Celebrity Branding Has Never Been Hotter — Or More Bizarre

[Lodewijk]

Gene Simmons, Carlos Santana, Charlie Sheen Make Unlikely Designers

Sunday, January 21, 2007

By Samantha Jonas-Hain - AP

Celebrity branding has never been hotter — or more bizarre.

KISS rocker Gene Simmons is peddling an "elegant" new perfume. Guitar god Carlos Santana has a new line of sexy women's shoes. And "Two and Half Men" star Charlie Sheen is shaking up the kiddie couture market.

Why are these already successful stars branching out into what appears to be foreign and very unlikely territory?

You guessed right: It's all about the Benjamins.

“It doesn’t have to make sense,” Simmons told FOXNews.com. “What does KISS have to do with shampoo or coffee? Nothing. The reason to get involved in anything is commerce.”

There are other odd pairings. Donald Trump, a known teetotaler, just launched Trump Super Premium Vodka. Rocker Jon Bon Jovi is the co-founder of the Rock Star Baby line of baby gear. And actor Jackie Chan recently launched an organic skin care line.

“Nowadays, celebrities realize they are like stock portfolios," said Marshall Cohen, chief analyst at market research information company NPD Group. "They need to diversify, because even though they are hot today, they know tomorrow they could be gone. Finding alternative ways to put your name out there helps keep you in the spotlight for a longer amount of time."

Cohen added that celebrities like Simmons generally make between 10 and 16 percent of the gross sales of products that bear their names.

Indeed, when Simmons appears in stores to hawk his perfumes, an average of 2,500 people show up, and his product sells between $35,000 and $50,000 at every stop, said Lori Zelenko, a representative for KISS Fragrances.

"He has the magical touch. People want him to sign bottles. Gene Simmons has women who have been waiting 30 years to touch the guy," Zelenko added.

Most celebrity-branded goods are obvious attempts to ride the wave of success stirred by Sean 'Diddy' Combs' Sean John clothing line and Mary-Kate and Ashley Olsen’s merchandising empire.

The $1.3 billion Olsen powerhouse, which capitalizes on the former "Full House" stars' names, has inspired Britney Spears, Paris Hilton, Sarah Jessica Parker, Hilary Duff, Jennifer Lopez and countless other stars to cash in on fashion and lifestyle products.

Hip-hop mogul Combs has similarly paved the way for other rappers to play stylist. Eminem, Snoop Dogg, Outkast and Jay-Z have all made their personal styles available at clothing stores around the country, and even Justin Timberlake is living up to his “SexyBack” reputation with his new denim company William Rast.

“All it takes is one successful entity to breed competition,” said Cohen.

But what sets Sheen, Santana and KISS apart from Jessica Simpson's Dessert body cosmetics and Gwen Stefani’s L.A.M.B. apparel is the unlikeliness of the products they are selling.

What does KISS, best known for white face paint, breathing fire and rock 'n' roll, have to do with a delicate women’s body splash?

Not much, according to Simmons.

"We're a rock brand instead of just a rock band,” said the star, who launched his new KISS Her and KISS Him fragrances Oct. 1 and has a 27-city chain of KISS restaurants in the works. "There is nothing we can’t do."

Unlikely as these products are, they are selling. CARLOS by Carlos Santana Shoes says business is booming (with partial proceeds going to charity).

And Sheen, who plays a childless ladies' man on his hit sitcom, has had steady sales with his Sheen Kidz children's clothing line, which was picked up by Los Angeles' trendy Kitson boutique and Bloomingdale's, according to Sheen Kidz.

“Being able to align yourself with a celebrity product, regardless of quantity or quality, is something stores want because the name on the product already gets recognition, which is the key to getting a jump-start on success,” said Cohen.

Most of the time, a celebrity product will sell on novelty alone. KISS fan Howie Davis, a 25-year-old New York City lawyer, wasn't impressed with the smell of KISS Him ... but he still got a kick out of it.

"I thought the packaging was a cool, classic KISS design," Davis said. "The smell is pretty generic, but I don't know how they can package a KISS smell without smelling pretty gross."

Davis added that he doesn't think people buy it for the smell.

"You're not going to impress anyone when they ask you what cologne you are wearing and you say 'KISS cologne,'" he said.

According to a recent NPD survey of 3,500 consumers, 21 percent of consumers said their purchases are influenced by celebrities or endorsements by celebrities.

And celebs like Simmons know better than to stick their tongues out at this moneymaking potential.

“Some celebrities dabble in things, but this is a business. This is show business. The business part is right up there,” he said.

[LLFHS]

Sounds like a great way for celebrities to stay rich without having to do any real work.

[Axxman300]

Eddie Van Halen could put out a line of shirts, but then he'd have to start wearing one.

I'm suprised that he wasn't out biking with Matthew McConaughey, Jake Gillanhall and Lance Armstrong last summer.

[Lodewijk]

Just thought the article might shed a different light on all the Tequila/Hot sauce/Replica guitar talk going on lately.....

[LLFHS]

Just thought the article might shed a different light on all the Tequila/Hot sauce/Replica guitar talk going on lately.....

At least those cats still WORK.

[Axxman300]

Like I alway say, there's more money in merchandizing than music.

Artists get $2 or $3 per album sold. They get $10 to $20 per t-shirt sold.

The only product with a better mark up over cost than perfume is liquor (especially a great Tequilla).

P-Diddy makes shitloads more from Sean-John than he ever will from his "music".

[G3fan]

Like I alway say, there's more money in merchandizing than music.

Artists get $2 or $3 per album sold. They get $10 to $20 per t-shirt sold.

The only product with a better mark up over cost than perfume is liquor (especially a great Tequilla).

P-Diddy makes shitloads more from Sean-John than he ever will from his "music".

Not to argue, but I always understood artists got VERY little from the album sales and got the big bucks from tours. The record company gets the album money from what I always hear.

[ZeoBandit]

Sounds like a great way for celebrities to stay rich without having to do any real work.

No kidding

[LLFHS]

Not to argue, but I always understood artists got VERY little from the album sales and got the big bucks from tours. The record company gets the album money from what I always hear.

Yeah....I saw "T.L.C. - Behind The Music" too.

I would imagine also that it largely depends on the artist (and their business savvy) as well, but I could be wrong.

[Axxman300]

Some bands can make money on tour. It depends on how smart their manager is. There's the classic Van Halen story about how when Sammy joined the band he found that he made more playing 5000 seaters than Van Halen was making at 12,000 seat areanas.

Here's how it works (or used to work):

Your band is due to record an album. Usually the label fronts you the money for the studio and the producer. Then the label also fronts you the money for manufacture, promotion and shipping. Then you have to pay all of that money back with whatever you get from your album sales before you get to keep any money.

If you're U2, this isn't a problem, if you are Joe Nobody you've got a big hill to climb.

The tour for newbies is usually financed with a loan, either from the label or third parties. You can make back the money to pay off the loan and make some money if you are smart and lucky.

For Van Halen, U2, KISS and established acts with big stage shows, they finance the tours a variety of different ways. Corperate sponsorship will defray some of the tour's cost, if you're Maddonna or U2 they might foot the entire bill or up to 50%. Most artists are smart enough to keep that to a minimum and use it to maximize profits. You make money on tour by keeping your costs as low as you can. So if you can get Coke to underwrite the printing of your concert programs or t-shirt production then it's all profit. The band will make most of it's money from merchandise sales and then maybe ticket sales. It depends on the kind of show they put on. KISS' shows can cost over $100,000 a night to put on, if they are moving to a new city each night. They can defray that a little if it's a multiple night run in a single spot. When I saw them the first time in 1979, it was at the Cow Palace in San Francisco. That arena rented for 1,500 a night plus 5000 for security and 3%(or so) of the gate. Tickets were $25 and they sold 14,000, so KISS grossed $350,000 that night but by the time that they covered costs and state and federal tax they banked around $100,000. However, they probably grossed $500,000 in merchandise sales and they didn't have to split that. They just payed the state sales tax of $30,000 and put the rest in the bank.

Not every band puts on a half-million dollar show, so their costs will be lower. I should point out that if you went to see a band play and it cost you $50 or more and they came out in jeans, with just the basic light set-up and had no special staging or effects then you got ripped off. Well, unless it was Bruce Springsteen. When a band head out on a tour where the tickets sell for more than $50, they are trying to make a ton of money. There's nothing wrong with that, but many of those bands and their fans look down on "Comercial" bands because "They only want to make money". In places in the United States, your band can make $150,000 a night by selling out a 14,000 seater at $25. It depends on what you want your profit margin to be and what you think you can get out of or soak your fans for.

[AT]

Copied below is a great article from Steve Albini (Chicago-based producer) from 2000. I've made it habit to email this article to all of the young bands I've produced over the years. (This will be two consecutive posts since text is limited.)

The Problem With Music
by Steve Albini
excerpted from Baffler No. 5

Whenever I talk to a band who are about to sign with a major label, I always end up thinking of them in a particular context. I imagine a trench, about four feet wide and five feet deep, maybe sixty yards long, filled with runny, decaying shit. I imagine these people, some of them good friends, some of them barely acquaintances, at one end of this trench. I also imagine a faceless industry lackey at the other end, holding a fountain pen and a contract waiting to be signed. Nobody can see what's printed on the contract. It's too far away, and besides, the shit stench is making everybody's eyes water. The lackey shouts to everybody that the first one to swim the trench gets to sign the contract. Everybody dives in the trench and they struggle furiously to get to the other end. Two people arrive simultaneously and begin wrestling furiously, clawing each other and dunking each other under the shit. Eventually, one of them capitulates, and there's only one contestant left. He reaches for the pen, but the Lackey says, "Actually, I think you need a little more development. Swim it again, please. Backstroke." And he does, of course.

I. A&R Scouts

Every major label involved in the hunt for new bands now has on staff a high-profile point man, an "A&R" rep who can present a comfortable face to any prospective band. The initials stand for "Artist and Repertoire," because historically, the A&R staff would select artists to record music that they had also selected, out of an available pool of each. This is still the case, though not openly. These guys are universally young [about the same age as the bands being wooed], and nowadays they always have some obvious underground rock credibility flag they can wave. Lyle Preslar, former guitarist for Minor Threat, is one of them. Terry Tolkin, former NY independent booking agent and assistant manager at Touch and Go is one of them. Al Smith, former soundman at CBGB is one of them. Mike Gitter, former editor of XXX fanzine and contributor to Rip, Kerrang and other lowbrow rags is one of them. Many of the annoying turds who used to staff college radio stations are in their ranks as well. There are several reasons A&R scouts are always young. The explanation usually copped-to is that the scout will be "hip" to the current musical "scene." A more important reason is that the bands will intuitively trust someone they think is a peer, and who speaks fondly of the same formative rock and roll experiences. The A&R person is the first person to make contact with the band, and as such is the first person to promise them the moon. Who better to promise them the moon than an idealistic young turk who expects to be calling the shots in a few years, and who has had no previous experience with a big record company. Hell, he's as naive as the band he's duping. When he tells them no one will interfere in their creative process, he probably even believes it. When he sits down with the band for the first time, over a plate of angel hair pasta, he can tell them with all sincerity that when they sign with company X, they're really signing with him and he's on their side. Remember that great, gig I saw you at in '85? Didn't we have a blast. By now all rock bands are wise enough to be suspicious of music industry scum. There is a pervasive caricature in popular culture of a portly, middle aged ex-hipster talking a mile-a-minute, using outdated jargon and calling everybody "baby." After meeting "their" A&R guy, the band will say to themselves and everyone else, "He's not like a record company guy at all! He's like one of us." And they will be right. That's one of the reasons he was hired. These A&R guys are not allowed to write contracts. What they do is present the band with a letter of intent, or "deal memo," which loosely states some terms, and affirms that the band will sign with the label once a contract has been agreed on. The spookiest thing about this harmless sounding little "memo," is that it is, for all legal purposes, a binding document. That is, once the band sign it, they are under obligation to conclude a deal with the label. If the label presents them with a contract that the band don't want to sign, all the label has to do is wait. There are a hundred other bands willing to sign the exact same contract, so the label is in a position of strength. These letters never have any term of expiration, so the band remain bound by the deal memo until a contract is signed, no matter how long that takes. The band cannot sign to another label or even put out its own material unless they are released from their agreement, which never happens. Make no mistake about it: once a band has signed a letter of intent, they will either eventually sign a contract that suits the label or they will be destroyed. One of my favorite bands was held hostage for the better part of two years by a slick young "He's not like a label guy at all,' A&R rep, on the basis of such a deal memo. He had failed to come through on any of his promises (something he did with similar effect to another well-known band), and so the band wanted out. Another label expressed interest, but when the A&R man was asked to release the band, he said he would need money or points, or possibly both, before he would consider it. The new label was afraid the price would be too dear, and they said no thanks. On the cusp of making their signature album, an excellent band, humiliated, broke up from the stress and the many months of inactivity.

[AT]

Continued...

II. There's This Band

There's this band. They're pretty ordinary, but they're also pretty good, so they've attracted some attention. They're signed to a moderate-sized "independent" label owned by a distribution company, and they have another two albums owed to the label. They're a little ambitious. They'd like to get signed by a major label so they can have some security—you know, get some good equipment, tour in a proper tour bus—nothing fancy, just a little reward for all the hard work. To that end, they got a manager. He knows some of the label guys, and he can shop their next project to all the right people. He takes his cut, sure, but it's only 15%, and if he can get them signed then it's money well spent. Anyway, it doesn't cost them any thing if it doesn't work. 15% of nothing isn't much! One day an A&R scout calls them, says he's "been following them for a while now," and when their manager mentioned them to him, it just "clicked." Would they like to meet with him about the possibility of working out a deal with his label? Wow. Big Break time. They meet the guy, and y'know what—he's not what they expected from a label guy. He's young and dresses pretty much like the band does. He knows all their favorite bands. He's like one of them. He tells them he wants to go to bat for them, to try to get them everything they want. He says anything is possible with the right attitude. They conclude the evening by taking home a copy of a deal memo they wrote out and signed on the spot. The A&R guy was full of great ideas, even talked about using a name producer. Butch Vig is out of the question—he wants 100 g's and three points, but they can get Don Fleming for $30,000 plus three points. Even that's a little steep, so maybe they'll go with that guy who used to be in David Letterman's band. He only wants three points. Or they can have just anybody record it [like Warton Tiers, maybe—cost you 5 or 10 grand] and have Andy Wallace remix it for 4 grand a track plus 2 points. It was a lot to think about. Well, they like this guy and they trust him. Besides, they already signed the deal memo. He must have been serious about wanting them to sign. They break the news to their current label, and the label manager says he wants them to succeed, so they have his blessing. He will need to be compensated, of course, for the remaining albums left on their contract, but he'll work it out with the label himself. Sub Pop made millions from selling off Nirvana, and Twin Tone hasn't done bad either: 50 grand for the Babes and 60 grand for the Poster Children—without having to sell a single additional record. It'll be something modest. The new label doesn't mind, so long as it's recoupable out of royalties. Well, they get the final contract, and it's not quite what they expected. They figure it's better to be safe than sorry and they turn it over to a lawyer—one who says he's experienced in entertainment law—and he hammers out a few bugs. They're still not sure about it, but the lawyer says he's seen a lot of contracts, and theirs is pretty good. They'll be getting a great royalty: 13% [less a 10% packaging deduction]. Wasn't it Buffalo Tom that were only getting 12% less 10? Whatever. The old label only wants 50 grand, and no points. Hell, Sub Pop got 3 points when they let Nirvana go. They're signed for four years, with options on each year, for a total of over a million dollars! That's a lot of money in any man's English. The first year's advance alone is $250,000. Just think about it, a quarter-million, just for being in a rock band! Their manager thinks it's a great deal, especially the large advance. Besides, he knows a publishing company that will take the band on if they get signed, and even give them an advance of 20 grand, so they'll be making that money too. The manager says publishing is pretty mysterious, and nobody really knows where all the money comes from, but the lawyer can look that contract over too. Hell, it's free money. Their booking agent is excited about the band signing to a major. He says they can maybe average $1,000 or $2,000 a night from now on. That's enough to justify a five week tour, and with tour support, they can use a proper crew, buy some good equipment and even get a tour bus! Buses are pretty expensive, but if you figure in the price of a hotel room for everybody in the band and crew, they're actually about the same cost. Some bands (like Therapy? and Sloan and Stereolab) use buses on their tours even when they're getting paid only a couple hundred bucks a night, and this tour should earn at least a grand or two every night. It'll be worth it. The band will be more comfortable and will play better. The agent says a band on a major label can get a merchandising company to pay them an advance on t-shirt sales! Ridiculous! There's a gold mine here! The lawyer should look over the merchandising contract, just to be safe. They get drunk at the signing party. Polaroids are taken and everybody looks thrilled. The label picked them up in a limo. They decided to go with the producer who used to be in Letterman's band. He had these technicians come in and tune the drums for them and tweak their amps and guitars. He had a guy bring in a slew of expensive old vintage microphones. Boy, were they "warm." He even had a guy come in and check the phase of all the equipment in the control room! Boy, was he professional. He used a bunch of equipment on them and by the end of it, they all agreed that it sounded very "punchy," yet "warm." All that hard work paid off. With the help of a video, the album went like hotcakes! They sold a quarter million copies! Here is the math that will explain just how fucked they are: These figures are representative of amounts that appear in record contracts daily. There's no need to skew the figures to make the scenario look bad, since real-life examples more than abound. Income is underlined, expenses are not.

Advance: $250,000 Manager's cut: $37,500 Legal fees: $10,000 Recording Budget: $150,000 Producer's advance: $50,000 Studio fee: $52,500 Drum, Amp, Mic and Phase "Doctors": $3,000 Recording tape: $8,000 Equipment rental: $5,000 Cartage and Transportation: $5,000 Lodgings while in studio: $10,000 Catering: $3,000 Mastering: $10,000 Tape copies, reference CDs, shipping tapes, misc expenses: $2,000 Video budget: $30,000 Cameras: $8,000 Crew: $5,000 Processing and transfers: $3,000 Offline: $2,000 Online editing: $3,000 Catering: $1,000 Stage and construction: $3,000 Copies, couriers, transportation: $2,000 Director's fee: $3,000 Album Artwork: $5,000Promotional photo shoot and duplication: $2,000 Band fund: $15,000 New fancy professional drum kit: $5,000 New fancy professional guitars (2): $3,000New fancy professional guitar amp rigs (2): $4,000 New fancy potato-shaped bass guitar: $1,000 New fancy rack of lights bass amp: $1,000 Rehearsal space rental: $500 Big blowout party for their friends: $500 Tour expense (5 weeks): $50,875 Bus: $25,000 Crew (3): $7,500 Food and per diems: $7,875 Fuel: $3,000 Consumable supplies: $3,500 Wardrobe: $1,000 Promotion: $3,000 Tour gross income: $50,000 Agent's cut: $7,500 Manager's cut: $7,500 Merchandising advance: $20,000 Manager's cut: $3,000 Lawyer's fee: $1,000 Publishing advance: $20,000 Manager's cut: $3,000 Lawyer's fee: $1,000 Record sales: 250,000 @ $12 = $3,000,000 gross retail revenue Royalty (13% of 90% of retail): $351,000 Less advance: $250,000 Producer's points: (3% less $50,000 advance) $40,000 Promotional budget: $25,000Recoupable buyout from previous label: $50,000 Net royalty: (-$14,000) Record company income: Record wholesale price $6.50 x 250,000 = $1,625,000 gross income Artist Royalties: $351,000 Deficit from royalties: $14,000 Manufacturing, packaging and distribution @ $2.20 per record: $550,000 Gross profit: $710,000

The Balance Sheet: This is how much each player got paid at the end of the game. Record company: $710,000 Producer: $90,000 Manager: $51,000 Studio: $52,500 Previous label: $50,000 Agent: $7,500 Lawyer: $12,000 Band member net income each: $4,031.25

The band is now 1/4 of the way through its contract, has made the music industry more than 3 millon dollars richer, but is in the hole $14,000 on royalties. The band members have each earned about 1/3 as much as they would working at a 7-11, but they got to ride in a tour bus for a month. The next album will be about the same, except that the record company will insist they spend more time and money on it. Since the previous one never "recouped," the band will have no leverage, and will oblige. The next tour will be about the same, except the merchandising advance will have already been paid, and the band, strangely enough, won't have earned any royalties from their t-shirts yet. Maybe the t-shirt guys have figured out how to count money like record company guys. Some of your friends are probably already this fucked.

©2000 MAXIMUMROCKNROLL/rancid@rlabels.com/a rancid amoeba homepage

[the_atomic_punks_rule]

Not to argue, but I always understood artists got VERY little from the album sales and got the big bucks from tours. The record company gets the album money from what I always hear.

its closer to pennies on the dollar i believe.

[Red]

Thanks for posting, Andrew. I've seen that before and it was every bit as fascinating this time.

I know of a band who went through almost exactly that same scenario, only they rode in a large custom van, ate once a day, and lost a wad on a "mini-tour" of Australia. But hey, they met and fed a lot of cool DJs.

[Red]

Indeed, when Simmons appears in stores to hawk his perfumes, an average of 2,500 people show up, and his product sells between $35,000 and $50,000 at every stop, said Lori Zelenko, a representative for KISS Fragrances.

Like a ray of angelic sunshine from heaven, the name of Gene's next solo "effort" just hit me: "Bullshit".


When he "hawked" his way into a stop at Fort Bragg last year, he was greeted by a few hundred, and a few dozen made purchases, or so the story went at that time.....