O2’s sponsorship of the Academy Music Group gives it dominance over the entire UK live music arena and, some say, could leave other operators’ customers out in the cold.
Last week, the mobile operator announced that it is to sponsor all 11 AMG venues, ending AMG’s five-year relationship with Carling (MW.co.uk November 6). The deal will see O2 customers gain priority tickets to gigs at the venues, which are majority-owned by Live Nation with Metropolis Music and SJM Concerts, as well as other Live Nation events across the country.
The move could boost O2’s reputation beyond expectation, enhancing its entertainment credentials, yet also alienate customers of other service providers.
O2 marketing director Alistair Johnston admits that the brand is “mindful” of being unfair to other mobile operators and customers. However, he says the brand is working with Live Nation to make some applications available to all phones – such as ticket downloads. He adds that, while the brand aims to promote the benefits of being with O2, “we don’t want people hating us”.
Johnston says mobile phones resonate with the growing live-music audience, as they already use them to take photos and videos during gigs. He adds: “Some people even watch the gig through their phones.”
And Jack Horner, founder of music sponsorship agency Frukt, says mobile goes even further, as it plays a role in the build-up, and actual event experience. He adds: “It’s not just the event, but before and after the event. That differentiates it from sectors such as food and fashion.”
Live Nation international president of music marketing partnerships,Simon Lewis, also sees a smooth transition from beer brand to mobile. He says: “It’s no different from any brand sponsoring anything – this is not just for O2 customers.”
And he believes O2’s move into music and entertainment sponsorship is a wise one. Horner says: “It has invested over a long period of time and it has brilliant partners.”
In fact, Horner says O2’s brilliance comes from sewing up “all the credible partners” in the UK. The only area he says it hasn’t yet touched, and should, is the digital arena. He adds: “If you look at innovation in the festival atmosphere, such as programme guides, you would imagine it would try to do this.”
The mobile operator has a multi-level strategy. At the top end, it has The O2, formerly the Millennium Dome. It also has the Wireless Festival and now the AMG venues. Horner says this “nice pyramid” will give the brand power to promote new bands, as well as larger ones at The O2.
There is also an element of community creation in O2’s strategy. Live Nation senior vice-president of music marketing partnerships in the UK, Jim Campling, says the new deal aims to create a “better community” for local venues, and encourage gig-goers to “go early” and “stay late” and communicate with each other. He adds: “A telecoms brand is perfect for that.”
And not only is the move an evolution of its music strategy – it is a shift towards gaining new customers. A source asks: “O2 has always concentrated on retaining customers. Is this an acquisition strategy or a retention strategy?”Johnston admits the brand has “bold growth plans” and adds: “Yes, we are looking to gain new customers. We have done well in the market and now we want to take that even further.”