Rolling Stones Inc. -- Bad Boys Of Rock Know How To Do Business
As the bad boys of rock, The Rolling Stones used to spend their days buying drugs and trying to avoid arrest.
Now they're symbols of modern business, courted by banks and multinational companies.
Today's Rolling Stones are written up in BusinessWeek, packaged with beer, T-shirts and credit cards, and discussed by marketing professors.
When they come to Seattle on Thursday, the last U.S. stop in the "Voodoo Lounge" world tour, the concert will represent a highly efficient mechanism for shaking gold from customers, led by unofficial chief executive Mick Jagger, dropout from the London School of Economics.
Fans can wear Rolling Stones T-shirts, drink the official Stones beer (Budweiser), watch the preferred TV channel (VH-1) and buy Stones albums with the official Rolling Stones credit card (Visa or Mastercard).
Leaving no promotional stone unturned, the band has appeared on "60 Minutes," the Fox Network, the Internet and the Billboard Music Awards.
There may be limits. McDonald's has yet to announce the McMick burger.
Gimme Tax Shelter: The Stones are reportedly guaranteed a profit of $100 million from the tour. The Seattle concert alone will generate more than $2 million from ticket sales. The Seattle audience of 40,000 or more is expected to spend at least $12 each on band merchandise, on top of their $50 concert ticket.
Popular bands such as the Stones typically take the bulk of ticket and merchandising sales. The Stones may be getting 70 percent or more of gross ticket sales. A spokesman for the band declined to give details of revenue or profits.
"We don't like to talk about cash. We like to talk about the show," says Jim Monaco, communications director for the tour's Toronto-based promoter, Concert Productions International.
The U.S. portion of the tour is projected to reach $120 million in ticket sales, according to Pollstar, the trade publication. That will top the previous industry record of $103.5 million set this year by Pink Floyd.
Few of today's fans are surprised to learn that rock is big business. Ironically, rock began as a rebellion against the Establishment and no group captured that image better than the Rolling Stones who, 30 years ago, were the greasy-haired alternative to the lovable Beatles. When the Beatles released "Let It Be," the Stones responded with "Let It Bleed."
Jagger has embraced images of bisexuality and devil worship. But he also was among the first rock stars to view music as a business and himself as a product that could be marketed and tied to promotional campaigns.
"He's an incredible talent in business and he's very involved in the business activities," says Bob Franceschelli, senior manager of national entertainment marketing for Anheuser-Busch, maker of Budweiser.
"Mick Jagger has become a franchise on tour," says Mike Bernacchi, professor of marketing at the University of Detroit Mercy. "His music-making days may be finished. His money-making days are not. This is a wonderfully orchestrated (promotion) to take every nickel and quarter. This is to the bank, Frank."
The Stones were the first in rock to tour with a corporate sponsor. Quintessence Inc., maker of Jovan perfume, paid $1 million in 1981 to sponsor a Stones tour. Since then, Phil Collins, Eric Clapton and others have toured with corporate sponsorships.
The new "Voodoo Lounge" Stones tour - named for the new album - is regarded as the most sophisticated ever by a rock band. Budweiser reportedly is paying more than $15 million for the sponsorship.
"Budweiser is the world's largest-selling beer and the Rolling Stones are one of the best rock 'n' roll bands in the world," says Franceschelli. "It's one classic brand sponsoring a classic band. So it's a perfect fit."
Even for a bank.
Chevy Chase Bank of Maryland issues a Rolling Stones Visa or MasterCard - the first card to carry a band's name. ("Call 1-800-615-ROCK to apply!") The card, with competitive interest rates, features the Stones name and their famous red tongue-and-lips logo, designed by Andy Warhol. Certain music stores are providing discounts and frequent-buyer points on "Rolling Stones Rockwear" - its line of clothing and jewelry - with every purchase charged to the Stones card.
It's safe to assume that the Stones get compensated by the bank, but neither side will talk about that or reveal the number of Stones card holders.
"We're a very conservative Maryland bank," said a spokeswoman for Chevy Chase Bank who asked not to be named. "Even though the Stones are a very popular band, we still want to remain in the background."
It's not that Chevy Chase Bank has gone hip - though its spokeswoman admits she's a fan. It's about selling credit.
Bankers know consumers have several credit cards. The trick is getting their card used the most by linking it to a preferred cause or organization. Also, Stones fans are viewed as desirable creditors, aged 25 to 50, who typically possess a job, a home, a mortgage and credit cards.
"Their audience is now part of corporate America. They're solid citizens," says Allen Levy, former rock journalist and assistant professor of communications at Chapman University in Orange, Calif. "The circle has now closed. Corporate America is rock music."
"It's not the banks co-opting the bands," says Edward Shelton, chief operating officer of National Affinity Cards, a credit-card marketing company. "The idea of putting a tongue and lips on a credit card is turning it around to the bank. It's using the bank for your rebellion."
Is Budweiser getting a return on its investment?
That's a matter of debate. Some marketing experts think Anheuser-Busch is making a mistake by linking itself to an older band. Budweiser needs to find younger customers, not older ones, say analysts.
Franceschelli says there is no way Budweiser can directly measure the benefits of a promotion. Nonetheless, his company is satisfied that fans leave a Stones concert with the notion of Budweiser as a quality product reinforced in their minds.
Both the bank and Budweiser do a Jagger-like dance around the awkward question of their association with past drug abusers. Years ago, both Jagger and guitarist Keith Richards were arrested on drug charges.
"It's not really part of the band's image at this time," says the bank spokeswoman.
The issue is especially acute for a beer maker. Budweiser has been trying to promote moderation in drinking with its "Know When to Say When" campaign.
Without directly commenting on the band's past, Franceschelli says his company promotes moderation through the concerts by playing two announcements regarding responsible use of alcohol.
To promote the tour, Budweiser is doing local promotions, including five Stones television commercials, billboards and radio contests. But the Stones are not relying on Budweiser alone for hype.
According to The Hollywood Reporter, the band is using record stores to promote sales of the "Voodoo Lounge" album.
Record stores nationwide have stayed open overnight, changed their names to tie in with the band and sponsored invitation-only parties, complete with voodoo-theme decorations and tattoo artists and body piercers for a permanent memento.
For the first time, the Stones have put out an entire catalog of merchandise ($1 a copy, available by calling 1-800-94RSTOUR), featuring a motorcycle leather jacket ($499), Official Tour Raingear jacket ($99), tongue or Devilman pins ($10), silk-screened T-shirts ($21), baseball hat ($25), socks ($10), ties ($31) and limited-edition artwork ($99 to $250) - "so your memories of the Rolling Stones will not fade away!
And yes, there's something for those Mother's Little Helpers - Rolling Stones kidswear.
Reaching out to just about everybody, the Stones gave a live Internet performance, did special pay-per-view performances and made an appearance on the hit TV show, "Beverly Hills 90210."
The "Beverly Hills" episode was practically a program-length commercial aimed at a youth who might avoid the Stones because of their popularity with parents. The plot of the show involved 20-something characters trying to decide whether to go to a Stones concert. One character, summing up the program's message, told another that "the Stones are the masters" of rock. Teen heartthrob Luke Perry wore a Rolling Stones hat ($25) through the entire show.
The "Voodoo" tour represents months of planning and is so highly organized that BusinessWeek compared it to a "virtual corporation" - a company formed to exploit a temporary opportunity.
Canadian promoter Michael Cohl functions as a chief operating officer, as does production director and business manager Joseph Rascoff, a graduate of the Wharton School of Business. Band members are briefed on all major decisions, including tour dates, promotional events and the design of merchandise. Prince Rupert Loewenstein of London acts as financial adviser to the band. Members of the organization keep in touch with each other through telephones, fax machines and an electronic-message system.
The tour operates with 250 full-time employees, 56 trucks, a 1.5 million-watt sound system and, for overseas appearances, two 747s and a Russian military cargo airplane. Because each set takes four days to build, three stages leapfrog each other on the tour. Each set weighs 170 tons.
As good businessmen, the band members know that if their principal product - the concert - declines, all of the corporate tie-ins and merchandise suffer as well.
"Everything springs from the band. They work very hard to do a good show," says Monaco, the tour promoter's communications director. "It all boils down to the fans getting their money's worth. Everyone's happy at the end of the night."
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