June 13, 2007 / 4:33 PM / 12 years ago

Warner Music, Violator in artist management venture

By Yinka Adegoke

NEW YORK, June 13 (Reuters) - Warner Music Group Corp. WMG.N, said on Wednesday it was teaming up with Violator Management to create new revenue by building relationships between artists and consumer brand names.

The joint venture between the world’s fourth-largest music company and Violator, the management company behind rapper 50 Cent, will be known as Brand Asset Group. Chris Lighty, chief executive of Violator, will also become CEO of Brand Asset.

Warner said the new venture will work closely with its senior executives to identify sponsorship and brand extension opportunities for its artists, but will not work exclusively with Warner-signed acts.

Warner said Lighty has been especially successful in building brand relationships with hip hop artists, including 50 Cent, who is signed to Universal Music Group’s Interscope label and has numerous deals including video games, a clothing line and an investment/endorsement partnership with Glaceau’s Vitamin Water. Other acts Violator manages include Sean “Diddy” Combs, Missy Elliot and LL Cool J.

The move by Warner to take a more active interest in artists’ marketing potential is a sign of a shift in attitude by music companies to find other ways to make money as CD sales continue to decline and digital music sales fail to make up for the shortfall.

The third-largest music company, EMI Group Plc EMI.L, has signed far-reaching deals with acts including Robbie Williams and Korn in recent years.

Typically, a music company would invest in building an artist’s brand and popularity through a range of promotions, such as videos and radio, to boost record sales and licensing of songs to various sources.

However, an artist management company can build more diverse revenue streams by overseeing everything from touring and public appearances to video games and advertising.

“As a music company, my view is we’ve been far too narrowly defined,” Warner Music Chief Executive Edgar Bronfman told a conference earlier this month.

“The music industry is growing, the record industry is not growing. We’re beginning dramatically to accelerate our view of what our business model is,” he said.

As well as recorded and publishing revenue, Bronfman said his company will encompass businesses including advertising, sponsorship, artist management, touring and ticketing.

According to reports in the British press last month, music companies including Warner and Universal Music Group are among those to have shown interest in buying Sanctuary Group Plc. SGP.L, the troubled music group that manages Elton John, James Blunt and The Strokes.

((Editing by Maureen Bavdek; e-mail: yinka.adegoke@reuters.com Reuters Messaging: Yinka.adegoke.reuters.com@reuters.net; +1 646 223 6081)) Keywords: WARNERMUSIC BRAND/

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