The Business of Justin Bieber
How do you define overnight success? Is it moving 10 million albums worldwide over 14 months? Inspiring more than 100 products that become top holiday sellers in the company of Harry Potter and Barbie? Opening your first movie on 3,000-plus screens with box-office earnings that could top $20 million? Amassing 7 million Twitter followers in two years? Nabbing two Grammy nominations, one in the highly coveted best new artist category?
Indeed, Justin Bieber, 16, has arrived. He and his famously windswept hair (trimmed two days before THR’s shoot) have been ubiquitous, showing up for a cameo on Saturday Night Live, swapping seats with Jon Stewart to open The Daily Show and joining Ozzy Osbourne in a much-buzzed-about Super Bowl ad, showcasing impressive comedic timing.
But it wasn’t all that long ago when a 12-year-old Bieber was busking outside the Avon Theatre in Stratford, Ontario (population 32,000) hoping to get noticed — a moment captured forever by a passerby and shared some 3.2 million times on YouTube. Four years later, Never Say Never (opening Feb. 11) — Bieber’s Purple Rain-inspired, Paramount-backed 3D extravaganza that’s part documentary, part concert movie, all feel-good fare — will screen there for 1,000 lucky local fans as a thank-you of sorts for supporting the small-town kid with big-city dreams, many of which he’s already realized. Reaction from early viewings has been teary and overwhelmingly positive. An admittedly “smitten” Gayle King raved on her video blog: “There is so much more to Justin Bieber than ‘Baby, Baby, Baby,’ but oh baby, is he good! I’m a Belieber!”
Having earned an estimated $100 million in 2010, a cottage industry has formed around Bieber Fever that includes sales of his music (the 2009 EP My World, a 2010 full-length, My World 2.0, a remix album and an acoustic comp, which was sold exclusively at Walmart), merchandise (singing dolls, jigsaw puzzles, watches, 30 T-shirt designs, paper products like purple dessert plates and a 5-foot-8-inch cardboard standup that sells for $35), a book (First Step 2 Forever: My Story, released in October) and concert tickets (Bieber sold out New York’s Madison Square Garden, a pinnacle moment in Never Say Never, and heads on a world tour in the spring) with plans to further expand into film and television (SNL aside, Bieber had a guest role on CBS’ CSI this past fall).
“I’ve seen an artist ascend this fast before but never this big,” says Antonio “L.A.” Reid, chairman of Island Def Jam Music Group (IDJ), who signed Bieber to a 360 deal in October 2008. “It’s like the Beatles. It feels like when I was a kid and wanted to go see A Hard Day’s Night.” The partnership entitles the label to a cut of Bieber’s ancillary income, or as Reid calls it, “a very small piece of the pie.” Including merchandising, publishing royalties, endorsements and sponsorships, IDJ stands to make 15 to 20 percent on average.
For Reid, speaking to THR a day after Never Say Never’s ear-splitting New York premiere, this latest success (which comes at an opportune time — weeks after unrelenting rumors of an imminent exit from IDJ, which never materialized) is not only a validation of his seemingly God-given talent for spotting stars but the continuation of a journey started two decades ago when he was a budding executive in Atlanta. It was then, in 1992, after seeing moderate success during the 1980s with the Deele, a band Reid formed with songwriter Kenneth “Babyface” Edmonds, that he turned his attention to a motivated young R&B whippersnapper named Usher Raymond.
Reid signed the then-14-year-old to his LaFace Records, which was distributed through Sony-owned Arista Records, the label run by legendary music man Clive Davis (Reid became president of Arista in 2000, a title he held until 2004). Six albums later, with global sales of more than 65 million units, Usher remains on the roster and is still in business with Reid, but this time guiding mutual protege Bieber.
The story goes something like this: Scott “Scooter” Braun, now 29 — an aspiring manager and Atlanta transplant who cut his music-industry teeth working as a marketing executive at Jermaine Dupri’s So So Def Recordings — happened upon another YouTube video of Bieber singing Ne-Yo’s “So Sick” and was instantly floored. So much so that he essentially stalked Bieber’s mother, Pattie Mallette (dad Jeremy remains in the picture and makes an emotional appearance in Never Say Never), going so far as to contact Stratford’s school board, until he persuaded Mallette to fly with her only son to Atlanta. “It’s a big joke between me and Justin now, but I became completely obsessed with tracking him down,” Braun says.
Usher felt it, too. In another pivotal scene from Never Say Never, after a chance encounter at an Atlanta recording studio, a ballsy Bieber, against Braun’s advice, asks if he can sing Usher’s “U Got It Bad” to the man who made it a chart-topping hit. Bieber’s pitch-perfect a cappella rendition impressed the Grammy-winning superstar, who decided in due haste to form a new company with Braun, sign Bieber and get him a record deal. “Meeting someone that talented is a once-in-a-lifetime chance,” Usher says. “He was cute, so I knew the girls would love him, and with that voice, it was, like, ‘Wow — if we guide, nurture and direct him right, the possibilities could be endless.’”
But their enthusiasm wasn’t shared by most major labels. “Everyone passed on Justin,” Braun says. “They all said the same thing: ‘He’s too young.’ ‘No one’s broken from YouTube.’ ‘Go get a TV show; you can’t compete with Disney or Nickelodeon.’ ” Even Arista, part of RCA/Jive Label Group and headed by Barry Weiss, a key figure in the success of teen phenoms Britney Spears and Backstreet Boys, missed the boat — though Braun says the label’s CEO and chairman claims Bieber never made it that far up the food chain. “Barry’s like, ‘If it had gotten to me, he would have been mine,’ ” Braun says. “There are definitely people who have rewritten history, like they didn’t turn Justin down when they did.” Not that Braun is complaining, as he casually notes: “If everyone didn’t say no, Justin Timberlake and Usher would have never seen Justin. I’m pretty happy with how things turned out.”
Justin Timberlake: perhaps the best example of a seamless transition from teen heartthrob to credible adult artist since Michael Jackson. Emulating Timberlake’s career trajectory is team Bieber’s goal, and, like Usher, the pop superstar saw something in Bieber that spelled potential. “We were flown to Justin’s house in Memphis,” Braun says. “He and Ken Komisar, who runs [Timberlake’s Interscope-affiliated label] Tennman Records, offered us a deal, but it wasn’t what we wanted. Then Usher brought L.A. to the table.” The resulting joint venture, which took six months to come together, is a straightforward 50-50 split between IDJ and the newly formed Raymond Braun Media Group. Bieber’s take: “L.A. Reid is an OG. He gets it. It’s all about the music with him.” Adds Usher, “There’s no better executive to be associated with Justin than L.A.”
Reid, however, is not convinced that an offer from Timberlake actually existed. “I don’t have any evidence that supports it,” he says with a smirk. “I thought I was being worked when I heard Justin Timberlake’s name. I’m like: ‘Yeah, right. It’s Justin Timberlake! He’s one of the biggest stars in the world.’ I didn’t buy it.” To that end, Braun doesn’t deny putting pressure on Reid. “We did use Timberlake as leverage,” he says. “And L.A. stepped up.”
If you’re not Usher, getting a face-to-face sit-down with L.A. Reid — whom Braun describes as “a legend” (“he and Babyface made Atlanta legit”) — is not easy. Kanye West’s first meaningful contact with the exec was in the audience at the 2004 Grammy Awards. Reid was sitting with the Outkast guys, who were coming off a stellar two-year run, when West, a mere hip-hop plebe back then, approached him modestly. “He said, ‘Because you’re with Outkast, I think you’ll understand what I’m trying to do with my career,’ ” Reid recalls. “We’ve worked together from that point on.” Today, Reid refers to West as a “pure artist” and himself as “the luckiest man in the world.”
But Reid makes his own luck. Tasked with running one of Universal’s most successful labels and overseeing the development of such game-changing artists as West and Rihanna, his schedule is jam-packed with meetings, dinners, backstage parties and greenroom hangs. He’s often the last person to leave IDJ’s 28th floor offices in Manhattan’s Worldwide Plaza. “You see the sunglasses, the suits and think, ‘This guy is Hollywood,’ ” Braun says. “But L.A. is extremely hardworking. He is someone who I can call any night at 11 p.m. and know he’s still in the office listening to records.”
And for good reason: Today’s music industry is a shell of its former self, with album sales down in the double digits each year and staffing slashed by almost 60 percent in a decade. While still very much a “song man,” Reid has had to learn to put the business of music on an equal plane with the artistry. “I’m not a fan of people losing their jobs — so I don’t mean to sound callous — but 10 years ago, the record industry was intoxicated with its own success, and it became bloated,” says Reid, who, halfway through his Arista stint, attended an advanced management program at Harvard Business School. “The realities of the times have forced us to get smarter, to shrink and readjust.”
The most vital lesson he’s learned from 22 years working at record companies? “That you keep the doors open and the lights on and a star will walk in,” he says. “I learned to stay in business. People are still buying music, dancing to it and dressing like it. They’re using it to sell cars and CoverGirl makeup, so we sell product lines with our artists. The popularity of music is at an all-time high. How we monetize it is sometimes a moving target.”
That’s especially true of a label like IDJ, whose roster runs the gamut from rock (Bon Jovi, the Killers, Fall Out Boy) to pop (Bieber, Rihanna, Mariah Carey) to hip-hop (West, Ludacris, Rick Ross). Navigating a finicky youth market that believes recorded music should be free requires vision and leadership, and when it comes to Reid, people listen. Case in point: Inspired by power couple Jay-Z and Beyonce, Reid persuaded his staff to go on a two-week master cleanse. The result: an average weight loss of five to eight pounds. “L.A. outlasted us all,” publicity chief Laura Swanson says.
The music business equivalent: advising Jennifer Lopez, on her last obligation to Epic Records, her label of 10 years, not to release a song called “Louboutins” as a single. “It wasn’t a hit,” Reid says. “Usually, big hit songs are about love, pain, fun, compromise — but shoes?” After hearing the track, he asked Lopez’s manager, Benny Medina, a close friend, to put the diva on the phone and told her as much. “I said: ‘Sweetheart, don’t do this. I don’t have anything to gain from telling you this; I’m not trying to lure you in as an artist. This is not the right thing to do.” Lopez’s reaction? She asked for a meeting the following week. The end result: Lopez still released “Louboutins” as a single, and it stiffed. Her next album is due this summer — on Island.
Lopez would be wise to listen to her new label boss. Under Reid’s watch, Carey saw a tremendous resurgence in popularity, selling a staggering 10 million copies of her 2005 album The Emancipation of Mimi worldwide — a feat Lopez, Medina and company no doubt look upon with envy. Just don’t call it a comeback. “I don’t think of myself as some magician who can bring people back,” Reid cautions. “The plan with Mariah was to make a great record. It’s about the music: I knew it was good, Mariah knew it was good, we thought it would catch on, and it did. But I’ve never approached it as a comeback. The one time I tried that with Janet Jackson, it didn’t work. We were great friends before, but then after the record [2008’s Discipline], we weren’t friends anymore. It really broke my heart.”
Reid says he doesn’t live with regret, but dig a little deeper, and it becomes clear that one major hurdle from Reid’s past is coming into play with Bieber. Weeks from turning 17 on March 1, Bieber and his $100 million voice are changing. When this natural process of human development occurred with Usher, Reid, by his own admission, “lost it.” He recounts those trying months back in 1994: “I wasn’t there for Usher. I heard him at a showcase, and he couldn’t sing. I was embarrassed. It was like: ‘Damn, where’s the voice? What happened to his tone? Where’s the power and the range?’ It was all gone. I wanted to drop him. I wanted to be out of business with him. I broke his heart. I broke his mother’s heart. It was a very tough period in both our lives. Then someone said to me: ‘Don’t be a fool. Don’t sell your stock in Usher. He’s still going to be a star. He’s everything you thought he was the day you signed him.’ And that person was Puffy.” Says Usher: “No man is perfect and no executive knows how to make all the right decisions. I was shielded from a lot of it. My mother felt it more than anything. But losing my voice f---ed me up. I had to figure it out.”
It should be no surprise, then, to learn that the person hired to help Bieber navigate the tricky world of puberty is vocal coach Jan Smith, who got Usher through his early performances. “She has me doing vocal conditioning exercises regularly,” Bieber explains. Today Reid, a father of five, says he’s better prepared to handle Bieber’s maturation. “I know how to be encouraging now,” he says. “I wasn’t that way to Usher. I didn’t give him the same kind of love and support at the time. But Puffy was right.”
Reid was right, too. In choosing adult music for Usher to sing from the get-go, making the transition to career artist was a smoother ride than most. Says Reid: “Usher asked me once, ‘Why did you never allow me to be a child star?’ I said, ‘Because I wanted you to cross the threshold.’ I didn’t want him singing Radio Disney music, I wanted really heartfelt R&B songs, and partly because of that, Usher still has a career today. Justin doesn’t do the same thing as the Jonas Brothers or Miley Cyrus; his is a mature blend of pop and R&B music. It will have a longer shelf life.” Working tirelessly for two-thirds of the year — with a mandatory two days off each week — also helps.
Of course, with Bieber’s runaway success, it’s all about taking advantage of the present, which means working every angle. In fact, when it comes to career building, Braun sees album sales as a loss leader. “There is a certain amount of truth to that,” says Reid, who notes that radio acceptance has been a struggle for Bieber. “We haven’t had what I consider a huge amount of radio success, but Justin doesn’t just sell music, he sells everything: concert tickets, dolls, books, fragrances, even nail polish.”
Tom Bennett, president of Universal-owned Bravado, which licenses and manufactures Bieber’s diverse product line, says Bieber has achieved boy band-level sales as a solo artist, generating revenue in the hundreds of millions. “We’re selling millions of calendars, posters have been humongous, dolls and millions upon millions of T-shirts,” he says. “And it’s a global phenomenon. We had a seven-figure order for trading-card packs in Israel.” Not bad — Israel only has 7 million citizens.
The demand for Bieber product is so intense, Bennett says, that Bravado wasn’t able to manufacture and ship the millions of dolls ordered by North American stores in time for Christmas. Faced with the harsh reality of a Bieber-less Christmas, retailer Toys “R” Us made the brash decision to ship the product itself. “They paid to air-freight the dolls,” Bennett says. “It cost them a lot of money, but they were able to advertise that they were the first retailer in America to sell the Justin Bieber doll. They had lines around the block in most of their stores.”
How does Bieber handle complex financial matters such as merch splits, royalties, publishing and strategic corporate alliances — like a recent hiccup wherein Bieber tried to upload a new video and was told clips could no longer be housed on his YouTube page but had to appear on Vevo, the video portal that has deals in place with three of the four major labels? The power of knowledge is key, Braun says. “I make him talk to his lawyer and business manager for at least one hour once a week,” he says. “I want him to understand everything so that he never has any fear about decisions being made for him.”
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The 12-year-old piano prodigy caught the eye of Ellen DeGeneres with his cover of
Lady Gaga’s “Paparazzi.” She swiftly signed the singer to her own eleveneleven label.
Her Britain’s Got Talent performance of “I Dreamed a Dream” went viral and created a global superstar. Signed to Simon Cowell’s Syco, Boyle has sold 10 million albums worldwide.
As an unsigned act, she had one of the most popular pages on Myspace. So much so that when Caillat released her first single, “Bubbly,” it shot to No. 5 on the Billboard Hot 100.
Bring up former child stars like Aaron Carter, who has graduated to Dancing With the Stars (and a stint in rehab), and Reid’s response is “what a sad thought.” In fact, it’s career failures that motivate Bieber every day. “Justin doesn’t study the people who made it, he studies the people who haven’t,” Braun says. “He likes to look up the so-called Justin Biebers before him who didn’t go anywhere and see why. The general feeling we get is that it had nothing to do with their talent and everything to do with their personal life.”
Herein lies a potential problem for Bieber — who is, after all, a 16-year-old boy. Google his name, and inevitably “kissing Selena Gomez” will pop up on auto-fill, followed by, “Justin Bieber dead.” “So, what — they want him dead for kissing Selena?” Braun cracks. “Look, he’s growing up and handling these things pretty well. The other day, he dealt with some haters, and Justin said, ‘The guy isn’t hating me, he’s hating the concept of me.’ ”
Such profundities make the Bieber team especially proud as it heads into its biggest promotional week yet: Along with Never Say Never’s nationwide release, Bieber will duet with Usher during the Grammys, and more TV appearances are scheduled including Jimmy Kimmel Live! on Feb. 10, Chelsea Lately and George Lopez on Valentine’s Day and The Talk later in February. But when it comes to making a pop star, it’s not just about doing the work. “It’s like falling in love,” Braun says. “To be successful, part of it is instinct, part of it is talent, and another part is being in the right place and the right time to meet that right person. You need to be somewhat blessed.”
“It takes time to be an icon,” Usher says. “That’s why I’m here — to make sure he doesn’t forget that. But the hardest part is done: He has a majorly successful album and an incredible fan base that wants to grow with him.”
Braun insists Bieber’s best days are ahead of him. “Watch what happens when Justin’s 19,” he says. “People forget that Michael Jackson was considered done after the Jackson 5, yet he changed the world.”
For his part, Bieber isn’t looking too far forward. “I don’t like to focus so much on the future,” he says. “Right now I just want to love what I’m doing, and that’s making music and making people smile. I hope I get to do that for a long time to come.”