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With record sales and royalties dwindling (down eight percent so far this year, according to Nielsen SoundScan), a fairly antiquated music industry coupled with increasing tour production costs, music artists and, perhaps more directly, artists' representation and management is looking for new ways to leverage the brand, make money and play some music along the way.
According to Rolling Stone, the merchandise sold in concert tours is what generates the most profits for bands small and big alike (14 July 2004). In 2004, Ozzy Osbourne grossed US$ 35 million in concert sales and another $15 million directly from merchandise sales, while Mötley Crüe's "Red White & Crüe" 2005 tour averaged $10 in merchandise sales per concertgoer per show. Revenue was generated from new and vintage Mötley Crüe goods including that mainstay of the rock and roll lifestyle: women's panties. For lesser-known bands, merchandise sales can be the lifeblood that literally feeds the artists.
While multi-million dollar album and concert sales sound impressive from a gross figure standpoint, even the biggest artists may only receive about a dollar per CD from sales. According to Gary Bongiovanni, editor in chief of Pollstar, a trade publication on the concert business, artists may receive as much as fifty percent of the gross concert sales once production costs are deducted. However, the biggest profit piece of the economic pie is in the merchandise itself. For every $25 standard tour t-shirt sold, as much as $10 per t-shirt may go directly to the artist. For mega artists like Britney Spears and Ozzy, a worldwide tour can translate into multi-million dollar prospects in just merchandise.
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Selling to the Man
Beyond concert arenas, the era of "selling out to the man" is now replaced by "leveraging the licensing deal." Not so many years ago (namely 1987), the use of "Revolution" by the Beatles featured prominently in a Nike television spot was considered heresy among core fans. In fact, the Beatles' Apple Corps sued Nike to halt their songs from being used to sell product.
Paul McCartney was quoted in 1988 as saying, "The most difficult question is whether you should use songs for commercials. I haven't made up my mind. Generally, I don't like it, particularly with the Beatles' stuff. When twenty years have passed, maybe we'll move into the realm where it's okay to do it."
Less than twenty years later, a synthesized "Hey Jude" now can be downloaded straight to your Nokia phone for just a few dollars.
While artists and their songs are seen more actively cuddling with corporate America (such as Jaguar car commercials featuring Sting or punk band Lillix representing for Acuvue Advance contact lenses), products featuring a pop band's image are nothing new.
From lunch boxes to Saturday morning cartoons to action figure dolls, pop idols like the Beatles, Sonny and Cher, and Elvis Presley effectively began the mass brand era for 'tweens back in the 1960s followed by the Jackson 5, Abba, and Donny and Marie Osmond in the 70s and New Kids on the Block in the 80s.
Over a decade later, toymaker Galoob (since acquired by Hasbro) resurrected the doll concept for the Spice Girls to rave success, spurring a new generation of pop star dolls from various toy companies, which include Britney Spears, Mandy Moore, Christina Aguilera and Beyoncé.
When deviating from music to other products, one thing is evident: talent and even record sales do not necessarily translate to commercial product success. Despite the powerhouse voices of Beyoncé and Christina Aguilera, the plastic, mini-me versions were utter failures compared to the Britney doll in terms of sales. According to Britney doll maker PlayAlong, the Britney doll broke all records for an individual personality doll, selling six million units at $10 to $15 retail price points.
Why are some a hit and others a bust within a similar category? Matt Hautau, vice president, licensing and marketing, for Signatures Network, believes it's difficult to pinpoint why. "We've always found that album sales have absolutely nothing to do with the ability for an artist to really build and support a merchandising program. We have artists who have sold, and who sell, tens of millions [in record sales], but for whatever reason, the connection with that artist is about pure music—not about who that artist is necessarily. Then [there are] other artists whose album sales are good, but they've got that extra offering that seems to resonate with the consumer."
Defining that "extra something" image wise, to whom it relates and translating the two to an actual product or product line is the formula that goes into today's music artist branding. Like all brands, some are well thought out and executed, and others are disastrous. (Although for many music artists, disastrous can simply translate to mediocre junk.)
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Lifestyle Mania
With a dizzying array of lifestyle-oriented product options aimed at not only 'tweens and teens but middle-aged adults and their grandbabies, the possibilities of stretching a music artist brand are greater today than ever. From Kiss coffins and condoms to John Lennon original artwork on Carter's baby clothes to Insert-Artist's-Name-Here fragrance and accessory lines, branded products not only provide extra revenue for an act. When well done, branded products can benefit a career by introducing and extending the particularly long-standing artist's name into new generations.
Signatures Network Hautau comments, "I think it's that positioning, that strategic thinking of how to leverage music artists in a way that's not going after just the core fans anymore." Translation: consumer products broaden an artist's reach.
When it comes to how far is too far, some in the industry believe that not much interferes with street credibility today. Says Robert Thorne, founder/CEO of the Robert Thorne Company and the man formerly behind the Olsen Twins and currently Hilary Duff, "I don't think there's any 'death mill' kind of associations anymore. I think customers are tired of fighting back, and they just accept that these guys (artists) go for the money. Sometimes, they do it thematically, consistently with the tone of their career, and sometimes they don't. But no one seems to care anymore."
On the other end of the 15-minute fame and money cynicism charts, some artists, such as Carlos Santana, leverage licensing and branded products to fund philanthropic causes. Carlos and his wife Deborah Santana together with his River of Colors licensing division teamed with Brown Shoe Company in 2001 to create "Carlos by Carlos Santana" women's shoes. Available in mainstream department stores and niche boutiques, the line, targeted for women ages 18 to 55, is sexy seventies inspired with lots of colors, unique prints and high heels—reflective of Santana's eclectic Latin rock music.
According to Caryn Hartsock, brand manager for River of Colors, sales continue to grow twenty percent per year (estimated by Santana Management in the tens of millions for gross revenue) with a percentage of proceeds going back to Santana's Milagro Foundation benefiting arts, health and education for children around the world. Comments Hartsock, "[The shoe line] kind of goes hand in hand with Carlos' career in terms of you would never say this is the traditional route a musician would take."
Michael Jensen of Jensen Communications (the PR company behind Santana) says, "We realized [with the success of "Supernatural" in 2000] that Carlos had become more lifestyle than just him alone."
Brand manager Hartsock also attributes the transition from guitar legend to lifestyle brand to the success of Santana's album "Supernatural," particularly with regard to how the album reached new fans and generations in collaborations with younger artists such as Dave Matthews and Rob Thomas. In contrast to 30 years ago, Santana concerts are now a multi-generational, family affair.
Keeping the opportunities and merchandise fresh is reportedly a priority for Santana Management. The website currently sells over a hundred different products in branded merchandise that, according to River of Colors, is selective in consideration and constantly changing so that "people aren't always looking at the same old t-shirts."
[6-Jun-2005]
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Alycia de Mesa is a brand identity consultant and writer with over 10 years experience from Fortune 100 to start-up companies. She is author of Before The Brand, the definitive brand identity handbook, published by McGraw-Hill (under the name Alycia Perry).
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Oct 24, 2005
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Branding, a Job Well Done -- Dale Buss
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How do major brands like Costco and Ritz-Carlton become household names without relying on traditional advertising? By tapping into their greatest resource: Employees.
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Aug 8, 2005
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Hotel Brands Break the Chain -- Rob Mitchell
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After decades of perfecting the known experience at chains around the world, hotel brands are now trying to create boutique hotels as guests go on a quest for the one-off experience.
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Jul 25, 2005
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Best Global Brands: Focus on UBS -- Robin Rusch
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Among the top five fastest growing brands on the list of 100 Best Global Brands 2005, Swiss financial services company UBS reflects the work in progress of growing and sustaining a global brand.
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Jun 20, 2005
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Growing Pains Small Brands -- Alicia Clegg
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How can a brand remain true while broadening its reach? Popular but small brands like Innocent Drinks, Tyrrells and Hill Station risk losing their original fans in their quest to grow bigger.
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Apr 18, 2005
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Dove Gets Real -- Alicia Clegg
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Unilever’s Dove is the latest beauty brand to use "real" women to sell product. But can this campaign turn ugly?
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Mar 7, 2005
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Should Global Brands Trash Local Favorites? -- Randall Frost
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When P&G, Unilever and Nestlé clean house, they risk losing local markets for beloved brands. Companies like Henkel, on the other hand, retain a portfolio of national and international brands to satisfy both global and local tastes.
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