Aug. 7 (Bloomberg) -- Manchester, home to The Smiths, Oasis and The Verve, is turning to its roots to lure concertgoers to the northern English city by teaming with another rock ’n’ roll brand: MTV.
The Manchester City Council agreed to host a concert for free next month with the Viacom Inc.-owned channel. MTV will bring the stars and film the event to screen via its online, mobile and pay-TV platforms. Manchester, into the second year of a 170 million-pound ($265 million) austerity program, will get a 30-minute program highlighting the city’s attractions.
The partnership adds to efforts by MTV, which began in 1981 with the clip “Video Killed the Radio Star,” to use the pull of its brand to attract tourists. MTV, which has brought Lady Gaga, Justin Bieber and Snoop Dogg to concerts in Malta, Malaysia and Mexico, said a fifth of all travelers are aged 16 to 29 and they account for $136 billion in annual revenue, citing the World Youth Student & Educational Travel Confederation.
“Effectively MTV is getting governments to market their brands,” says Mark Mulligan, an independent music industry analyst and former vice president at Forrester Research. “It’s incredibly smart brand extension through these concerts.”
It’s not only the hosts and MTV which benefit as artists have realized that these shows can help their careers, said Bob Bakish, chief executive officer of Viacom International Media Networks.
“In the early days we had to do some arm-twisting to get artists to perform in Malta while now it’s become something desirable to do,” he said in an interview. Lady Gaga, who has won five Grammy awards and was the music industry’s best-paid woman last year with about $90 million, according to Forbes, attended Malta as a relatively unknown artist in the early days and asked to return when she had become a superstar, he said.
MTV’s foray into music tourism started in 2007 with the first MTV Isle of Malta concert and the annual event has since featured pop singers including Nelly Furtado and rappers Flo Rida and Will.i.am. It’s become the largest free open-air concert in Europe and drew 50,000 fans in June, with sponsors like Unilever’s Cornetto ice cream brand and Luxottica Group SpA’s Ray-Ban sunglasses.
“You will see this business continue to grow for us with returning franchises,” Bakish said. Through multi-year deals with tourism authorities, MTV is able to “establish a hip destination that can move the needle on music tourism.”
Viacom’s media networks unit, which owns MTV, Nickelodeon and Comedy Central, contributed 92 percent of operating profit in the year ended September 2011. While the company, which also holds the MTV Video Music Award show each year, is expanding its concerts business, it’s also been hit by the global economic crisis. Viacom last week reported an 7 percent decline in third-quarter profit.
The concerts “drive a growing category of business for us, the travel-related business,” Bakish said, adding that advertising revenue in the segment is growing by a double-digit percentage figure.
The partnership with MTV boosted tourism on the Mediterranean island and helped shed its image as a destination for older travelers, said Josef Formosa-Gauci, the CEO of the Malta Tourism Authority.
In the six years MTV Isle of Malta has been held, the number of visitors younger than 24 increased by 88 percent and now account for 20.3 percent of all tourists.
“It’s rare you get to see a concert with such big stars for free,” said Kelly Attard, 30, a London-based marketing manager at J Sainsbury Plc. Attard, who organized a trip to Malta around the MTV concert in 2009, which featured Lady Gaga on her second showing at the event, says the artist told concertgoers “she felt a lot of love for Malta as it helped kickstart her career.”
The Malaysian MTV concert, in its fourth year, featured Justin Bieber last month and drew about 18,500 people. Mexico, which has hosted The Smashing Pumpkins, is in its third year and will feature Linkin Park in September. Other live concerts MTV has filmed include a gig by Coldplay in Japan, the Red Hot Chili Peppers in Belfast, Maroon 5 in Las Vegas and Gorillaz in London.
“Manchester is world famous for its musical heritage and we can use this opportunity to showcase what the city is about and expose more people to Manchester,” said city councilor Rosa Battle.
MTV, which started in 1981 with the words “Ladies and gentlemen, rock and roll,” began diversifying from videos in the late 1980s by creating its own content such as fashion program “House of Style,” and quiz show “Remote Control.” Today, the channel is known for reality programs such as “Jersey Shore” and “Teen Mom.”
The concert business is typical for MTV’s strategy to generate revenue from several offerings that are still tied to its music heritage, said Toby Southgate, CEO of The Brand Union, a London-based marketing consultancy.
“MTV is no longer a music broadcaster, it’s a curator and provider of content,” he said. “It’s now a central point that helps consumers develop and maintain a relationship with artists.”
In the fast-changing entertainment business, MTV is an example of how companies need to expand to make sure they stay relevant to new generations of consumers, said Mulligan.
“It used to be that you tuned into MTV to watch videos and tuned out when you wanted to watch something else,” he said. “Now they have their own shows, other MTV channels that cater to other viewing habits and also concerts. It’s become a lifestyle choice.”
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