The New Music Moguls David J
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THE NEW MUSIC MOGULS DAVID J. DEAL Contents Introduction: The Music Moguls Write Their Own Rules 2 The Katy Perry Formula for Success: Hustle Songs Like Cornflakes 4 Rihanna and Samsung: The Art of the Co-Brand 7 Adele and Taylor Swift: The Diva and the BFF 10 The Reinvention of Justin Bieber 13 Lady Gaga: The Consummate Music Mogul 15 Conclusion: Lessons Learned 18 1 Music has become an industry of haves and have-nots. The haves consist of the handful of musicians who command millions of dollars a year from touring, merchandising, endorsing brands, and, in effect, operating their own brands. They are represented by the top 30 highest- earning musicians ranked in Forbes magazine each year, earning into the billions among them. 2 The have-nots consist of everyone else: the up-and- about the many elements of a successful brand, coming young musicians trying to make a name in including engaging an audience, picking your an increasingly cluttered world in which anyone on partnerships wisely, and being resilient. Soundcloud can act as musician, distributor, and publisher; and the already-established performers who This is not a primer, though. Instead, I use a support their music by licensing their songs wherever storytelling approach by profiling five music moguls: they can and having second careers elsewhere. · Katy Perry, who treats her songs like little morsels Call the haves the new music moguls. The new music of branded content to build her image. moguls write their own rules, which oftentimes apply · Rihanna, who demonstrates the value of creating to the have-nots, and sometimes not. Touring, where a smart brand partnership. the music moguls make millions, is a money-losing proposition for many have-nots, as writer Mike · Adele and Taylor Swift, who have mastered the Errico made clear in a recent New York Times art of fan engagement but in very different ways. analysis. But the music moguls are bellwethers in many ways, such as their ability to treat brands as DJs · Justin Bieber, who has taught us how to play to share their music with a broader audience. We’re the media to regain fan love and rehabilitate his now seeing media platforms such as Muzooka help image after falling from grace. everyday musicians form relationships with brands. · Lady Gaga, who is the consummate music mogul The ebook you’re now reading, The New Music for a number of reasons, ranging from her ability Moguls, examines how the world’s most powerful to engage fans to her ongoing cultural relevance. musicians not only make music but seemingly make I draw partly from the Forbes list of the highest-paid the industry bend to their collective will. In this musicians for 2015. I also include some names that ebook, I discuss the lessons that the music moguls were not on the list but probably will be when Forbes have to share. I have two audiences in mind: updates the list in December 2016: Adele, Justin • Anyone who aspires to break through in the Bieber, and Rihanna. The music moguls matter not fractured music industry. just because they make money -- although their financial gains certainly constitute a yardstick by • Anyone who aspires to build a brand, period, which their success is measured -- but because they regardless of your industry affiliation. Music illustrate the power of artists to create rules for others moguls can teach all marketers something to follow. Here are their stories. How do the music elite make their Here is a representative sample: Who Are The Music Moguls? money? Not by recording music. A Sample from Forbes Elite stars such as Katy Perry, Taylor Swift, and Rank Name Amount Earned Justin Timberlake cash in from touring, forming 1 Katy Perry $135 million endorsement deals with brands, and by launching 2 One Direction $130 million their own business ventures. Consumers just don’t 3 Garth Brooks $90 million buy enough recorded music anymore to support the 4 Taylor Swift $80 million performers we say we love. 5 The Eagles $73.5 million 6 Calvin Harris $66 million The industry’s biggest stars play by a new set of 7 Justin Timberlake $63.5 million rules: build your fan base with music, but make 8 Diddy $60 million your money elsewhere. Musicians such as Jay Z have 9 Fleetwood Mac $59.5 million become music moguls, extending their reach beyond 10 Lady Gaga $59 million music into businesses such as spirits, food, and 12 Ed Sheeran $57 million clothing. The moguls treat their own music as branded 13 Jay Z $56 million content hustled across multiple media including 16 Toby Keith $53 million streaming services, YouTube and Vevo, and co-brands 21 Kenny Chesney $42 million with corporate DJs such as Apple and Samsung. They 28 Jimmy Buffett $36 million don’t expect to make money off their musical content. Tiesto $36 million They expect to achieve brand visibility. 30 Maroon 5 $33 million Dr. Dre $33 million An Industry Snapshot The top earners reflect genres ranging from country to Forbes ranked the most successful musicians of 2015 hip-hop. Collectively, they earned nearly $1.5 billion. based on pre-tax income earned from June 2014- They are members of the music elite. June 2015. All of them made huge bucks, starting The Katy Perry Formula for Success with Katy Perry, the top-ranked musician with $135 million earned. The lowest ranking musicians, Dr. Katy Perry made her $135 million from touring Dre and Maroon 5, made $33 million each. The (playing 126 shows and earning $2 million per venue) entire list is available on Forbes.com via this link. 4 and endorsing products such as Claire’s, Coty, and cake, and flying around the audience in a seat CoverGirl. festooned with balloons and confetti. Music was the content underlying the experience, which She told Forbes, “Music has changed. The record is grossed more than $204.5 million (not all that that launching pad for all kinds of other creative money figured into the Forbes calculation for 2015 branches.” because of the time period being measured). Katy Perry typifies how stars treat music as branded She complements the music with heavy use of social content that fuels a number of broader endeavors. She’s media, especially on Twitter, which she famously not counting on the sale of recorded songs or albums uses to engage with fans, give a behind-the-scenes to carry the day although she certainly sells plenty of look at her life, and share a more personal side. recorded music. Instead, she relies on recorded music She would be nowhere without her recorded music. as a means to achieve three objectives: But her recorded music is not sufficient to make her a 1) Maintain Visibility for Her Personal Brand millionaire several times over. She makes her song catalog available widely to streaming services and releases videos regularly. She’s responsible for two of the 10 most popular YouTube videos of all time. 2) Cozy up to Brands She forms relationships with brands to launch songs, as she did when she debuted her song “Every Day Is a Holiday” in an H&M commercial and streamed the track into H&M stores. She also modeled the H&M Holiday collection and drew attention to her own line of holiday-themed onesies. 3) Earn Megadollars from Touring Her tours usually consist of theatrical experience with bells, whistles, and visual staging. She promised that her most recent tour, the Prismatic World Tour, would be a “feast for the eyes,” and the spectacle did not disappoint. A typical show If the Katy Perry formula seems crass, remember that the record has to be a launching pad for something else if an artist is to make it at all let alone become a superstar. Digital long ago killed music recording as a viable form of moneymaking, and the record-buying public was an accomplice. First came the singles-friendly download format, which destroyed the more lucrative album as an art form. Then came streaming, which has been eroding the commercial value of singles and albums. Almost every artist on the Forbes list was featured multiple sets that included moments touring — and usually heavily so — in 2015, with such as Katy Perry performing in Egyptian garb album releases providing the music content for on a golden horse, feting an audience member the tour. It has taken months for Taylor Swift’s 1989 on a throne on top of a giant rotating birthday to sell an impressive 8.6 million copies worldwide, 5 for which she probably earned millions, but Taylor But Diddy is something like two businesses, man. Swift can pull down millions for a single show in At age 24, he founded Big Boy Records and never one day. looked back. In the 1990s, he focused mostly on building a music empire as producer, performer, Meet the New Moguls and impresario. In 1998, he expanded beyond Musicians have been earning money from product music, founding the Sean John clothing line, and endorsements and co-branding deals for years, and throughout the 2000s, he diversified his business in 2015, the biggest names continued to cash in on ventures, including the establishment of DeLeon lucrative relationships with businesses. They all tequila, as well as a co-brand with Cirac vodka and follow the Katy Perry rules for success by using their stakes in Revolt TV and Aquahydrate. He has a songs as a means to an end. Some of the baby boomer reported net worth of $735 million. acts simply dip into their deep catalog of music Meantime, many other artists have carved out their without sharing new content.