Wednesday, April 4, 2012

Madonna Inc.

Fashion lines, bestselling books, corporate tie-ins, branded gyms — the Material Girl knows how to survive in a material world. Tom Whipple reports on the business secrets of pop’s savviest star. LONDON — When Madonna’s latest single premiered in February it was, of course, big news on her official fan website. In a post headlined “Wow”, fan Selena said: “I feel so privileged to know Madonna in my lifetime.” Butch1977’s comment on the release was marginally more measured. “I’m awestruck,” he said.
Neither seemed to mind particularly, though, that the blog post they were responding to also boasted: “A key part of the album release included a first of its kind worldwide promotion by Clear Channel, a leading global media and entertainment company, which ... used extensive promotions to drive Madonna fans to iTunes.”
If you look back over the news releases on the site, you begin to notice several motifs. Whoever writes them is fond of starting sentences with “we are happy to announce...” and never forgets to send Madonna a birthday message (though always forgets to mention the singer’s age).

After a while, reading through the months and years, the overwhelming feeling is that this website isn’t written for the fans at all. Madonna’s website is about tie-ins and sponsorship deals, product launches and partner credit cards. It promotes perfumes and launches clothing lines. None of which should be surprising because as Madonna, 53, launches the 12th album of a three-decade career today, MDNA will not be merely, or even mainly, an artistic event. It will be a business triumph.
In 2004, Colin Barrow, former head of the Cranfield School of Management’s Enterprise Group, wrote the book Business Plans for Dummies. The 19th chapter was titled “Ten of the Best-Planned Organizations Around.”
In a collection of case studies, it praised General Electric for its ability to organize into “strategic business units.” It noted Lego’s ability to “stay focused on a specific group of customers who have very specific business needs.”
At No. 8, between McDonald’s and Southwest Airlines, was Madonna Louise Ciccone. That organization’s unique selling point? “Using what can be described as mediocre talent and competent performance skills, she has managed to move to the top of her industry — and stay there.”
Some may dispute whether that description is fair, but there is an inescapable truth: however compelling the performance, anyone watching the 26-year-old Madonna singing Like A Virgin in 1984 would not have thought she would still be around at twice that age. She has outlasted Britpop and grunge. She was cool when the Prodigy were cool — that, by the by, was why Maverick, the record label she co-founded in 1992, signed them. She was still cool when the Prodigy were old — that was when Madonna sold all the shares she owned in Maverick.
That sale, though, was not before Maverick had signed Erasure, Muse and Paul Oakenfold, and helped Ottawa’s Alanis Morissette launch one of the most successful albums in history, Jagged Little Pill, with 33 million copies shipped. Every one made Madonna richer.
A sensible move at this point might have been comfortable retirement from performing. This, after all, was Madonna, the singer who appeared in pointy bras and made music videos involving sex with saints. That’s fine when you’re in your 20s, less fine in your 40s. Yet, as Madonna moved into middle age, she also managed to move into respectability, partly via the medium of the blockbuster biopic Evita.
Some may put this move down to growing up. Barrow, however, sees calculation, with film being only one element in a sensibly diversified portfolio: “Madonna has demonstrated that careful planning and management of an image can be just as powerful as raw talent.”
He wrote those words three album releases ago and today he sees no reason to revise his assessment: “I was told by my first sales manager that you haven’t got a sale until they’ve bought it, eaten it, paid for it and not died. Madonna is of that school; she thinks the whole thing has to work. She sees it as a business, rather than art.”
The numbers speak for themselves. In 2010, Forbes reported Madonna as having earned $58 million, 10th in the financial magazine’s list of top-earning celebrities.
The big news that year was that Lady Gaga was higher. But where was Gaga in 2009? Or, indeed, 1989? We know where Madonna was.
In 2009, her Hard Candy tour helped her to a more respectable, Gaga-trouncing $110 million. 2008 was a disappointing $40 million. But in 2007 ($72 million) she signed a 10-year, $120-million deal with Live Nation that is considered so advantageous to Madonna that the company is generally expected to lose money on every album.
As has been typical throughout her career, the deal was among the first of its kind. Madonna had recognized earlier than most that traditional revenue streams would be undermined by the internet, so looked for contracts that considered other ways of leveraging her brand. The Live Nation signing, a “360-degree deal”, was designed to exploit the Madonna name across multiple platforms, such as a Madonna dance competition: “The Smirnoff Nightlife Exchange Project, including the exclusive dance competition, was the first component of a multi-faceted agreement between Madonna, Live Nation and Diageo.”
Seeking to keep Brand Madge profitable in a world of internet piracy, and reliant on getting performances out of her well into her seventh decade, the Live Nation deal covers albums (starting with MDNA), touring, merchandising, film and sponsorship. As Madonna puts it: “The paradigm in the music business has shifted and, as an artist and a businesswoman, I have to move with that shift.”
It is a long way from where she began — or from where she would like us to think she began. The creation myth of Madonna, queen of pop, places her firmly in her country’s favoured narrative. When this poor Catholic girl, whose mother had died when she was five, arrived in New York, it was with only $35 in her pocket. A few years and a few provocative dances later, Madonna was one of the biggest stars in the world. By 1989, when Lady Gaga was three, Madonna was paid $5 million in a deal that included appearing in a Pepsi ad that introduced the single Like a Prayer. It was such a big deal that the ad had a trailer — but it was shown only once. Madonna’s own video for Like a Prayer caused Catholic outrage and Pepsi pulled the plug, leaving Madonna $5 million richer and with a ready-made global publicity campaign.
Back then, Brand Madonna thrived on controversy.
Today’s Brand Madonna has a certain prudishness. Leading up to the release of her new album, the timing of her Super Bowl show was perfect: it was a 13-minute, prime-time spot that would have cost an advertiser $91 million. But she wasn’t entirely happy. After her co-performer M.I.A. flicked the middle finger during their set, Madonna distanced herself: “I was upset, because I knew that I got some people in trouble. And I don’t want to do that.”
Twenty years ago she would have happily lapdanced for the Pope, but for today’s Madonna, a clean-living fitness fanatic and mother of four, swearing is definitely not on-message.
Other veteran megastars have not fared as well as Madonna. Michael Jackson died a near bankrupt, having mortgaged his back catalogue and leaned heavily for support on the Bahraini royal family — one of showbusiness’s more surprising friendships. Leonard Cohen returned from a five-year Buddhist retreat to find his manager had run off with most of his savings. “Unlike Cohen,” Barrow says, “Madonna has never belonged to the school of total delegation. She has not just hired accountants and lawyers, while she sings. She knows it’s a business.”
In 2007, before her recent earning spree, Madonna’s total wealth was estimated at between $300 million and $400 million. Placing her just below Oprah Winfrey in its list of wealthy female entertainers, Forbes deemed this figure “conservative.”
Of course, other artists have business lines: Dr Dre has his Beats headphones, Britney Spears has her perfume. But there is something quantitatively and qualitatively more impressive about Madonna.
“She is always staying one step ahead: working with the right people, spotting the right idea,” says Paul Williams, head of business analysis at Music Week. “There aren’t many artists — any artists, in fact — who have moved into as many areas as she has.” Madonna has always managed to make her diversifications look natural. “The trick is to use the brand in a way that is you. Countless artists have their own fragrances. The key thing for any artist who allows their brand to be used in this way is does it fit their identity? Or does it look like a cash-in? The areas Madonna moves into are all areas directly associated with her, so they don’t look odd.”
In 2012 that means a range of clothing, Truth or Dare, for women aged 27 to 50. But Williams’s theory is as true of her early career. In 1994 Madonna appeared on Late Show with David Letterman, handing the host a pair of her underwear and asking him to smell them. Then, her brand was about only one thing. In 1992 she released a book of soft-porn photographs, simply called Sex. Time Warner had, grudgingly, given her permission to make the book but had, reputedly, made her sign a pledge not to include pictures with religious imagery or bestiality. If the story is true, anyone looking at Sex would see that she ignored them. But Sex sold 1.5 million copies at $50 each. Warner couldn’t argue with that.
Now, a woman who 20 years ago published a photograph of herself naked and straddling a dog, has directed a film, W.E., about King Edward VIII’s abdication. “She’s a shrewd woman,” Williams says. “She has managed to repeatedly tap into the zeitgeist and take something that was underground and bring it into the mainstream. In music you are lucky to have a career lasting three months; to have one that has lasted 30 years, you have to be smart. You have to be very aware you are a business.”
Hard Candy is the name of Madonna’s last album. But that’s old news. These days, Madonna’s main use for the title is in a line of gyms. This fits perfectly into the 2012 brand.
“She’s known to work out for however many hours a day,” Williams says. “It’s all part of the Madonna persona.”
The first Hard Candy gym opened in Mexico City in November 2010. The second opened in 2011 in Moscow, when we were told: “Hard Candy Fitness team members will sport the latest Adidas by Stella McCartney and Porsche Designs attire from Winter 2011-2012 Adidas collection.” More are planned, presumably with fashion tie-ins.
Back on Madonna’s website, fan club member lumb1 approves of the expansion. It is, he says, not unreasonably, “a very good idea for those (who) are into fitness with Madonna’s name attached to it”. Madonna will be hoping so. In fact, she’s banking on it.

The Times, London
©Times Newspapers Ltd. 2012