BBC also joined the compilation bonanza by using the name of its hit TV program Top of the Pops to promote hit compilations. But even earlier (1968) the name was used by Hallmark records for their series of cover versions to chart hits performed by session musicians (one of whom was Elton John)38, the Hallmark TOTP compilations, together with another series called Hot Hits(EMI) became very successful reaching the number one spot in the UK on several occasions - a fact that can be attributed to the introduction of two new aspects to the compilation market. The budget compilation by cheaply recording cover versions, Hallmark saved money on royalty payments for the original recordings, thus enabling the sale of their compilation at a lesser price. The use of model cover girls on the cover of the LP.

More then 20 years later. models are still used as compilation cover. proving that sex is a valuable marketing tool


Hallmark information taken from -


The Evolution of Creating and Marketing Music Compilations

3.4 - The tape cassette and the CD While the LP gave record companies a format on which they could easily release full length albums and compilations, the release of tape cassette recorders by the Philips Company in196439 gave the public the means to create their own customized compilations, be it to enjoy at home, in the car, and of course to give to others40, thus fulfilling a basic urge that most people feel they need to do with music they like. To share it with friends and loved ones, to let the world know about new songs they must hear. Yes a recorded cassette was the perfect gift; cheap, personal, creative, exiting and much more. By the end of the 70s, taping music became so popular that in 1978 the RIAA declared Home taping seriously threatens the music industry in the 80s the slogan even became "home taping is killing music". But in fact the wide spread of cassette acted as a marketing tool, giving peoples accesses to new music, a fact that helped music sales throughout the 80s and 90s

Which one is correct? History proved it to be the latter

The introduction of the CD format in 1983 was the next step for the compilation market. Although it only became the standard format for music consumption in the 90s, the CD with 74 minutes of playing time gave music companies the possibility to make compilations bigger and better. Series such as the NOW series41, that only featured 30 songs on a double LP, expended to over 40 songs on a double CD. More importantly, the move to Digital left music companies with vast catalogs of old albums, not all popular enough to be re-released as a CD. Again compilations were an easy solution as they enabled the release of selected songs from these albums.

Information taken from - and The Guinness book of recorded sound page 101


Is there anybody who never recorded an I love you or a Happy birthday theme compilation for a friend? Which is discussed in the following page.



The Evolution of Creating and Marketing Music Compilations

3.5 - The 80s The 80s were the time in which major record companies emphasized the release of their own top branded compilations, rather then just licensing their catalogs to smaller companies (such as K-Tel). By utilizing marketing concepts from the 60s and 70s (with much bigger budgets) and focusing on the biggest hits (regardless of the genre) the majors brought the compilation market to new heights (again). The two biggest of these compilations were the product of a joint venture between the major players in the music industry: HITS - A joint venture between CBS & WEA (which later transformed to BMG, Sony, Telstar, WSM). This series released in December 1984 came as an answer to another series that was destined to become the biggest brand name in the compilation world. NOW (thats what I call music) The series started in December 1983 (just in time for Christmas) as a joint venture between Virgin records and EMI (both later merged in 1992). By 1987 (NOW 8) PolyGram (Universal) joined in, and this triumvirate has been going strong ever since, enjoying a phenomenal success in the UK with sales of between 518,000 (NOW 54 was the lowest selling in the series) and 2.1 million units (NOW 44 (December 1999) is the best selling in the series so far, it is also the highest selling non soundtrack various artist compilation in the UK ever)42. The concept of the NOW series is To include the biggest hit singles of the previous quarter43, and as EMI and Universal control a large amount of the new hits released in the UK, they can save them exclusively for the next NOW installment. In addition all the smaller independent companies would love to see one of their releases being featured in the series. After all, royalties from a single song featured on a NOW compilation can exceed 90,00044, not to mention the free exposer to new markets.

Different NOW editions from around the world The colors may change but the logo always stays The same creating Visual branding

Information and Figures taken from: Music week 17/04/04, and 43 The Warner guide to UK & US hit albums 44 Based on 25%pro-rata royalties divided between 40 songs after 1.5 million sales



The Evolution of Creating and Marketing Music Compilations

In the 90s the brand name NOW (Thats what I call music) have been licensed throughout the world to companies associated with EMI/Universal In the U.S., the brand (introduced in1998) became the first compilation ever to enter at No. 1 (NOW 4) and is currently selling an average of 4million units of each release, making it officially the most successful compilation brand ever. The success of the NOW and HITS series proved that compilations can be a very important revenue path, even for majors who are used to sell millions of artist albums. Encouraged by the discovery the majors established new departments, to create compilations that will appeal to the widest market possible, and be marketed throughout TV advertising (UMTV in Universal, Sony music TV in Sony, BMG TV Projects in BMG).

Hits, Bravo & Smash Hits. Are example for compilation series that adopted the NOW business model.

As the success of the NOW and HITS compilations have shadowed the success of artist based albums45. In early 1989 the BPI gave compilations and various artist albums their own chart in Britain. However, being pushed into a side chart did not affect compilation sales, and actually throughout the 90s compilation sales have been on a constant rise. Although throughout the 90s major compilations still accounted for most of the compilations sold in the UK46. By the end of the 80s something much more interesting was shaping. A new music genre, that was distained to change the compilation world all over again.

45 46

As can be seen in albums charts from the 80s

Majors also continued to develop new compilation concepts and themes. Some of these latest concepts are discussed in Chapter 5.


The Evolution of Creating and Marketing Music Compilations

Chapter 4 - The 90s, Dance Music, and the DJ

1988 saw the latest would be revolution happen in pop music. The DJ with his pair of Technics and box of records, can make it to the top, with a little help from a sample machine, squiggly bassline, and beat box. Yet again this was interpreted as the masses finally liberating the means of making music from all the undesirables47 Throughout the late 80s and the 90s the music industry has passed an important change. As computers and digital instruments became cheaper and widely available, the means to create music were now available to all; this resulted in a flux of new artist, releasing music via new small independent labels. The best example for this matter is dance music which since 1988 has enjoyed a growing popularity, evolving into many sub genres, each consisting of many producers, releasing mostly individual singles which are usually sold in the form of a DJ friendly vinyl. Therefore there was a need for a format that could be sold to the general public at a profit, and again as dance music is mostly based on individual tracks, compilations was the obvious solution. And as Dance music was growing more and more popular, DJs were the obvious choice to compile and mix these compilations In addition dance music provided many new recognizable brand names, in the form of clubs and DJs; these had an important role in the growth in the number of compilations. 4.1 - DJ Based Mix Compilations Since the 60s it has been a DJ job to treat records not as separate songs but as means of composition With wily representation and clever marketing the DJ is now the hero of his age, a pop star, a crowd draw, a reliable brand name The music industry adores the DJ for the way is name could be used to sell collections of otherwise anonymous tracks 48 The roll of the DJ as a musical entertainer has its root in the early days of radio in the beginning of the 20th century, throughout the century DJ had shifted from a humble human jukebox to a taste maker and eventually a superstar, all through this time the collection and selection of music played the most vital part of the DJ profession. (In Jamaica for example DJs are referred to as The Selector). With this in mind it comes as a surprised that only in the 90s DJs and compilations became a recognized pairing in the music industry.
47 48

The Manual, Jimmy Cauty & Bill Drummond page 46 Quote and information for this heading taken from Last Night A DJ Saved My Life, The History Of The Disc Jockey


The Evolution of Creating and Marketing Music Compilations

Already in the 70s (The Disco age), many DJs and club owners realized the financial opportunity that lied in selling the DJ sets played in the club. The first club to capitalize on this trend was Discos earliest social clubs Le Jardin whose owner John Addison began to sell reel to reel tape sets of his resident DJ Bobby Guttadaro for up to 75$ apiece, this was in early 1973, and by 1974 most of the clubs in New York got in on the game. Eventually Billboard magazine alerted the music industry to this illegal practice. The tapes were originally dubbed by jockeys to serve as stand bys for times when they were not in personal use of disco turntables, they represents each jockeys concept of programming, placing and segueing of record sides. The music is heard without interruption49 Depriving the original copyright owners from their lawful revenue, these mixed tapes became very popular among the trendy club goers, and could be heard playing in shops and cafes. In the same year, The National Association of Discotheque Disc Jockeys (NADD) was formed by a DJ named Bob Casey. Casey realizing the potential market for such mix tapes contacted ASCAP (The American Society of Composers, Authors and Publishers) to inquire on the arrangements and royalties needed to allow the making of legal DJ mix compilation. ASCAP, who did not realize this potential and already had a long history of disputes with the DJ profession50, wouldnt allow any DJ mix compilation to be commercially released51. But not letting DJs release their own mix compilation, didnt mean mix albums werent released, as early as 1974 the record market was introduced to the new breed of albums; the mix compilation, the first of whom was Disco Par-r-r-ty from Spring records, a non stop dancing LP that was not credited to any DJ. Eventually it took the music industry more then sixteen years to commercially associate DJs and compilations. In that time mix tapes sold millions of copies, and had a key roll in the establishment of many underground dance scenes such as Hip Hop, house and rave. It was only in England of 1991, after DJs had established themselves as marketable stars that Mixmag live (DMC records) mixed by DJs Carl Cox and Dave Seaman, had the honor of being the first legal DJ Based mix compilation to be released.
Billboard magazine 12/10/1974 From early radio days ASCAP saw the DJ as a profession whose depriving real musicians from work 51 Authors remark on the subject In resemblance to Internet copyright problems emerging in the 21st century, we can see the pattern of the big copyright holders that ignores new trends in the public and thus missing on new means of revenues and opening a back door for illegal piracy.
50 49


The Evolution of Creating and Marketing Music Compilations

4.2 - Developments of the Dance Compilation Once the ice was broken it was only a matter of time before many new dance labels had emerged, and together with new already existing ones almost all had at least one series of compilations that was based on DJs, both as the selector of the music, the mixer of the tracks, and most importantly the brand name that helps sell more copies. Soon dance became the second best selling compilation genre in the UK (overselling rock and easy listening) and it kept growing all throughout the 90s, eventually representing over a third of all compilation sales.
Dance share of the compilation market52 1993 -------7.8% 1998 --------27% 2000 ------36.5%

All along dance also helped the compilation market to double in size53

From all the many new labels that emerged, there are a few which deserve special attention for the way they have managed to combine innovation (both in concepts and marketing) with commercial success, thus paving the way for others to follow (which they happily did)54

52 53

Figures taken from BPI statistical handbooks 1993, 1998, 2000 IBID 54 Apart from the labels discussed over the following pages, readers can also refer to Appendix G for additional information


The Evolution of Creating and Marketing Music Compilations

4.3 - Ministry Of Sound 55 1993 was a key year for dance compilations; among the new compilation dance labels emerging that year (Journeys by DJs and Azuli are the best known of which56) this was the year in which Ministry Of Sound the London club began its operation as a dance label. Two years after the club opened. MOS record started its activity with the release of The sessions mixed by DJ Tony Humphries57. The series has been going on ever since showcasing the music of House and Garage DJs (mainly from the USA) In 1995 another series emerged The Annual a series showcasing the biggest club tracks from the previous year, mixed by popular UK radio DJs such as: Boy George, Pete Tong, Judge Jules &Tall Paul, the series became one of the biggest success in dance music compilation (with some volumes selling over 500,000 copies). This brought MOS to change its business model into a big corporate adopting some of the marketing strategies of the major compilations (TV advertising, big hits, and all around distribution) and combining it for the first time with an already established clubbing brand name, with many more series that followed58. The result was its transformation into one of the biggest sources of compilations in the UK59
Ministry of sounds logo, established the branding of dance music

Other clubs and labels that witnessed this success, soon started flooding the market with their own brand name compilations: Renaissance, Cream, Godskitchen, Pacha, Space, Gatecrasher, Bugged out, and more, all successful clubs, and all released DJ based dance compilations, be it by opening their own label, or joining one of the many independents and majors companies that were looking for club names to release their dance compilations through 60. This, together with many new companies that jumped on the bandwagon by issuing their own label branded compilations; the dance compilation market reached a climax in 2000.


Information taken from Ministry of Sound: The Book, and a telephone interview with Suzan Carry, Licensing manager at MOS. 56 See Appendix G for more information. 57 The series has been going on ever since showcasing the music of House and Garage DJs (mainly from the USA) 58 Other successful imprints out on MOS Include: The Chill out Session .. Classics Dance Nation and Trance Nation. 59 In 2001 MOS represented 7.9% of compilation sales in the UK, that was more then majors such as Sony & BMG 60 For more information refer to chapter 7.3 - Use of brand names.


The Evolution of Creating and Marketing Music Compilations

As often happens, together with the climax came saturation. Too many compilations were just the same and Ultimately there only so many times you can give people the same thing61 Luckily some independent labels realized this problem and started to introduce new concepts. 4.4 - Further Innovation of Dance Compilations The DJ as a music compiler In 1998, DMC records62 released Back To Mine a series of compilations that was mixed by DJs63 but was not a mix of club orientated music (i.e. house, techno, etc) instead Back To Mine was a selection of more eclectic music that represented the DJs personal after hours favorites. Back to Mines success64 opened the door for the concept of using DJs (and later, artists, producers, and musicians) as the names behind selections of rare and eclectic music under themes such as the music that inspired me music I listen to at home My influences etc. Since then these type of compilations has been a great educational tool for discovering new (old) music. Why spend your life obsessively searching for obscure records? When you can buy a DJ mixed compilation CD made by someone who does that for a living65
Just a few of the many compilations using DJs as compilers of eclectic music.

61 62

Ralph Moor - Mixmag See appendix C for the full transcript of the interview. For further information on DMC See appendix G 63 Such as Nick Warren, Dave Seaman, and Danny Tenaglia 64 According to DMC ( the series is selling 50,000-80,000 copies per volume. 65 Last Night A DJ Saved My Life, The History Of The Disc Jockey p22


The Evolution of Creating and Marketing Music Compilations

Lifestyle accessories Another interesting innovation that can be partly attributed to Back to Mine and other chillout compilations was the transformation of the compilation into a lifestyle accessory. Although many compilations can be regarded as a lifestyle accessory (depending on the lifestyle one lives), several companies have managed to transform their compilation brands into a lucrative accessory that had to do as much with lifestyle, and status, as it had to do with the music it contained. HED KANDI A London based label (established in 1999) who releases different series of compilations which range from chill out to house, all featuring a clever design and packaging that promote a rich and hedonistic way of life, while using cartoons of female models66

I consider Hed Kandi to be a lifestyle brand. We can sell seven different CDs in a year in different styles, but they will all appeal to our target audience67 In addition to their unique branding method, Hed Kandi also invests in creative ways of marketing their product. In a market which became full of DJ mixed compilations, Hed Kandi have distinguished their compilations by releasing them unmixed They run worldwide club nights under the brand name. Every summer they give away 35,000 compilation samplers to clubbers in Ibiza. Buddha Bar (Challomusic) Another valuable example for a lifestyle compilation is the Buddha Bar series (since 2000), which in perfect timing captured the growing trend to exotic eastern music influences, with concepts such as meditation, becoming a lifestyle trend this compilation marketed itself as the soundtrack to this life style very much by using the figure of Buddha on the cover. * In both cases, the concept, and image of these compilations was copied by other companies that saw the financial potential of this type of compilations. 68
66 67

Which as discussed earlier, are always good for sales Mark Doyle Founder and general manager of Hed Kandi, as quoted in Music week magazine 22/03/03 p21


The Evolution of Creating and Marketing Music Compilations

4.5 - Compilations as an artistic work Collage A technique of composing a work of art by pasting on a surface various materials not normally associated with one another, as newspaper clippings or parts of photographs.69 Collage- the collection of pieces of existing works into a new creation, stemmed from the early cubists who pasted newspapers cuttings on to canvas70. In music Mahler was the first to use other people works for his own music71. That was in the beginning of the 20th century. Towards the end of that century samplers and sampling became common production tools for making music72, so common in fact that there are albums made only from samples of other records. DJ shadows critically acclaimed73 album form 1996 Endtroducing... (Universal) is essentially a compilation of hundreds of samples mixes creatively into a credible work of art that has managed to blur the gap between a compilation and an art, that the album was easily accepted as an artist album.

DJ shadows Endtroducing... was soon followed by other Hip Hop DJs such as DJ Food and Kid Koala that have also created albums by only using samples of old records

In the 21st century, with the arrival of new DJ friendly computer programs such as ABLATON LIVE, and Native Instruments TRACKTOR, together with endless amount of new Mixers, effects and Turntable style CD players, DJs can now, not only, mix two records together but also re-create the entire music on the compilation. Thus creating a unique product that is far beyond just a collection of songs, but a work of art in itself.

68 69

See chapter 7 for more information Webster dictionary 70 Information taken from: The Complete companion to 20th century music 71 IBID 72 Especially within the Hip Hop scene in which samples are the base of the production. 73 Mixmag magazine have crowned the album as The best album of all times while many other magazines have put it in their top ten.


The Evolution of Creating and Marketing Music Compilations

"I don't like mix CDs, everyone's being lazy, so I got to do something different, it's a whole philosophy really. 'Let's take it to the extreme, to somewhere that's it never been before It's about setting a standard for yourself and progressing yourself. Showing people you can do something interesting that's more than just dance music." Richie Hawtin74 Richie Hawtins DE9: Closer to the Edit(Nova mute records 2001) Soulwaxs 2 Many DJs As heard on radio Soulwax part 2 (PIAS Records 2002) Sashas Involver (Global Underground 2004)75

The above are just a few examples of compilations that have taken elements of other songs and created a new exclusive product out of them while proving to be both a commercial and credible success76, pushing the boundaries of the way we appreciate music.

Future compilations will blur the lines between the DJ mix compilation and the producer / artist album

74 75 76 For further information about these three compilations and others see appendix H. 2 many DJs has sold over 300,000 copies in Europe alone (as stated by PIAS Records)


The Evolution of Creating and Marketing Music Compilations

Chapter 5 Internet and New Technologies

New technologies are constantly changing the way music is produced, packaged, marketed, and consumed77. Alongside the future possibilities of artistic compilations, as was discussed in the previous chapter, there are a few other important issues that need to be addressed as future opportunities for new compilations concepts. 5.1 - Internet What does the future holds for the music industry? This question has been on the minds of many music experts since the end of the 90s when MP3 files began swapping hands freely, shaking the music industry and lowering profitability. However in the last year it looks as if the music industry is starting to recover with the help of successful legal download services such as i-Tunes,, Napster, etc. In the mid 80s with the birth of the CD, many old catalogs were re-issued in the new format but yet there was a vast amount of music with no commercial potential for a CD rerelease, unless of course it was as a compilation. With digital distribution the case is slightly different. As the cost of manufacturing are minute, essentially all music will have the opportunity of being available as a download, leaving only the problem of marketing it to the public - a problem that could be solved by using compilations as the format of choice. Here are a few examples: Much as chapbooks were sold for a dime (instead of Broadside ballads for a penny) so can internet shops sell a bulk of 20 songs for 10$ instead of 0.99$ per song, this may lower the profit but over all increase the revenue, once such method is embraced many marketing strategies can follow. For example you could pay 10$ and have a credit for 20 songs which you can use over a certain period, or maybe pay even less when you make yourself a compilation from a catalog of only one label. The fact that the market is moving into downloads of single songs also adds another problem for the record companies, who find it harder to sell an artist album with only few good songs78. This might push forward the creation and sale of more compilation oriented products. But again, as consumers will have the ability to create their own compilations, and not settle for pre-made compilations, record companies will be forced to come with even more innovative ideas of compiling music.

77 78

This Business of Music Marketing p.6 As discussed earlier, it is the sale of entire albums, that represents the main revenue of a music company.


The Evolution of Creating and Marketing Music Compilations

The following are just a couple of the possibilities: Employing more artists, DJs, music journalists or even celebrities, to recommend on music they specialize in. Employ methods similar to the ones already used by AMAZON in which buyer can submit preference charts, and for every product, you can view other recommendations such as people who bought this product also bought..

Finally, the fast growth in sales of portable music players such as the i-Pod means that now people can travel with their own personal Jukebox containing collections of their favorite songs. And this is basically giving birth to an entire generation of music compilers. I listen much more to compilations then I ever did. The i-Pod gives songs and artists and albums, and playlists equal weight: a hi-fi cant do that. It takes seconds to make a playlist, and who wouldnt rather listen to a collection of favorite tunes, or selections from new albums, then wade through 70 minutes of an album to find maybe half an hour of decent music79

Apples i-Pod and Rio Diamonds RMP 600

Music download services offer vast collections of music that will fuel the jukeboxes of the future

Quote taken from Its music But not a panel discussion published in The Times on 10 December 2003, the quote itself is said by Nick Hornby A best-selling author (Pitch fever, High fidelity), and a known music collector.



The Evolution of Creating and Marketing Music Compilations

As there are probably a few good years before the CD will lose its crown as the preferred music medium, it seems that both majors and independents are continuing to come with new ideas and developments of the music compilation. One of the most interesting of these new innovations comes in the form of DVD compilations. 5.2 - Audio Video Compilations In 1993 a German based label named K780 introduced a new breed of compilations called X-MIX, the concept of these was to use 70 minutes DJ mixes of Techno music81 accompanied by digitally generated video clips, these compilations were sold as a video cassette and a CD. While throughout the 90s several other companies came with similar concepts, it is only in recent years that new possibilities had emerged. The increasingly lowered price of producing and manufacturing DVDs means that now companies can release their compilations with bonus DVDs, containing video clips etc. This creates a possibility to re-package and reissue many of the old compilation concepts, this time with an added value, and to a new music buying generation.

Rewind (Universal 2004) - 80's pop/rock compilation with a bonus DVD that includes all of the videos.

80 81

For more information on K7, see appendix G With DJs including big manes such as: Laurent Garnier, Richie Hawtin, DJ Hell, Paul van Dyk, Dave Angel, and more.


The Evolution of Creating and Marketing Music Compilations

5.3 - VJing With DJs everywhere increasingly using new technology to add to their sets via creating live samples and loops and using computers, FX units and such like, its only a matter of time before a visual element become another part of their growing arsenal of digital tricks. And then, with the similar advances in VJ technology, who knows what clubbing, may look like in a few years time82 VJing (mixing visuals instead of music) is another fast growing art form, where all over the world club spectators can see the latest image manipulating being mixed alongside a DJ set. With new DJ friendly DVD players and effect mixers such as Pioneers DVJ-X1 DVD and Korgs Kaoss Entrancer. Image mixing is becoming much more accessible to known DJs83. So it might only be a matter of time before companies start releasing DVD compilations combining a collage of music and images which will appeal to both music and visual art lovers.

Pioneers DVJ-X1 DVD allows users to manipulate and playback synchronized digital audio and video creating visual mixes84

The KAOSS entrancer provides real-time control over digital effects processing for both audio and video sources and is ideal for the VJ, DJ, club, or electronica artist looking for cutting edge video and audio manipulation during live performance.85


From an article by Tom Kihl published in DJ magazine available from: As there arent yet any superstar VJs it is more likely that a DJ will be hired to do a audio video compilation, and therefore these new technologies are so interesting. See for more details. See for more details.


84 85


The Evolution of Creating and Marketing Music Compilations



The Evolution of Creating and Marketing Music Compilations

Chapter 6 The Compilations Market

From the 7000 albums that were released in the first 7 months of 2004 in the UK, about 1000 were compilations86, bringing an estimated albums / compilations ratio in the UK to about 6:1. Despite the relatively low percentage of compilation releases, recent years have seen the compilations market representing around 25%87 of all albums sales in the UK, which means compilation are actually selling very well. In 2003, for example, about 55 million compilation units were sold in the UK (24% of 228 albums sold), this figure puts the compilation market above the declining singles market that only sold 41 million88 that year. In addition, as the next diagram shows, compilations have enjoyed a relative stability even in times when the rest of the market has been unstable89

Music sales by type of product (UK)

Unit Sales in millions 200 150 100 50 0
90 98 99 95 91 89 92 96 19 20 00 20 19 19 19 19 19 19 19 19 19 19 20 20 03 93 94 97 01 02

Compilations Artist based Albumes


Compilations serve a wide range of needs, both from the consumers and the record companies point of view. This chapter will look at the different types of compilations and the reasons for which they are produced and consumed.

86 87

According to information received from Simon Ward (Chart Editor of Music Week magazine) See appendix A figure 1 for the complete percentage chart figures taken from BPI Year Books 1989 2003 88 Both figures taken and calculated from - 89 Diagram produced by author, according to sales figures taken from BPI year books 1989 - 2003


The Evolution of Creating and Marketing Music Compilations

6.1 - Types of Compilations There are different ways in which compilations can be divided into categories. The first and most general one will be a division into: Artist greatest hits Soundtracks Other multi-artist compilations Although much can be said about the first two, this dissertation will concentrate only on the later, which in itself is a multi-faced subject90. The next step is the general way to divide the market of categorizing according to music genre (Pop, Dance, Rock, Jazz, Classical, Hip Hop, etc). This is a common classification that is used by the music industry when producing annual reports. However this kind of classification only tells half of the story; as in recent years compilations have evolved into a much wider scope of marketing in which compilations get an added value. Therefore it is possible to sub-divide the compilation market according to new categories, each with certain characteristics, that will cater for different needs of both the record company and the consumer. The first sub division can be into Pop product used to shift a large number of units over a short period of time and then vanish Credible (specialist) product used to sell over a long period of time

Each of these types can be used with any genre of music and can then be again sub divided into Theme compilations These compilations are created either around a musical theme such as Disco, rock, etc or around a certain period in music history 60s 70s 80s or a special occasion (Mothers day, the Millennium and the Olympic games are just a few of the reasons to release themed compilations). Of course it didnt take long for record companies to realize that these themes can only offer limited releases and that more creative marketing concepts were required to release a wider range of compilations. Once in a while if a song in a certain genre will succeed91, it will be obvious that some companies will release a compilation based on this genre (featuring the successful hit, of course).

To still obtain some information about Soundtracks and greatest hits please refer to Appendix F


The Evolution of Creating and Marketing Music Compilations

Budget compilations Guidance compilations Joint venture compilations For example - joint ventures between two or more record companies; in this case each company will contribute either; the money, the music, the concept or any other aspect of the production process

DJ Mix Compilations Label retrospective (specialist compilations)

When looking at all the different combinations that are available, it is no wonder that the compilation market has become more diverse, and to add to this there are many compilations that are released under very similar definitions
The following sketch is a good way to illustrate the many different combinations that can lead to a compilation.


Songs can often become successful after being featured in a TV advert, a film or by being sampled on a recent hit.


The Evolution of Creating and Marketing Music Compilations

6.2 - Compilations and Their Uses The following is a description of the many uses that different compilations can have (both for customers and the music industry) From the Consumer Point of View Readiness one of the most important aspect of compilations is their readiness to be used, meaning a consumer buying a compilation expects it to already have a selection of the best music in a genre, so he or she can put it in a CD player knowing that for 70 minutes they wont need to keep selecting and changing CDs. This is, for example, the reason why compilations are so often played in bars, restaurants, shops etc. Value for money retail price of compilations is usually between 9.99 and 15.99. As compilations usually contain 20-40 tracks92. The apparent cost for each track is anything between 0.25 and 0.8. Which is much cheaper than the average single price (1.99 3.99). This is mostly obvious in hits compilations that offer a package of the current top 40 hit singles and is seen as a bargain for many customers. In other cases a customers may only be interested in a couple of songs from an artists album (usually the singles), so instead of buying many albums for one or two good songs on each, a compilation provides many hits in one album. While single sales are in their all time low, sales of NOW 58 which, of course contains the biggest hits of recent months are higher of any other previous summer NOW compilation 93 Getting hold of hard-to find-music As catalogs of music are getting bigger, older and even deleted, and a lot of old or specialist music is still only available on vinyl, the average costumer may find it impossible to find certain songs or artists. Compilations are a very good tool for re-issuing music and can therefore assist in finding rare songs or even rare genres of music. An example of that was already seen in the days of early Hip Hop: As the craze for breakbeat became bigger, and as many of these tracks that contained these breaks were old and pretty rare, a Harlem entrepreneur, Paul Winley launched his Super Disco Breaks compilation series whose concept was assembling looked up tracks that contained exciting breaks94
93 94

The standard compilation is a 2 CD album with some compilations even offering 3 or 4 CDs Music Week 14/08/04 p 21 Last night a DJ saved My Life The history of the disc jocky page 241


The Evolution of Creating and Marketing Music Compilations

Even today it is common for some record labels to release genre based compilations that will showcase the best music of an old or non-commercial genre that is hard to trace in albums or single form. DJ compilations are another source for looking up hard to find music, as the music played by DJs is usually very specialist and is often only released on vinyl. A DJ mix CD is the easiest way to get hold of these tracks. In addition there is a current trend of I was inspired by compilations which are usually set around a DJ or an artist that presents the music that inspired him Give a DJ a blank canvas for a mix album, and he will do one of two things; either fill it with tracks as rare as hens teeth, or plump for new tune after new tune95 Education an anthology of a certain period or style is a useful and profitable way of introducing each new music buying generation with the hits of previous musical periods that are rare or unavailable in any other format. Learning about a specific genre or period of music is a hard work, you can read books or look it up on the Internet, hoping to find good references for music you can start your collection with, and then find out where you can buy them, this can take a long time and is not always effective in finding what you want. You can also go to a record store and ask for help there, but as Austin Wilde, the director of WHOA records puts it: Some people are afraid to go to record shops because people who work in there are a bit snobby96. Compilation are providing a wide reference of artists in one album, that is a good starting point from which one can sample the different Flavors and choose the ones he or she likes, and focus on them. Taking classical music as an example. A person that wants to start listening to classical music can either learn about the various composers and their styles, and then go and buy a dozen albums, or he can buy one compilation and start from there. This example is relevant for all genres of music.

95 96

DJ magazine Vol3 Number 6 5/3/04 page 86 Quote taken from an interview with Austin Wilde, the director of WHOA records on 01/04/04. For more information on WHOA see appendix or visit


The Evolution of Creating and Marketing Music Compilations

From the Record Companys Point of View Money The music industry is, after all, a business that functions for money, and therefore compilations (as well as any other product) function is first and foremost a financial one. Since the days of the chapbooks it has been common to compile a number of songs into one package, and to sell it for a lesser price then the total amount that would have been paid for the songs separately, thus creating more products and encouraging more sales. As the following diagram shows, the sales of compilations represent a large revenue source for the music industry. In addition, it generates income to hundred of labels licensing their music to the compilations producers.

Figure 197 Although some people will claim that: Compilations turn recourses away from investing in new artists98. The fact is that many new artists, especially in the dance industry, get most of their exposure and income from compilations. During the 90s boom for dance music compilations, a big release could have been licensed to over 60 different compilations, while in todays economy this figure might be much less (between 5 to 30 compilations)99, but it will still generate more net income, than the sale of CD singles and 12 combined. But in the modern music industry compilations also have other financial aspects.
97 98 99

Figures taken from BPI Year Book 2003 As stated in an interview with Corrado Dierna (IRMA Records) Information taken from Music Week 10 July 2004 page 10


The Evolution of Creating and Marketing Music Compilations

Compilation as a tool for introducing & establishing new genres of music Many music genres owe part of their success to the compilations that introduced, and established them in the mainstream market100. This is very apparent in the independent and electronic music scene, which is considered faceless101, and is helped by the sales of compilations to showcase its artists. Here are a few examples: Reggae Trojan records that formed in 1968 was the first label to bring the reggae sound into the UK. Compilations have always played a key role in reggaes development, and Trojans legendary Tighten up series was instrumental in bringing reggae into the mainstream102 French House - Supper Discount (MSI 1997) pioneered the French house sound introducing for the first time artist such as: Alex Gofer, Etienne De Crecy, and AIR

Electro futurism (city rockers 2002) a successful compilation that introduced the short-lived electro scene to the UKs mainstream. House and garage were initially introduced to the London scene in 1988 with the help of the compilation "Garage Sounds of Deepest New York" (Republic records).103

Techno In 1988 - Virgin Records releases the compilation "Techno! The New Dance Sound of Detroit and introduces the music to Europe. 104

As mentioned earlier, in the 60s it was Motowns compilations that helped establish the R&B sound in the UK 101 Meaning, unlike in rock and pop, the producers of electronic music are often unknown, and very little mass media marketing is done for their music releases. 102 BPI market information sheet 231 June 2004 103 104 detroit_techno/detroit_techno_history.htm 9k



The Evolution of Creating and Marketing Music Compilations

Compilation as a promotion tool compilations can be used to showcase a labels repertoire, a DJ/ club/bar musical style, or even to help promote the profile of hotels and restaurants.

Different hotel compilations from around the world

Reviving old catalogs unless talking about multi-million selling artists or classic albums, most records have a life span of a few years, afterwards they will be forgotten and deleted. However years after, the best songs of these albums can be revived through compilations. Re- issuing catalogs Every time there is new music that is adding more to back catalogs, so that needs to be plundered again, at some stage and exposed again at some stage as well 105 The trade of catalogs between companies in the music industry is a very active behind the scenes business, there are many companies whose sole functions are to license backcatalogs from various labels, re-package them (mainly as best of compilations) and sell them (normally at a mid rage price)106. Compilations as a substitute to album releases as was seen in Figure 1. Singles, due to their low retail price, can only represent a small revenue path for most music companies; instead every label will rather release and sell more albums. But what happens when a certain music genre produces mainly single orientated works? In such case a compilation can come as a simple solution to boost profits. When house producer Armand van Helden only had three new songs he came with a good marketing idea, instead of releasing an EP, or waiting to have more materiel, he approached southern fried records and together they released a mix compilation CD that consisted of many different genres and combined Armands new music in the mix. This release was basically treated as an album release with two of the three new songs being released as singles

105 106

Quote taken from an interview with Austin Wilde, the director of WHOA records Demon music group is one of such companies that specialize in re-issuing old catalogs. For information on Demon refer to Appendix C or visit


The Evolution of Creating and Marketing Music Compilations

6.3 - Market Targeting Diagram

After knowing the different types and uses of compilation it is easier to create a diagram that will help plan further marketing strategies. To illustrates this are two examples of compilation breakdown. Rush Hour (Universal 2004) Grime (Rephlex 2004)

Type ---------


Compilation Dance Joint venture: Music Mix & Universal

Genre (Target market) ---- Dance

Pop Product Theme: dance music for an accelerating drive time

Specialist Theme compilation: Grime music

Theme Concept -------

Uses (qualities) Main qualities from a customers point of view Readiness Value for money

Main qualities from companys point of view Reviving old catalogs Money

Main qualities from a customers point of view Getting hold of hard to find songs

Main qualities from companys point of view Introducing new genre of music Substitute to an album releases

Additional points that needs to be taken into consideration In what point is the compilation unique? What is the level of competition? What are the ways to distinguish it from the competition?

Now all that is left is to actually do, is the marketing. And that is the subject of the next chapter.


The Evolution of Creating and Marketing Music Compilations

Chapter 7 Compilations - Business & Marketing

7.1 - The licensing business Unlike an artist album a compilation is produced from already existing songs so there is no need for high production costs for paying producers, musicians, studios, etc. Instead when creating a compilation, a company needs to license all the recordings that are not part of its own catalog. Therefore it can be argued that music licensing is probably the most important part of compilation production, as without music there would be no compilation. When it comes to the licensing procedure, many different issues and terms (such as: Royalty rate, advance, term of license, territory) need to be agreed between the sides. This is done through an initial licensing contract, which is also known in the industry as Heads of Agreements 107. In order to better understand and appreciate some of the points discussed in this dissertation, a basic understanding of the licensing procedure is needed. However as this is a complex and long subject that is not directly relevant to this dissertation, readers are advised to go to appendixes B & C, from which a better understanding of the subject can be gained. There are, however, two points that should be further emphasized, as they are crucial to the entire product development of compilations. The Advantage The overall royalties paid for licensing remains the same regardless of the amount of tracks featured on the compilation, meaning that the producers of a 10 song compilation and a 40 song compilation (licensed on the same royalty base) will eventually pay the same percentage of their revenue to the licensors.

This point is important for understanding the fact that there are so many double CD compilations. The Disadvantage When a company produces an artist album, it is the sole owner of the copyright for that music, in compilations the music is mostly only licensed under a non-exclusive license, which means that other companies can license the same music again, and develop a competing product.

This makes the compilation market much more competitive and marketing orientated.


For a full overview of All the licensing aspects, please refer to appendixes B


The Evolution of Creating and Marketing Music Compilations

7.2 - Compilation Marketing Marketing is a vital part of every aspect of commerce and whilst the 4 Ps of marketing are applied to different products in different ways, companies will forever spend a lot of money to market their products The music industry, for example, is spending an increasing amount of money each year on advertising (in 2003 over 10% of the industry revenue were invested in advertising)108
Record Companies Advertising Expenditure (in millions) 140 120 100 80 60 40 20 0 1991 1993 1995 1997 1999 2001 2003

In regards to compilations; two main points should be addressed109 1 Compilation marketing differs from artist album marketing. 2 Marketing of major compilations differs from marketing of independent compilations. Compilations Vs artist albums Product - The first thing to identify is; what does the product contain in each case? Artist Album Compilation

The record

The performer

The record

Branding, Advertising, Differencing

Figures taken from BPI statistical handbook 2003. Diagram calculated from figures taken from: BPI statistical handbooks 1991 - 2003 109 Neglecting the fact that every release might have unique marketing strategies. Which for obvious reasons is a to wide of a subject to focus on in this chapter



The Evolution of Creating and Marketing Music Compilations

Music is ideal for establishing deep emotional connections between artist and audiences, which is often felt on the most personal terms by the fan. Resulting in a kind of brand loyalty that marketers of other product can only dream about Artist albums will probably always be more treasured than compilations; as customers often rather buy a product from an artist they love, and by doing so showing their respect and gratitude to that artist. Compilations on the other hand cant be based on the image of an artist, meaning that the bond between artist and audience doesnt exist in compilations110 In addition, most record companies will give much more attention to the product development of their artists111. Promotion Compilations can not be marketed through radio plays, press, video clips, live shows, or even tabloid gossip, all of which are an important part of selling an artist album (a part that has been well mastered by record companies throughout the years). Instead compilations need to rely more on advertising, and branding. In addition live performances of artists are also acting as marketing tools helping record sales112. This is why record companies often give artists tour support money. One good example of tour support used to promote compilations sales, is with the Global Underground series, which made its reputation by showcasing DJ sets from various location around the world, and then sending the DJs to do a worldwide tour to promote the compilation113

Distribution This is relatively similar both for compilations and artist albums. Price as mentioned earlier114 the price can work to the advantage of compilations as they offer a better value for money.

* In conclusion, it can be said that: With artist albums the marketing is developed, after and according, to the product.115 With compilations, the product is developed, after and according to, the marketing.
Except in DJ/ artist based compilations, which we shell talk about shortly. This makes sense as artist builds the reputation and repertoire of the record company. 112 Most artists will go on a tour to promote their album release 113 For more information on Global Underground see Appendix G or visit 114 See chapter 6.2 115 Except in manufactured pop
111 110


The Evolution of Creating and Marketing Music Compilations

Major compilations vs. Independent compilations Unlike the albums and singles charts where there seems to be a symbiosis in the presence of major and independent labels, the UK compilation chart seems to be almost entirely dominated by the major labels - Universal music, EMI/Virgin, Sony Music Entertainment, Warner music, and BMG, and several smaller companies that specialize in compilations and have adopted the marketing methods of the majors: (Ministry of Sound and Telstar). We want 40 tracks two CDs and lots of top tens, thats how we do it116 The main difference in the marketing approach between the independents and the majors can be described in the form of a 5th P Period in simple words, major (with the use of hits and advertising) target the sales of their compilations to a large quantities over a short period of time (2-3 months) after which the product will be forgotten and replaced by a new, fresher compilations. Independents on the other hand, with the use of more specialist music, DJs, and elaborate concepts, target their compilations to sell over a long period of time (a few years) But even when looking at the overall total sale of compilations, most of the major compilations will still sell more than most of the independent compilations. The reasons for this can be attributed to several factors: Market Targeting - Majors, as big corporate businesses want to achieve the highest amount of sales possible they will therefore want to appeal to the widest market possible (undifferentiated marketing). In music terms; that will be done by compiling, mainly, popular music, that will appeal to the lowest common denominator. This can also be seen in terms of packaging and branding, where the majors will avoid the use of DJs or smaller brands and mainly use colorful but not too elaborate artwork. Independent, on the other hand, will mainly need to rely on market segments left untouched by the majors. Even if independents wanted to produce hits-orientated compilations, they would have found it to be too expensive. Major labels have a trading system, or a deal agreed where they say we use that track and they say ok so we use your track, and they give themselves the same royalty but no advances is paid 117

A former compilation executive at Universal. As quoted in the article Hed Rush M8 magazine January 2004 As quoted by Simon marks Universal, in an interview, the full interview can be found in Appendix C.



The Evolution of Creating and Marketing Music Compilations

As the majors hold the biggest catalogs and the majority of chart hit singles at any given week, they can secure this music for their own compilations, by making it expensive to license by independent labels (majors will usually ask for 25% royalties and a 1500 advance from independents), therefore independents need to rely on catalogs of other independents (meaning more specialist music), and on more elaborate concepts. This, eventually, makes their products more credible, interesting, and long lasting, but in the short term, less appealing to the majority of consumers who are interested in big name hits. Differencing the product After a musical category has been chosen and the market has been targeted, both majors and independents will need to differentiate their compilation from the competition. The following are the main ways to diversify a compilation. 1 - Coming up with new concepts. 2 - Using exclusive music 3 Extensive advertising that will make the product recognized 4 Using exclusive brand names (That includes the use of DJs or artists as compilers) 5 Focusing on the compilation superiority to similar compilation this can be done by adding certain adjectives to the compilation name for example The best, essential etc.


The Evolution of Creating and Marketing Music Compilations


The Evolution of Creating and Marketing Music Compilations

Price - As the next table shows118, price is not such an important factor in compilation marketing, and in fact the market share of mid and budget price compilations has been declining over the past years. In addition some over priced imported compilation series such as Buddha Bar (Wagram-France) were sold for up to 30, and yet became very successful. Full Price Mid Price Budget

However some companies are giving extra incentive to buy their compilations by offering 3 or 4 CD box set compilations. Promotion As advertising is expensive, the biggest difference in promotion strategies taken by majors and independents is related to money. Money that the majors will often have but the independents wont. Because majors have big budgets and dont need to pay advances on many of the songs they license for their compilations, they can afford to spend the needed money on more expensive forms of advertising such as: lucrative placement in record shops119, Billboard campaigns, radio and most importantly TV advertising which is crucial and efficient for creating a best selling compilation.120 Without the budgets to have such expensive advertising forms, independent compilations will rely on other advertising methods such as: Cheaper forms of advertising street promotion (posters, flyers etc), reviews, magazine advertising, and retail packages121 Creating series of compilations by creating a long running series, each new compilation is promoting the previous ones.

118 119

Figures taken from BPI statistical handbooks 1998 & 2003 Which also coast money 120 To prove that, is the fact that almost all top20 compilations are TV advertised compilations. A retail package is when one big retail chain such as HMV or Virgin will order a large number of units, and help promote the compilation through magazines and in store display. In return the label will give the chain a big discount on the product


The Evolution of Creating and Marketing Music Compilations

Distribution The fact that every major also operates as a major distributor, facilitates the placement of its product in shops all over the UK, making it easily accessible to a wider range of customers.

In addition, major compilations have access to big chain supermarkets such as Tesco, Safeway Sainsburys, and Woolworth, which are only interested in stocking TV advertised compilations, with high selling potential. In recent years these chains have increased their share in music retail sales, and in 2003 30% of all compilation were sold in them122. A fact that emphasize even more the supremacy of the majors in the compilation market.


BPI market information sheet number 222 20 February 2003


The Evolution of Creating and Marketing Music Compilations

Packaging As mentioned earlier, good artwork can help create brand identity and transform a compilation into a lucrative accessory. However, on the other hand, it can back fire as other companies will imitate the artwork, thus creating confusion among customers. The following are a few examples of cases, which can be almost described as a case of Passing off123, both for the similar names and Packaging. Original (Innovators) Copiers

Passing off - Where a business has registered a trade mark and another business sells goods or provides services under the same trade mark without permission from the first business, there may be an infringement of the registered trade mark. The actions of the second business could be a type of unfair competition where it benefits from the reputation of the first business associated with the registered trade mark. The law of passing off concerns unfair competition more generally in situations where there does not need to be a registered trade mark or any other IP right. Where a second business does something so that the public is misled into thinking that the activity is associated with a first business and as a result the first business suffers some damage, then it may be possible for the first business to sue the second business for passing off.


Taken from


The Evolution of Creating and Marketing Music Compilations

7.3 - The use of brand names Branding is about identification and trust. Every company strives to build brand trust with its customers124 Brand names are an important aspect of modern trade and marketing; companies invest a lot of money to create fonts and logos for their product and even more money to market them. This is true for every type of product, from clothing to soft drinks. Therefore it is no surprise that using brand names to help promote compilations is used by both majors and independents.
Increasingly, products are all the same! Every product innovation is immediately copied and brought to market, so brands have become further and further divorced from the product itself. Marketers have therefore started to created affinities not between the brand and the product, but 125 between the brand and what consumers like

As concepts for compilations cannot be copyrighted and are often copied by other companies, the market is flooded with similar compilations creating some confusion among consumers. Therefore it is only with a good recognizable brand that a company can distinguish its product from the rest. While advertising and great concepts can help establish the compilation itself as a brand (the NOW series for example), it is often much simpler for record companies to associate their compilations with already well-known brands. Such brands can be: DJs, clubs, bars, radio stations, and any other brand that is believed to have the power to help promote the album. Normally the brand will receive some royalties for the use of its name (depending on its selling power), but more importantly the compilation can work as a marketing tool for the brand itself.
Clubs Radio stations

Major and independent record Companies will often associate their compilations with other brands
Azuli records & Space Ibiza Wagram & Radio Nova (France)

EMI & Cream

124 125

Universal & Kiss 100 Taken from the article Branded Media: The Business of Brandcasting By Colin Kirkpatrick available from


The Evolution of Creating and Marketing Music Compilations

In the past years, many clubs understood the selling potential of their brand name and realized they can have much more control over the final product. They also realized that they could make much more money if they open a label of their own; license the music and release compilations themselves. 126 The following are a few examples of brand names that are now releasing compilations via their own label.
Fabric (London Club) Gatecrasher (Club) Renaissance (Club) Caf Del Mar(Bar Ibiza)

Use of DJs Apart from the obvious reasons (vast musical knowledge and assumable good taste), the use of DJs also transcends the artist/audience gap127 that is missing from other compilations, and also enables to promote the compilation with the help of live performance (DJ Tour). However the problem in many cases is that a certain DJ can only appeal to a certain audience, and if that DJ is commissioned to compile several compilations in one year, it will be hard for these compilations to succeed.
After the success of his artist album American DJ: Derrick L Carter was used as the brand name behind three different compilations, none of which sold in large amounts

Artist album (Classic records 2003)


Classic records 2003

Azuli (2003)

React (2003)

All along (for different reasons) they are always clubs who are doing joint venture compilations with established record companies. 127 As was discussed in chapter 7.2



The Evolution of Creating and Marketing Music Compilations

Chapter 8 - Conclusions
As part one of this dissertation demonstrated; compilations have gone through a long evolution path, and although they were not always known as compilations. The act of collecting songs or music into one medium can be traced thousands of years back into history. All throughout music history and the modern music business, compilations were there to compile the latest hits, remind us of the musical past, and to tip us about future genres. Therefore it was only natural that with the years, as music catalogs were getting bigger and bigger, and new genres and styles were emerging or being re-visited by the public. More and more compilations have been released to cater the publics need to discover music. However, as seen, it was only in the past ten years that compilations have evolved into something much greater then just a collection of songs, with dance music acting as the catalyst that transformed compilations into a more vivid product, both sales-wise and artistic-wise. Dance compilations also offered many new brand names that helped make compilations the second largest contributor to the music industrys revenue (after artist albums). After seeing the evolution of the compilation from humble collection of periodic songs into a marketable and sellable product, it was seen that compilations were able to generate many different marketing ideas, and big revenues for the companies who thought up original ideas and new marketing concepts. However, it was also noticed that once a concept has been made successful, it was soon copied by other companies. Part two of this dissertation demonstrated the many different types of compilations, their unique characteristics, and the way they have been made useful for both the music industry and the music consumers. Additionally part two demonstrated the various marketing aspects that relate to compilation production and sales.


The Evolution of Creating and Marketing Music Compilations

The most important points that this dissertation brought up are as follow: There is a pattern throughout history of relaying on the sale of multiple song/recordings under one title in order to increase sales. Different compilations can provide for different needs. Throughout the 90s the compilation market has doubled in size, and in recent years compilations have accounted for about 25% of all album sales in the UK. In many cases a successful compilation will be followed by flax of imitations.

In result companies need to relay more and more on branding, and aggressive advertising to distinguish their product from the competition. This leads to new and more exiting concepts. And to many DJ/club based compilations. Compilation marketing is different to artist album marketing. Different types of compilations need different types of marketing.

As for the future, this dissertation suggests that there are many new exciting technologies, which are creating new possibilities of producing compilations. And while not being certain of how the music industry will shape in the digital future, it is more than likely to say that compilations will keep having an integral part of the way music is consumed.


The Evolution of Creating and Marketing Music Compilations

Appendix A
* Figure 1 - Compilations sales as a percentage of total Album sales per year
Year Total Album sales (In millions) Compilations share

Information taken from BPI Statistical Handbooks 1989 - 2003


The Evolution of Creating and Marketing Music Compilations

Appendix B - The Licensing Procedure

*The information on this appendix is based on studying the information from various Heads of agreements128, and from the information gathered during several interviews held between the writer and licensing or compilation related personals in the music industry. For more information about the interviews and the persons on the other side of the microphone see next appendix. The licensing of the music is probably the most important part of creating a compilation, as without the music there would be no compilation. When it comes to the licensing procedure, there is are few different issues and terms that needs to be agreed between the sides, therefore many cases are unique The following appendix will discuses the different terms that a licensing deal contains. Once an estimated track listing has been made, the record label (Licensee) will need to license all the track that are not part of its own catalog, this job is given to the licensing department or in smaller labels to an outside licensing company that will be happy to do the job for you for a fee of around 1000. The licensing procedure itself is made from a few stages, first the companies owning the masters for the different songs needs to be found and approached. This stage by itself can be a long and difficult procedure, as catalogs are often sold or licensed between different companies, and in addition different companies hold the rights to the songs in different countries. In case of a real trouble in finding the owner, one good solution is to contact the publishers of the song (publishing rights are not transferred as occasionally as master copyrights) and ask them if they knows who holds the rights for the recording at the present. Once you have traced the owner you need to contact him, to check he really owns the master, that the song is free from any unclear samples, and that he is willing to license it for a compilation. With todays economic situation and Internet piracy, few are those who will oppose for their music to be featured in a compilation although in some cases a music company can be unwilling for one of its songs to be on a compilation this might be because there is a clause in the artist contract not providing it 129, or the company itself wants to save the song for its on future project.
Heads of Agreements is the term used in the music industry for the arrangement sheet in which the licensor is stating the songs he is interested in, the offer, and the terms of the licensing deal. This arrangement is then negotiated by the parties until a approved version is accepted, and once signed this version is usually regarded as the licensing contract. For a list of the different Heads of Agreements used see Bibliography Legal Sheets A Honor reserved only few superstars such as Michel Jackson and The Beatles that up to this day refuse to be featured on any compilation
129 128


The Evolution of Creating and Marketing Music Compilations

In such cases the Licensee can either pay a large advance to convince the licensor to license the song, or use a cover version, which can be licensed for much less. Assuming that everything is fine and the record company is willing to license its material. The parties will need to negotiate the terms of the license; this is commonly done by the licensee sending an Heads of Agreements offer by fax or e-mail. Different companies have different forms of Heads of Agreements which differ both in the layout and in some of the content, by viewing several different Heads of Agreements it is possible to list the main term discussed, which are as follow: The basic information: At the top of every Heads of Agreements there will be a reference to basic information such as: From: Company name Department______, Date______, To_______, Contact number__________ Bank details_____________ Stating the request For example: Request for repertoire approval and non exclusive130 license to:_______(Company name), for the use in __________(compilation name) Name of artists and songs requested for licensing _______________ Additional details Name of product manager or licensing person dealing with the compilation Configuration: For example - 2CD Number of tracks: This is important for the licensor to know what will be the prorated royalty Release date: Important for the licensor to see that the release date of the compilation doesnt coincide with a release date he has for another product using the same song. Territory and export rights: If the licensee is interested in pressing and distributing the compilation worldwide, he has to get a special worldwide license, which some companies will not give or will demand more money for. In addition the right for the songs might belong to different companies in different countries. In that case the licensee have two options:


An exclusive license is basicaly an asingment of the copyrights to another comany who can than license it to other companies, this kind of licwensing deal almost never take place when licensing for compilation, but can be found in big cataloge licensing deals, which are an entierly different subject.


The Evolution of Creating and Marketing Music Compilations

1 - To press the compilation in one territory (for example the UK) and export it to EU countries (which is not even considered export with the new EU trade treaties131) or even to other countries (as long as it is done discreetly and in small amounts) 2 To license the compilation (brand name, art, and track listing) to overseas companies and to let them do all the required licensing procedure for their territory. Applied royalty basis - In the UK this is the PPD Method of Sale: For example - retail, club, mail-order, etc.

Marketing methods: For example -TV advertising, Online-Promotion, magazine advertisiting. Term of the License: Usually the term is 3-5 years.

Once this term is over the licensor is not allowed to print any more of the compilation. But most companies will put another clause stating that any copies of the compilation that are already printed can still be sold for a period of 6 (or more) months after the end of the term, this is known as the Sell off period and basically allows the licensor to print as many copies as he wishes prior to the end of term. Packaging deductions Again this is a tricky clause, the source of Packaging deductions comes from record companies charging their artist a fee of 15%-25% to cover the container of the LP/CD because artists should only get a royalty on the record not the package132 usually every record company that have already licensed songs in the past know not to agree to any Packaging deductions, but some licenses still put this clause, hoping to get a better deal. Sales estimation: This is important for calculating the advance

Amount of promo copies Of the compilation that will be sent to the licensor: Other specifications: DJ-Mix, special packaging etc. Deadline for consent / Expiration of request: This is the deadline before which the licensor needs to sign the documents and submit the relevant master copies and needed label information


CONSOLIDATED VERSION OF THE TREATY ON EUROPEAN UNION Official Journal 24 December 2002, article 2 paragraph 1, the treaty in full can be found on:

Quote and information taken from All you need to know about the music business page 80 as well as information gathered in interviews.



The Evolution of Creating and Marketing Music Compilations

Royalties In the UK royalties are usually calculated as a pro-rated133 percentage of the PPD134. The percentage can be any where between a minimum of 14% and up to 25% paid to majors. The royalty percentage is usually negotiated between the sides until an agreed royalty is achieved. In money term the royalties can be as low as 3 pence per CD sold135 and up to 13 pence136 and more, but the most common figure would probably be 6-7 (17%-20%) pence per unit137, obviously this will be determined by the bargaining power of each record company on an individual basis for every song. Here are some point that also influence the royalties percentage Major or Independent When licensing-out, majors always ask for 25% when licensing-in from independents they will usually pay 20%, so eventually most of the negotiating is done between the independents. The number of tracks to be on the up coming compilation The more tracks the higher the royalty rate as it will be divided between more companies How many tracks are licensed from one company for the compilation In practice when licensing numerous tracks from one company, it is possible to lower the royalty rate as the licensee will have more tracks pro rated, thus he will make more money from the deal Clout138 This can work for both sides. For an extremely popular song the licensee will want more royalties, but if the compilation is an already well-known brand name, or it is mixed by a well-known DJ, there can be an argument to pay less royalty. Escalations In some cases the licensee will offer to escalate the royalty rate as sales gets over certain Break points

Payment period Accounting and payment of royalties is accounted for twice a year (this is a regular practice in the all of the UKs music industry) the royalties payable are calculated on June 30 and December 31 of each year and after being invoiced are paid within period 90 days. Within these 90 days the licensee will see if there are any returns of the product to the distributor and such returns will be deducted from the payment.

133 134

Pro rata means - in proportion to the number of songs featured on the compilation. PPD dealer price which is usually between 7.99 to 10.49 for a full price CD 135 Calculated according to 14% royalties of a 40 track Compilation at PPD price of 7.99 136 Calculated according to 25% royalties of a 15 track Compilation at PPD price of 7.99 137 As stated in a few interviews. (see appendix C) 138 Clout - the ability to influence.


The Evolution of Creating and Marketing Music Compilations

Advance139 With regards to compilations, an advance is an amount of money paid to the licensor in the time of the contract signing. The advance money is then deducted of the royalties owed to the licensor (this process is called recouping the advance). It is important to remember that the advance is non returnable but fully recoupable from prospective sales of the compilation. Meaning that companies will try to push for the highest advance as possible. Unless you are working with a major company or a label you already know well you will expect an advance, because YOU DONT KNOW WHO YOU ARE DEALING WITH. In is a sad but common practice for many small or new record companies, to set a compilation, license track, and then not account to the licensor. The problem is after licensing the tracks; the licensor cant know how much did the compilation really sell. In case of doubt the licensor can audit the license, but audit is an expensive business, and is only done when large sums of money are involved, and in these cases when there is enough money to go around most labels will account for their depts. But, when a compilation is not doing so well the licensee might prefer to keep as much of the money for himself (to cover the losses), and might even sell the compilation for ridiculous prices, just to get rid of the stock. In such cases the licensor will probably not get his due royalties (as small as they might be) and it will be not worth doing an audit. So many labels will go for the highest advance they can get. In addition Advances is a good way to create a fast cash flow, instead of waiting up to six month until the royalties are received. Calculating the advance (Dealer price) x (percentage of royalties paid to the artists) x number of copies (Number of tracks in the compilation) For example: if the dealer price of a CD is 7.99$ and the compilation will consist of 20 tracks and the royalty payment is 18% and there are estimation of 10000 sales Then the advance will be calculated as: 7.99 x 18 : 20 x 10,000 = 719$ 100 The advance is paid after complete signature of the contract and after the licensor has sent the relevant invoice.

With regards to compilations, an advance is an amount of money paid to the licensor in the time of the contract signing. The advance money is then deducted of the royalties owed to the licensor (this process is called recouping the advance). It is important to remember that the advance is non returnable but fully recoupable from prospective sales of the compilation. Meaning that companies will try to push for the highest advance as possible.



The Evolution of Creating and Marketing Music Compilations

Annex to the Heads of Agreements In addition to all the information provided by the Heads of Agreements an annex is attached to add and clear a few more important details The entire or part of the track listing planned for the compilation is normally attached, this comes so that the licensor can see exactly in which content is songs are being used. For example companies owning a hit song may oppose for it to feature on a compilation full of unknown tracks, because the compilation will be sold only upon the hit status of their song. Royalties on promotional copies - No royalty is payable for compilations, which are given away cost-free for promotion purposes, as bonus records or as buying incentives. Licensor is entitled to audit licensee's accounting documentation at his own expense once per year by a neutral and independent certified accountant140 Acknowledging the licensor this is a common practice, so in many cases it will not even appear on the Heads of agreement. Essentially the acknowledgment is written in the compilation CD sleeve together with the name and credits of the song in word such as Licensed courtesy of _______ or With kind permission of______. This acknowledgment is important for making sure listeners can identify the artist with is record company (so they will know who is releasing is artist album). Clearance of sampling in this section the licensor is stating that the licensed songs are free from any un-cleared samples and holds licensee harmless from claims of third parties.

In reality if a claim is made against the licensed song (for use of unauthorized copyrights) the MCPS will order the licensee to remove its compilation from the shelves until the dispute between the licensor and the original copyright owner is resolved. And this can mean a great lose of money for the licensor. Although such cases are rare it is always best to double-check that all copyrights are cleared. Final note After all this has been said, it is important to remember that: The entire agreement is subject to the actual use of the song(s) on the compilation. Meaning the licensee is not obliged to actually use the songs even after the Heads of Agreements has been signed.


Direct Quote taken from Heads of agreements arrangement of Sony music Germany.


The Evolution of Creating and Marketing Music Compilations

B.1 - Mechanical Payments In addition to the royalties paid to the record company and the artist for the use of the recordings, another royalty payments needs to be done. The mechanical royalty, paid to the writers of the song is paid directly to the MCPS, without the licensor being involved. The mechanical royalty rate in the UK for an entire album (compilation) is a maximum of 8.5% of the PPD price. The payment can be done under three schemes AP2 - Is administratively the simplest of these Agreements. Royalties are paid to MCPS on the basis of records to be manufactured. AP2A - Is similar to AP2, but allows the record company greater credit terms. AP1 - Provides for royalties to be paid quarterly in arrears on net shipments of product.141 The AP1 scheme is the hardest to achieve, it requires an individual accounting department in the record company and a long application procedure, and is essentially only given to the major record companies. The AP2 scheme on the other hand is a simpler process, and as the money is paid in advance, everyone manufacturing a music album can apply for it by filling a certain form that include all the relevant information.142

Quotes an information for this segment are taken from the MCPS website, see for more details. 142 Copies of, AP1, AP2, AP2A and AP7 application forms are available from:



The Evolution of Creating and Marketing Music Compilations

B.2 Heads of Agreements form. Courtesy of Sony music

From: Phone


Date: Number of pages to follow: Company:

IFax No:

RE:/BETR.: REQUEST FOR REPERTOIRE APPROVAL and NON-EXCLUSIVE LICENSE TO________________; Project: __________(working title), ________ Dear we are planning the release of the compilation project mentioned above. Therefore we would like to license from you,_______________(company name) on a non-exclusive basis the following track(s):

Details of the Licensing: Product Manager Configuration: Number of tracks: Release date: Territory: Method of Sale: Marketing: Term of the License: Royalty rate: Applied royalty basis (PPD) Packaging deductions: Sales estimation: Amount of promocopies: Additional provisions: Other: Deadline for consent / Expiration of request:

Important: Within the same deadline we request submittance of the master and label copy information


The Evolution of Creating and Marketing Music Compilations

The entire track listing planned for the project is attached to this letter. Bank details: Tax number and authority address:

This agreement is subject to the actual use of the track(s) on the project.

If you accept all terms set out in this letter and the Annexes we hereby ask you to countersign the letter and return to the following address:


Acceptance of letter Agreement and Annex (date, signature, stamp)




The Evolution of Creating and Marketing Music Compilations

Annex to Letter License Agreement, Sony Music acting as Licensee 1. GRANT OF RIGHTS LICENSOR herewith grants LICENSEE the non-exclusiv right to reproduce and distribute the recording(s) as set out in the Letter Agreement (hereinafter called RECORDING(S) together with other recordings exclusively for the compilation project as set out in the Letter Agreement (hereinafter called PROJECT) on Music cassettes (Mcs) and/or Compact Discs (CDs). The scope of the license is especially limited to the term, the methods of sale (distribution channels) and marketing and the territory (hereinafter called TERRITORY) as defined in the Letter Agreement. The further grant of the right of public performance, broadcast as well as the right to use or allow the use of the name, any professional name, likeness, biographical material and all images of any artist concerned for advertising and promotion purposes in connection with the PROJECT is also limited to the explicit provisions of the Letter Agreement. Any couplings of the RECORDING(S), any adaptation and grant of sub-licenses to third parties are only permitted, if LICENSOR gives his written approval, however, LICENSEE may grant a sub-license to affiliated companies within the TERRITORY without further approval, but such sub-licenses shall be limited specifically to the PROJECT. LICENSEE has the right to release the RECORDING(S) in connection with the PROJECT under his own trademark/label subject to the comments to be included in the label copy as set out in the Letter Agreement. 2. DURATION OF CONTRACT The transfer of rights as set out in fig. 1 is limited to the term of the Letter Agreement. After the term as set out in the Letter Agreement has expired, LICENSEE is entitled to sell off for a period of 6 months any records of the PROJECT which are on stock at this period of time. LICENSEE has to return to LICENSOR after expiration of the Letter Agreement any tapes provided to him by LICENSOR at LICENSEE's expense. 3. FURNISHING OF TAPES Upon LICENSEEs request LICENSOR will provide LICENSEE faultless tapes of the RECORDING(S) together with all required information for the release, furthermore, pictures, films etc. as well as information for the label credit. 4. REMUNERATION In return for the rights granted by LICENSOR, LICENSEE will pay a royalty on a royalty basis as set out in the Letter Agreement (if not stated otherwise this is the cleared price SONY MUSIC charges to its dealers (PPD) which, in case of club sales, is ascertained on the basis of the club price to its members) based on all records sold and not returned in the TERRITORY (net sales). The royalty basis is cleared by deduction of any donations, VAT or other sales taxes as well as by deduction of technical cost or costs for packaging of 10 % (LPs), 17 % (MCs) or 25 % (CDs) respectively. In case the licensed RECORDING(S) are coupled with recordings of third parties, royalties are paid pro rata titulis. If in certain cases the RECORDING(s) or a third parties recording is longer than 6 (six) minutes, royalties might be computed on a time basis, or, if not applicable (e.g. on data carriers without a certain playing time), on a storage capacity basis.


The Evolution of Creating and Marketing Music Compilations

No royalty is due for sound carriers, which are given away cost free for promotion purposes, as bonus records or as buying incentives. As far as the parties of the Letter Agreement have agreed on an advance, LICENSEE has to pay to LICENSOR, this advance shall be non-returnable but fully recoupable and payable after complete signature of this contract and receipt of a corresponding written invoice from LICENSOR. LICENSOR is in charge of payment of all royalties due to artists and other third parties. In case such third parties claim royalties vis-a-vis LICENSEE, LICENSOR will hold harmless LICENSEE. 5. ACCOUNTING AND PAYMENT Accounting and payment of royalties will be effected as of June 30 and December 31 of each year within a period of 90 days. According to German tax law any royalty- or possible advance payments to LICENSOR are subject to withholding tax. LICENSEE is legally obliged to withhold such tax from any payments unless LICENSOR provides LICENSEE with a completed and signed tax exemption form duly certified by LICENSOR's local tax authority and accepted by the responsible tax authorities of the Federal Republic of Germany. LICENSOR shall inform LICENSEE about any change with respect to his tax situation. LICENSEE is entitled to create per accounting period a reasonable reserve for returns. Such reserve shall be liquidated with the following accounting period, however, maybe re-created if need should arise. LICENSOR is entitled to audit LICENSEE's accounting documentation at his own expense once per year by a neutral and independent certified accountant. 6. COPYRIGHT PAYMENTS LICENSEE is obliged to clear copyrights and pay mechanical copyright fees. LICENSOR warrants that he is entitled to freely dispose of the RECORDING(S) and, herewith, holds LICENSEES harmless from claims of third parties. 7. PROMOCOPIES After the PROJECT has been released LICENSEE shall be obliged to send to LICENSOR promo copies of the compilation in an amount as set out in the Letter Agreement. 8. MISCELLANEOUS Any amendments of this agreement are only valid if confirmed in writing by both parties. Exclusive venue for all disputes arising out of this agreement as well as place of performance is Berlin, this contract being subject to German law.


The Evolution of Creating and Marketing Music Compilations

Appendix C Interviews
Some of the information used in this dissertation is taken from interviews conducted with different persons in compilation related jobs in the music industry. Altogether nine interviews were made and recorded. Each is between 20 to 30 minutes long, and as so it was impossible to write a transcript of each interview, as this would have resulted in an appendix that would have been way to long to be attached to this dissertation. Therefore, the transcript of the interviews will be in a form of MP3 files that can be found on the attached CD The following is a list of the people interviewed plus a short overview of the companies they represent. Corrado Dierna General manager of IRMA Records UK. Interview conducted at the IRMA office on the 18/03/04. Irma records is an Italian company with offices in Italy, N.Y. and London, IRMA Records was established in 1988, through its many sister labels the company specializes in different aspects of dance music, from funk to house and chill out, while focusing on building its own artist repertoire. Apart from licensing its music to other companies, IRMA is well known for it compilation series (such as House of IRMA, IRMA Unlimited and others) which are mostly based on the music of its signed artists. For more information see: Austin Wilde Founder and general manager of WHOA Music. Interview conducted at Austins home on the 01/04/04 Established in 2001 as a music consultancy and compilation production company Whoa as since worked with record companies such as AZULI records to release DJ based compilation series such as Another Late Night and Another Fine Mess For more information see: Darren Ensom General manager of Stoked Music LTD. Interview conducted at a busy Starbucks coffee shop on the 11/04/04 Stock music (1995) is a company that deals in many aspects of the music industry (manufacturing, distributing, production, artist management, music licensing and consultancy), among others Stocked music is responsible for the music licensing for Jockey Slut magazine and many dance oriented compilations for labels such as SuSu, React, Universal, and others. For more information contact: Elliott Tucker Assistant licensing manager at Demon Music Group. Interview conducted in a busy Nero coffee shop on the 20/04/04 Demon music group specializes in catalog licensing and handling, the group is made of several smaller labels such as Music club Crimson Unisex and Harmless each releasing a different genre of compilation, from budget compilation to DJ based compilations, the interview was based upon licensing in and out issues For more information see:


The Evolution of Creating and Marketing Music Compilations

Carrie Miller Licensing manager for Hed Kandi. Interview conducted in a busy restaurant on the 04/05/04. Hed Kandi is a leading compilation label, which account for nearly 1% of all compilation sales in the UK. The company established in 1999, has succeeded in merging lifestyle and music, by issuing trendy compilations with artwork and design that represent a rich and decadent lifestyle. Recently Hed Kandi began releasing material by its own-signed artists. For more information see: Ralph Moor - senior music editor @ Mixmag magazine. Interview conducted in the Mixmag offices on the 04/05/04 The UKs leading dance magazine, first established in 1984 by DMC, then acquired by the EMAP publishing house (who also owns, Kiss100, Q magazine, Smash hits magazine, among others). Mixmag magazine is known for releasing mixed covermount CD compilations with every issue, Ralph as the music editor is in charged off the production of these CDs, and all music reviews. For more information see: Leon Oakey General manager Classic Records. Interview conducted in the offices of Classic records on the 10/05/04 Classic is an independent label specializing in house music, the label has a catalog of some of house music key artists (Derrick L Carter, Tiefswartz, Doc Martin and others). Apart from licensing its music to other companies, classic is releasing several series of DJ based compilations For more information see: Simon Marks (Family recordings) and Alex McCnut (Music mix) Universal Interview conducted in the offices of Universal records on the 17/06/04 Universal records is the biggest seller of compilations in the UK, its market share comes to over 25% of all compilations sold, apart from its compilation TV advertised department (UMTV) universal is also hiring independent music consultants to develop new concepts of compilations which will be more credible but will still be mostly based on universals own music catalogs. Simon Marks used to be the general manager of AZULI records (In itself a big compilation producing company). Alex McCnut runs Music Mix, a music consultancy company, which has issues the concepts for many successful compilations For more information see: And


The Evolution of Creating and Marketing Music Compilations

Appendix D - Music to the Masses Compilations, Live Performance & Radio

Another important aspect to acknowledge is the performance and play of music in music venues. From the backroom of pubs and saloons to traveling fairs and Pleasure Gardens of the 15th-18th century to the music halls of the 19th century, enjoying music was a popular leisure time activity. These venues: Brought together a variety of different acts which together formed an evening of light hearted entertainment 143 The focus on a variety of acts insured that a wide repertoire of music was played and performers had to stick to their best to keep the crowd happy. The Jukebox - In the 20th century, when electrical reproduction of music was able to replace live performers, an even wider range of performers/songs was on offer to the clientele. The Jukebox invented in 1889 by an American named Louis Glass became a popular recourse for music between the 1920s and 1960s, by the end of the 1930s they were over 500,000 Jukeboxes in pubs, clubs and restaurants around America, each acting as a hits collection of 40 of the most popular tunes in the area. In fact it was the Jukebox that conceived the idea of the top 40 singles chart that we use to this day144. Discotheque - While America discovered the Jukebox, France gave birth to the discotheque a nightclub for dancing to live or recorded music as Webster dictionary describes it, but in fact the word discotheque is taken from the French word for library Bibliotheque suggesting that the discotheque is a record library, a place in which people can explore the word of music, soon the discotheque gave birth to a new form of performer the DJ. Radio Definitely the biggest compilation of music source ever. With hundreds of stations playing 24 hours a day of music of all genre and periods. Radio first appeared in 1907 but only started to be household equipment in 1922. This was also the year that the BBC went on air. As a public medium and as a promotional tool, radio had to rely on playing a wide range of different artists to suit different tastes, hence radio had to relay on playlists that were basically compilations of various programs and music. Eventually this gave listeners the possibilities to discover many new artists and musical genres, and encouraged more record sales. I am told by gramophone dealers that if broadcasting is affecting the sales of records, in any way, it is affecting them favorably, probably because it is spreading musical taste and awakening the desire to domesticate a selection of the most attractive of the works wirelessly heard145

143 144 Information taken from, The Guinness book of recorded sound pages 87-89 & Last Night A DJ Saved My Life, The History Of The Disc Jockey pages 47, 53-55 First Book Of the Gramophone Record, Dr Percy A Schooles 1927 oxford publishing



The Evolution of Creating and Marketing Music Compilations

Appendix E - Newspaper Cover mounts

The Battle over readers attention between UKs national newspapers has led them to add extra bonuses to the circulation of their weekend papers. From discount vouchers and scratch cards to books and special offers, It seems as if the publishers of these papers are unable to stop issuing these freebies in fear of losing the battle to the competition. One of the more interesting (and relevant to our study) freebies given is the CD cover mount compilation, which can come under many different themes and genres. Given free with newspapers that are sold for as little as 30 pence146 and up to 1.5 for a weekend edition, cover mounts compilations are an interesting breed; after all how can a newspaper license the music, produce the CD and distribute it with the paper and still make a profit? To answer this question there are a few points that need to be looked at. The first is that newspapers have little to do with the production of the CD, in most cases the marketing department of a paper will contact or be contacted by an outside company that will pitch a concept for a compilation, and offer to do all the work (licensing, manufacturing etc) for an agreed fee. So what is the newspaper actually paying for? 1 Payment for the recordings -In general, newspapers try not to pay the record labels for the master recordings147. The claim is that featuring a song on a cover mount compilation (that will be distributed to hundred of thousands households) will give major exposure to the artists featured and will help boost their record sales. This approach will usually be endorsed by independents, or majors trying to break a new act, or promote a new release. In other cases where a newspaper wants to issue a compilation of already established artists with no new releases coming148 the newspaper will set a fixed budget (usually around 50,000) that will be used to cover the licensing of the master recordings, with this money the producer of the compilation will either approach different companies, licensing only a few tracks from each one, or license the entire compilation from the catalogs of one company. It is pretty much the company approaching us with an offer and we see what songs we can give for this money says Grant McLennan from Sony music special markets a division of Sony music that deals with the exploitation and licensing of older back catalogs to customers such as big newspapers. Of course the more songs a newspaper will license from one record company, the better the deal it will get.
- Mid-week editions of the Mirror and Evening Standard are sold for 30-40 pence and sometimes featured a free cover mount CD 147 However a written consent from the record label that own the masters is necessary for the use of the recording. 148 This is mainly the case with the big circulation papers such as the Mail on Sunday, which is often releasing them compilations such as Disco Greats or giants of rock.


The Evolution of Creating and Marketing Music Compilations

2 - Manufacturing costs as these compilation are manufactured in very large quantities and often in duplication plants in eastern Europe, the manufacturing price can be as little as 10-15 pence per CD. 3 Distribution it is needless to say that newspapers have a huge and effective distribution fleet that is operating on a daily basis to distribute the newspapers all over the UK, so there is no extra coast for the distribution of the CDs 4 Mechanical royalties in many cases the sole revenue that the artists or writer of the song makes through these compilations is via the mechanical royalties. In the UK the mechanical royalties are paid to the MCPS that works on the behalf of most of the major publishers. The MCPS have issued a unique scheme to deal with payments for cover mount CDs, the main conditions of the scheme (known as AP7N or AP7 for magazines) as applied to audio CD compilations are149: To obtain permission for the use of the sound recording for the owners of the master recordings Reviews of the music Reviews must strictly consist of a commentary in respect of each individual musical work and/or track on the Cover Mounted Product, including a reference to the album(s) available for retail sale from which the recordings have been taken150. This condition is set to justify the promotional aspect from the part of the newspaper, but a look at different publications will show that the reviews can be as minimal as a few words and up to more elaborate reviews with photos of the artist. Products must be affixed to the publication. No third party association, whether in the form of advertising or sponsorship on the packaging or discs themselves, shall be permitted under the AP7 or AP7N licensing schemes. This restriction extends to any branding that is not of the publication, owners of the sound recording or copyright owners of the musical works151. This condition is to ensure no association between the musical works and a brand is made (as use of music for advertising is a much more expensive business). Copyright awareness statement All products licensed under AP7 and AP7N must carry a copyright awareness statement that consists of both the: - British Music Rights respect the value of music logo & - Strap-line The producers of this CD have paid the composers and publishers for the use of their music.

These requirements must be displayed together, without separation, and placed on either the product itself and/or the packaging sleeve. This condition is a relatively new
3 - All information is taken from the MCPS AP7 and AP7N licensing schemes for Cover Mounted Products See appendix for the full scheme. 150 - IBID 151 IBID


The Evolution of Creating and Marketing Music Compilations

one; it comes to keep the public aware that although they have got the CD for free, the newspaper paid for the music, and therefore music should not be regarded as free goods (this is, of course, extremely important today with Internet piracy and free downloads) And finally the most important condition: Money Royalty payment under the AP7N scheme is as follow- 6.50% of 50% of the cover price, (subject to a minimum of 1.10) are paid for the first 15 songs (an extra 6.5% for every additional song). This will be multiplied by the number of CDs manufactured.

That means that a 15 songs cover mount CD of a mid week paper sold for 30 pence will pay for the use of the songs. 6.5% * 0.55p * 17.5% = 4p per CD
VAT Half of the minimum price required

This leaves less than a third of a penny for each songwriter, and although this is probably the worst-case scenario better ones will result in half a penny per song. So how will the writers of the song see any money out of it? Well the answer lays in the vast quantities manufactured. The Daily Mail sales about 3.5 million copies on a Saturday152 4p divided by 15 songs multiplied by 3.5 million copies = 9331 per song. Now thats not so bad, of course this money will go to the MCPS who will take its minor share, and send the rest to the publisher that will split the money with the writers of the song (normally the deal is 50-50) Breakdown So we have seen that for the master recording the record company and artist can get between 0 - 3500 + free promotion The owners of the publishing rights get up to 9300 And as for the newspaper, if we add all the costs of producing the cover mount. It only comes to less then 25 pence per CD And for that, the newspapers normally get a 10% boost in sales153, a boost that in some cases will cover the entire cost of producing the compilation

Information received from Barry Allsop Circulation Sales Manager Daily Mail & The Mail on Sunday. (


According to information received from IBID & Nick Balfe marketing manager at The Guardian


The Evolution of Creating and Marketing Music Compilations

Appendix F Greatest Hits & Soundtracks

F.1 - Greatest Hits Although these products are based on the songs of only one artist, they are still regarded as a compilation as they are A compilation of songs from an artists prior albums, perhaps with one or two new songs154. Greatest hits are very good selling compilations. In fact the best selling Album ever155 is The Eagles Their Greatest Hits 19711975(Elektra) selling over 28 million copies worldwide. In addition there are other seven best of albums in the top 40 best selling albums in the word ever chart. Originally greatest hits albums were only issued to revive an artists career when it was past its prime. But in the 70s compilations of the likes of Elton John and ABBA sold millions while the artists were at their prime. Ever since, companies are releasing greatest hits compilations at any stage of an artists career. In some cases when the artist has not set a limit to how many best of a record company can issue on his behalf. There could be more compilations of the artist than original studio albums. Ironically in recent years some companies released best of compilations based on compilation series, the best of caf del mar(mercury) & the best of sampled (Virgin) are two good example to this new type of music compilations.

The best of Caf Del Mar (Mercury)

The best of sampled (Virgin)

All You Need To Know About The Music Business, page 124 According to various best selling web sites such as: and



The Evolution of Creating and Marketing Music Compilations

F. 2 Soundtracks From various artist compilations, the most successful releases of all times are definitely soundtracks. This makes sense as soundtracks bridge the gap between the compilation and the costumer attachment to a brand in the best way. Movies have a large following that will know about the soundtracks music from watching the film, and with the combination of good directing and editing movies have a way of making music sound better (much as video clips). Therefore whoever saw the movie and liked the music (or even just the movie) might buy the soundtrack. On top of that, big blockbusters will often commission artists to record songs especially for the film, thus giving an added value to the soundtrack, and if a song becomes a huge hit, the soundtracks way into multi platinum status is guaranteed.
Soundtracks have been selling phenomenally well for over 40 years

Best selling Soundtracks of all times



Taken from:



The Evolution of Creating and Marketing Music Compilations

Appendix G - Additional Label Information

Established in late 1993 Azuli records is an Independent dance label with a back catalog of over 150 singles. However it is for its compilations that Azuli is best known in the dance community. Azuli is responsible for many dance compilation series, some of which it releases by itself while other are a joint venture between Azuli and WHOA- a small independent label and music consultancy that is pitching concepts for compilation to company such as Azuli. WHOA and Azuli are responsible for two series of compilations Another Late Night which follows the same vain as DMCs Back To Mine but with the use of different artists as compilers. Another Fine Mess which is a DJ based party Mix. Azuli by itself is responsible among others to the Choice series in which respected DJs introduce what they believe to be the best music their inspiration in a certain genre. Another series released by Azuli is the Space series which carries the brand name of the famous Ibiza club, Space.

Since 1996 Boxed is responsible for releasing the Global Underground series of compilations, in which superstar DJs such as; Sasha, Paul Oakenfold, Danny Tenaglia, Deep Dish and John Digweed, Showcase recent sets from particular cities from around the world. Other releases include NuBreed" - showcasing up-and-coming DJ's. "Lights Out" with DJ Steve Lawler. Electric calm & After Hours chill out series. And recently 'Involver' With DJ Sasha - a project in which the DJ re-mix tracks he likes, especially for the compilation Best year - In 1999 GU reached its peak sales reaching 0.5% of all compilation sales in the UK (around 250,000 units in the UK plus successes worldwide)


The Evolution of Creating and Marketing Music Compilations

Established in1990. React grew into a successful and long-running independent dance labels, focusing mainly on several successful series of compilations. The best known from these are: Reactivate since 1991 this series has specialized in Techno, Trance and Rave music. Most of the early releases in this 18 volume series were unmixed, with later releases offering a two CD format (one mixed one unmixed). Reactivate 10 is the best selling of the series with 40,000 units sold in the UK. Caf Del Mar based on the music played by DJ Jose Padilla at the famous Caf Del Mar in Ibiza, the first three volumes of this series were released by React (the first one in 1994) before changing hands a couple of times (in 1997 it moved to mercury records & since 2002 it is released under the Caf Del Mar label). The series is one of the first chill out compilations and it gained worldwide successes (volume six is assumed to have sold nearly a million copies worldwide while volumes 1-3 are reported to sell in the excess of 220,000 each)

Established in 1983 as a DJ music specialist, releasing special DJ friendly 12 and inventing the term Megamix to describe the mix of records into a none-stop medley. In 1984 DMC started publishing Mixmag magazine and it is under this name that the first legal DJ mix compilation was released in 1991, the Mixmag live series eventually released 20 volumes covering DJ from different style of dance music. When DMC released a new weekly dance magazine called Seven the series changed its name to 7 Live In 1998 DMC were the first to bring a new concept in DJ compilation mixes, a chill-out after hours mix series which was named 'Back To Mine, the series whose mixed by DJs, Producer or artists, gained credibility (NME! Magazine reviewed Back to mine - New Order as the best mix compilation ever) and commercial success (Back to mine Groove Armada selling over 60,000 units in the UK). The series also inspired many other companies to release compilations based on inspirations or personal choices of known music figures (see Azuli / Whoa for some examples) Other compilation series out on DMC include: United DJs of America first released in 1994, the series showcase American DJs and producers Under The Influence a series of personal choices from Rock oriented artists such as Morrissey, Bob Geldof, and Paul Weller.

Other known series out on react include:

Real Ibiza Chill out compilations that replaced Caf Del Mar Good Times With DJ Norman Jay based on the famous Notting Hill carnival. Bugged Out Based on a Club Night and mixed by different DJs each time In addition many other series and one-off compilations were released by React every year until recently in June 2004 the company applied for bankruptcy. But re-emerged as Resist records Best year in 1996-1998 react represented 0.8% of compilation sales in the UK


The Evolution of Creating and Marketing Music Compilations

STUD!O K7 is a German based label with offices in London. Originally the company started as a graphic animation company, specializing in visuals for dance events. In 1993 K7 introduced a new breed of compilations called X-MIX, the concept of these was to use 70 minutes DJ mixes of Techno music156 accompanied by digitally generated video clips, and to sell them as a video or a CD. The series became well know for quality techno music and even MTV was playing segments of the mixes on its late night programs. By the end of 1995 K7 saw that the interest in the music was beginning to outstrip the video clips and planed the beginning of a new acclaimed DJ series called DJ KICKS which featured mixes from a variety of artists from different genres157.

Its hard to think of a time when editing and licensing mixes were new concepts Tim Fielding JDJ founder and director158 Established in 1993 Journeys by DJs was one of the first labels to release DJ based compilations in the UK, and was the first to release mixes of some of todays best known DJs, among the DJs that have mixed for JDJ are: Judge Jules, Danny Rampling, Paul Okenfold, John Digweed, and ColdCut whose 70 minutes of madness compilation is considered by many dance critiques as the best DJ mix ever. In 1998 the label stopped its operation but was back in 2001, and is still running today

With DJs including big manes such as: Laurent Garnier, Richie Hawtin, DJ Hell, Paul van Dyk, Dave Angel, and more. 157 DJs who released mix compilations on DJ Kicks include: Carl Craig, Kruder & Dorfmeister, Nightmares On Wax, Stereo MC's, and Kid Loco 158 Quote taken from



The Evolution of Creating and Marketing Music Compilations

APPENDIX H Artistic Compilations - Additional Information

Richie Hawtin DE9: Closer to the Edit(Nova mute records 2001)

With "DE9: Closer to the Edit", Artist, DJ, and producer Richie Hawtin AKA Plastikman reconstructed the DJ mix album even further. By using Decks samplers and effects to tear the skin and the flesh from the tracks until there's just a skeleton left, which he reassembles into a kind of Frankenstein's robot.

Hawtin describes this unique process "I recorded, sampled, cut and spliced over 100 tracks down into their most basic components. I ended up with over 300 loops, ranging in different lengths. I started to recreate and reinterpret each track and then put the pieces back together, as if an audio jigsaw puzzle using effects and edits as the glue between each piece".159 Soulwax - 2 Many DJs As heard on radio Soulwax part 2 (PIAS Records 2002)

Its about 62 minutes long and there's 45 (or is that 46?) tracks on it. It took seven long days and nights to cut, edit, mix and re-edit it all together. We have taken our favorite bits from our favorite records and put them together to create something new and special.160 This compilation is essentially a mix of bootleg mixes, in which vocals of one song are laid over the music of another, creating very interesting results. Sasha Involver (Global Underground 2004)

Involver blurs the lines between the DJ mix compilation and the producer / artist album. Every track is an original Sasha remix or re-creation that has been exclusively recorded as an original piece for this project. Mix albums and remix albums are often compilations of recently amassed work but the vision for Involver was to build a project from the ground up, so Sasha looked at various records he admired and loved and wanted to re-create. Involver turned out to be both the reinvention and application of a wholly new array of software and hardware. By virtue of the tools and processes he created, Sasha was able to step into the studio and try things as if he was working in a live environment, just as if he was mixing tracks in a club. Once again this is the sound of Sasha staying one step ahead of the pack.161 Other special releases: Here are a couple of other compilations that shows how diverse the creative possibilities are. Groove Armada Doin' It After Dark (Ragbull Records2004) Combines a DJ set together with live drumming and percussion Erlend Oye DJ-Kicks (K7 2004) combines a DJ set together with live singing of other recognizable songs
159 160

Information, and Quotes taken from Information, and Quotes taken from 161 Information, and Quotes taken from


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Articles Baudoin M. The Tape Recorder. Article available from; Beets G. Untitled article. Published in 04/may/2001 available from: music_feature2.html Berman A.R. ALL TOGETHER NOW: Licensing Music for Films Article available from: Colfin B.E. & Jacobson J.E. Compilations and Duplication Article available from: G. D Powell. All Clear? - A Music Clearance Primer. Published in "International Documentary Magazine", May 2003 J.D. Taylor. Ask The Lawyer: Licensing Content for the Web Published in Streaming Magazine February 2001. Also available from Miller C. COLLECTORMANIA! The Original Hits, The Original Stars - Collecting K-Tel Albums. Article available from: Sarah Boden. Untitled article. Published in The Press Gazette 20 feb 2004 Watts D .Hed Rush. M8 Magazine January 2004

Books Bagehot R. (1994). Music Business Agreements (3rd edition). London. Sweet & Maxwell Publishing. Burgess, R.J. (2002). The Art of Music production. London. Omnibus press. Brewster B & Broughton F. (1999). Last Night a DJ Saved My Life, The History of the Disc Jockey. London. Headline book publishing. Brewster B & Broughton F. (1998). Ministry of Sound: The Book. London. Headline Publishing. Cauty, J & Drummond, B. (1988). The Manual (How to have a number one the easy way). London. KLF Publications. Clifton R & Simmons J. (2003). Brands and Branding. London. Economist Books.


The Evolution of Creating and Marketing Music Compilations

Dearling R. (1984). The Guinness Book of Recorded Sound. London. Guinness Superlatives LTD. Gilbert, P (ED). (1995). The Complete Introduction to Record Collecting. London. Diamond publishing group LTD. Jasper T. (1980). The 70s Book of Records. London. Macdonald Futura Publishers LTD. Krasilovsky W & Shemel S. (2000). This Business of Music (8th Edition). New York. Billboard Books. Lathrop T & Pettigrew J. (1999). This Business of Music Marketing & Promotions. New York. Billboard Books. Lebrecht N. (1992). The Complete Companion to 20th Century Music. London Simon & Schuster LTD. Longman Dictionary of Contemporary English, New Edition, Pearson Education Limited, Essex, 2003. Martland P. (1997). EMI the First 100 Years. London. B.T Batsford LTD McAleer D (Compiler). (1995). The Warner Guide to UK & US Hit Albums. London. Carleton Books LTD. Passman S.D. (1991). All You Need To Know About The Music Business. London Penguin Books. Sanjek R. (1988). American Popular Music and its Business, The first four hundred years, Volume 2 (1790-1909). New York. Oxford University Press. Sanjek R. (1988). American Popular Music and its Buisness, The first four hundred years, Volume 3 (1900-1984). New York. Oxford University Press. Dr Schooles P.A. (1927). First Book of the Gramophone Record. Oxford publishing. Timothy T.D. (2001). Strange Sounds. New York. Routledge publishing.


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Industry Publications BPI Market Information Sheets numbers 209 233 (Courtesy of the BPI library) BPI Statistical Handbook BPI Statistical Handbook BPI Statistical Handbook. BPI Statistical Handbook BPI Statistical Handbook BPI Statistical Handbook BPI Statistical Handbook BPI Statistical Handbook BPI Statistical Handbook BPI Statistical Handbook BPI Statistical Handbook BPI Statistical Handbook BPI Statistical Handbook BPI Statistical Handbook BPI Statistical Handbook BPI Statistical Handbook BPI Statistical Handbook 1976 1979 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 BPI Publishing BPI Publishing BPI Publishing BPI Publishing BPI Publishing BPI Publishing BPI Publishing BPI Publishing BPI Publishing BPI Publishing BPI Publishing BPI Publishing BPI Publishing BPI Publishing BPI Publishing BPI Publishing BPI Publishing

(All BPI Statistical Handbooks are available from the BPI library)

Legal Documents Heads of Agreements Arrangement sheet, courtesy of Sony Music Heads of Agreements Arrangement sheet, courtesy of React Records UK Heads of Agreements Arrangement sheet, courtesy of Classic Records UK

Magazines DJ Magazine. Compilation reviews Edited By Stokes H. Highbury House Communications. London. Mixmag Magazine. Compilation reviews. Edited By Moore R. EMAP Publishing London. Music Week - All issues November 2003 July 2004. Published by United Business Media. London T3. August 2004. P. 42 47. Future Publishing.


The Evolution of Creating and Marketing Music Compilations

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The Evolution of Creating and Marketing Music Compilations,1367,16005,00.html


The Evolution of Creating and Marketing Music Compilations