Brand advertisers are boosting their ad spend on digital music platforms including Spotify and Last.fm as increasing numbers of consumers shun illegal downloading in favour of legitimate online music. The proliferation of 'unlimited download' packages from companies such as Virgin Media, Sky and Nokia is also increasing the market for advertisers by tempting consumers away from P2P file- sharing sites to subscription services.

The shift follows a report from music industry body the IFPI, which shows that 72 per cent of illegal downloaders are willing to 'go straight' if the right services are made available.

While illegal downloading remains rife, the tide appears to be turning, with brands including Sky, Samsung and MP increasingly tapping into the growing popularity of legitimate music platforms.

"Advertisers like Spotify because there is zero wastage and it's fully accountable," claims Jon Mitchell, Spotify's UK sales director. "As well as offering the accountability of online advertising, Spotify also brings the targeting capability of radio."

Rowntree's Randoms is a brand that you would not ordinarily associate with music but, thanks to Spotify, the confectionery brand has created its first association with music fans. The Rowntree's Randoms playlist on Spotify launched in May, and is proving hugely popular with fans.

Car manufacturer Fiat has also partnered with Spotify to launch a collaborative playlist, enabling users to contribute track suggestions to a branded list. A Twitter feed provides real-time updates on the songs added to the playlist and enables Fiat to join conversations relating to its new Fiat 500C.

"Spotify is popular among trend- setting, young men and women," says Chiara Camandona, head of digital marketing at Fiat UK."The rapid growth of the social music service also allows us to reach new authences every day."

While Spotify, Last.fm and other digital music platforms are providing new ways for advertisers to target music fans, slowly but surely bands are also using the web to reach out to authences. Radiohead has long experimented with giving away music online for free, but it has now abandoned CD albums altogether, signalling a new age in which the web becomes the main distribution platform for artists.

With this in mind, growing numbers of record labels are looking to partner with brands online. The IFPI reckons advertising will increasingly replace revenue lost through physical CD sales.

"Record companies are building an economic future based not just on selling music online but on monetising consumer access to it," says John Kennedy, chairman and chief executive of the IFPI.

Traditionally, record labels have done everything in their power to keep the internet at arms length. Now, however, the growth of legitimate online music services means that where once the music industry and the web didn't need the other, they are fast becoming interdependent.

Copyright Haymarket Business Publications Ltd. Sep 2009

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