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Performing "Don't Stop" at the FleetCenter, Boston, MA September 3, 2002
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Topic: Jagger interview and article on Fortune - September 30, 2002 Return to archive
09-15-02 06:03 PM
CS Mick Jagger on the Business of Being a Stone
Interview: The tours, the records, and the royalties have made the Rolling Stones the wealthiest band on the planet. Who says a rolling stone gathers no moss?
Monday, September 30, 2002
By Andy Serwer

Serwer: Maybe we could just start very broad. You were just playing music for many years and it just sort of evolved as an organization, didn't it?

Jagger: Yeah. Obviously the music business when we started was a slightly different business from now, but it has a lot of parallels. A lot of money is made in touring--and [in] all the sort of adjuncts of touring: merchandising, TV, like that.

In the beginning when we started, there wasn't any money to be made from touring. There wasn't a touring industry. As far as rock music was concerned, there wasn't really any money in it. The touring shows in the old days were lots of lots of acts. There might be eight to 10 acts; you'd go out and do your two numbers, your hit record or your next one or your last one and that was your lot. And that's how we started. And that's how tours were. Obviously there was somebody maybe who made money but it certainly wasn't the act. And if you were lucky, you got to do your own show, but I don't think you ever made money out of that, not really. And then if you were really good in America, for instance, you got to play in Vegas and that was the only time you made money. Elvis never toured, so there was no role model, for whatever reasons, who cares, but he never did and the only thing he ever did was Vegas. Why was that? Well, it was perceived that the only time you could make money was in Vegas. So Elvis did Vegas, [but] he never did a tour. It was a stupid idea, because he could have done all right. There was no touring industry until approximately 1969, when we were one of the first bands to create or be part of the burgeoning touring industry. Of course by then records were selling a lot. Recorded music and the business of it is a totally separate subject from the road and it has a completely different business model and of course one's linked to the other. But for years they were never really linked at all. In fact, you could never get the two groups to talk to each other. It was a nightmare.

I'm not first and foremost a businessperson. I'm a creative artist. All I know from business I've picked up along the way. I never went to business school, really. What I studied at university was really macroeconomics. I never studied business, I kind of wish I had, but how boring is that? So I only know this stuff I've picked up, and I'm not a great expert on the record industry. I don't claim to be. I've been ripped off like everybody else. I think it's bizarre the way it all works. It's all tied to tradition, which always puts the artist at a disadvantage. But I'm not really here to moan about that. I'm just pointing out that in the early days of the record industry, you got paid absolutely nothing. You got nothing from records. The only people who earned money were the Beatles because they sold so many records and they were so much on the radio, that the one thing they did get was money from song writing. The people who wrote songs were probably better businesspeople than the people who sang them, because in the old days, the people who sang the songs were not the same people who'd write them. So if you wrote a song, you got half of it and the other half went to your publisher. In the old days the publisher had to sell the song so he had to really earn his 50%, otherwise it never got recorded. And there's money in that and that's another separate business, which is obviously very allied to the record business.

The business of touring itself probably started in the '60s where we started to do tours that had some shape to them--that is, they were all arenas. After Madison Square Garden, you went to the LA Forum and you didn't jump around to all these different gigs, with no sound and no lights and no nothing, so you took your own production with you and you used a select group of promoters to promote your shows. And so you knew okay, on the East Coast we're going to use him and in the Midwest, we're going to use him and in LA, we're going to use him. And I'd put them all in a room and talk to them, and say, okay, tell me what you're going to do. And eventually this evolved. There were very strong guys and very professional people in certain areas. [But] there was no expertise, no business, no industry to do the nuts and bolts. There was no one to put up the sound, no one to put up the stage. We had to bring them all in from various other industries, like Holiday on Ice--people that rigged things, people that knew about arenas. No one had done this before. Or if they had done it, it had been just walking in and hope for the best, with no rhyme or reason or anything. If it would be at Shea Stadium, they had two little speakers and a chair and that was it. The next step from that was going to stadiums in an organized fashion, so you would target--total no brainer, you know--a big city like New York. If a smaller market can't do it, you do an arena. So this evolved into doing stadium shows and spending big money on the production and making them something that people could remember and would want to come back to, and so on. And that started evolving in the '80s. Before then, it was really random. You'd do an arena tour and some guy in Kansas would say I think we could do a stadium, and you'd turn up and it wouldn't be full. And you wouldn't have any production. So we said we're not going that way again. So we're going to do stadiums. But then in those days of course there was tremendous resistance to paying any money for tickets, but you couldn't do this without some income. We want to do a show but we can't do a show unless--you know. And it was still the '60s and remnants of that still exist. There are people still out there--there's a critic in this town who always moans about our ticket prices. He even apologized to me yesterday, because you know ticket pricing is a very complex subject.

Serwer: Is it all supply and demand?

Jagger: Well, no, it isn't really.

Serwer: You think about elasticity of the pricing and all that.

Jagger: Well, Barry Diller and I had a very brief conversation about it. He was talking about the same thing. You have whatever it is, a car, or a tube of toothpaste, or a ticket to the Knicks. A tube of toothpaste and a car are always available, and a concert is really a one-of-a-kind event. You may pay in Boston 50 times, but every concert may be the last one. It's not a car, which is supposed to be the same as the last one, and it's not a CD, which is supposed to be all the same. So there's a very different thing for a car or toothpaste and a concert. So it's a unique event. Whether you sell it as that or not, but it is. So you go see the Knicks play whomever, and you know it's going to be a good game, so you are prepared to pay the market price. Okay, what should the market price be? So you pitch it at the market price. So if U2 or Madonna costs $100 (I'm making these up) you don't want to be charging $200. That's my belief and I try to keep the Rolling Stones ticket prices within the market price range, the same way as a car company I'm sure does. You know you're not going to charge $200,000 for a Lexus. You're just not going to get it. You will for a Rolls Royce, but that's another deal. But the problem comes in the ticket pricing when you've got a big town and a select amount of tickets and a big demand. So what do you do? And what happens now is you sell a ticket for $100--$200, maybe $250, and someone else sells it on for $2000. It's not really benefiting the consumer.

Serwer: And the money's going into some guy's pocket down on lower Broadway.

Jagger: Yeah, it used to be funny looking guys, grubby. Now it's everyone sitting at home. And it's much more organized on the Internet than it ever, ever was with the little grubby guy who didn't know if it was even a real ticket. It's a question that people have asked before, but I'd rather sell the tickets at $200, and I said to this guy at the Boston Globe, you would be killing me if they were $1000 a ticket, for the theater. You'd be murdering me in your newspaper--rightly or wrongly. One, it's America. We're not living in a socialist society where we're all paid so low and no one can afford [it] and we give it away for nothing. But I said, but you know, you probably don't mention the fact that all these people are paying all this money and it's sort of legal, right? And who's benefiting?

Serwer: I think there's a whole lot of ignorance on the part of the press in terms of the free market stuff: "Well, it cost only $10 30 years ago." It sounds like you've put a lot of thought into this.

Jagger: Yeah, it's one element of the business thing that I try to really control as much as I can control it. Obviously I don't do it on my own, but I do try to be cognizant of all these things, and it's not only in the United States; things get slightly more weird when you start going to Japan or China. Japan one minute, China the next. Then you go to Spain where you're playing in a socialist town and the socialist town gives you half your money and that benefit is passed onto the consumer so the ticket prices are half the normal cost, so you're kind of like, okay, so it's $25 a ticket. So it's the same show that you're seeing in Boston for $250. It's a globalized world, but in the world of touring, [but] it's not very globalized in my opinion. I mean the only global thing is that we're doing the same numbers. The rest of it is really not.

Serwer: It's like any big organization that's trying to do business or be in different markets. You have to adapt. You don't want to say, like Microsoft selling software in different countries. They have different codes, different sales people.

Jagger: Sure. Well, Coke is a different price in Indonesia than it is in Boston.

Serwer: Let me ask you about the Rolling Stones as an organization. Is the Rolling Stones a company?

Jagger: No. It's a partnership. I don't really want to talk about it too much, but yeah, it's not a company. Anyone can know that.

Serwer: So the partnership is the four guys.

Jagger: Yes.

Serwer: So that's a permanent partnership--I'm just interested in the organization of the band. So you have the partnership at the top with the four members.

Jagger: Yes.

Serwer: And then you have different businesses--licensing, merchandizing, the tours, the records.

Jagger: CDs, records, music.

Serwer: Can you break that down? How does it all work then?

Jagger: Well, you've got income streams like any other company in the items you just enumerated. And they all have different business models. They have different delegated people that look after them, run them--sometimes different legal people to make the deals, that specialize in intellectual property or specialize in other forms of business, and the income that they generate. But we decide what the main ones are so each one has a slightly different business model and different people looking after it. And they have to interlock. That's my biggest problem.

Serwer: You don't have a CEO.

Jagger: No, we have a business advisor, Rupert Lowenstein, and he advises us on money. That's his job. He's a business advisor. And he also has opinions about other things, but he's not like--these people don't exist anymore--these mythical manager figures.

Serwer: You mean like the Allen Kleins of the world.

Jagger: Yeah, but they only did records. Even Allen Klein never pretended to do touring.

Serwer: You need someone like Brian Epstein.

Jagger: Yes, exactly, going all the way back.

Serwer: And you had that guy in England who did the Sex Pistols. That was sort of the last one.

Jagger: Malcolm McLaren.

Serwer: Malcolm McLaren was sort of going back to Andrew Lou Golden.

Jagger: Right, he was trying to be Andrew Lou Golden. But there was no touring in those days. I mean I'm not sure how Malcolm McLaren could handle a tour like the Rolling Stones. You know what I mean? It's huge. And it has all these traditions and things like every other business that's been around for quite a long while. I'm sure that if you looked at it and analyzed it, you could say well, that's f----d up. That shouldn't be like that.

Serwer: So if you brought in McKinsey Consultants, they'd probably say, this place is not run well.

Jagger: No, of course it isn't run well. No show business organization is run well. There's always too much money paid out. I mean business people, lawyers probably get far too much. It's all weighted like that. As I was explaining to you about the publishing and records, I mean there are just traditions that have been slowly tried to break down but they still exist. And they expect to get certain things for doing very little.

Serwer: I know that feeling myself.

Jagger: Oh, I'm not saying everybody. Some people work like f----ng dogs, and often the people that work like dogs aren't the ones that get paid.

Serwer: Can you break down for me the various parts--who is in charge of the licensing? How does that work? Is this a catalog that we're talking about?

Jagger: Licensing like merchandising.

Serwer: Like T-shirts.

Jagger: Normal things that rock bands sell, t-shirts and items like that, clothing, jackets. I don't know how many--over 50 items. Most of it clothing. Some of it other things. We have quite diversified stuff on this tour. We have underwear made by Agent Provocateur and other much more expensive items that we never had before.

Serwer: What company does that? Is that the same one you've used for a long time?

Jagger: We have a company here that's all changed around and stuff. I wish I could just wave a magic wand and all the merchandise [would] come out. It doesn't work like that. Charlie and I do all the legwork and imaging for the t-shirts and all the merchandising. I'm not saying the company doesn't do some, they do. But we spend an incredible amount of time on it and we're very careful. I'm not a control freak but I do like to see what they're selling. And you have to come up with your own ideas. And they don't create the images, the company; we have to create the images. It usually comes from work with artists or designers that create different artwork for CD, stage work, and so on and so on. We do band imagery, new stuff, so we try to turn it over and change it every time.

Serwer: So the catalog, which is the rights to your songs...

Jagger: You want to talk about songs and song writing? It's a whole other ball of wax.

Serwer: So how does that work? Who runs that for you? Do you own all the rights to your songs?

Jagger: No, we do not own all the rights to the songs, though we are paid for all the songs. And quite well paid. It's not a bad deal. Up until 1969, a lot of the back catalog was controlled by Allen Klein and his companies and since 1969, we've had various deals but more or less we've controlled everything from then on. And we run that as a business and we don't run it particularly aggressively to be honest.
09-15-02 06:09 PM
CS Now the article, also from Fortune

Inside the Rolling Stones Inc.
The Rolling Stones are an astounding moneymaking machine. Here's how Mick Jagger & Co. have perfected the business model behind the most successful act in rock & roll today.
Monday, September 30, 2002
By Andy Serwer

Mick Jagger is wearing a cool pink shirt, slim black trousers, and bright red socks. His hair is--well, there's a lot of it. But don't let the look fool you. Mick is all business. That's business with a capital "B," as in the stuff we write about all the time in the pages of FORTUNE.

I'm up in Jagger's suite in Boston's Four Seasons hotel just before the Stones kick off their worldwide Licks tour. Mick turns down the volume on a boom box, packs off two of his young kids with their nannies, and then holds forth on product pricing, economics, and business models. Jagger is eloquent and informed, but he has a disclaimer: "I don't really count myself as a very sophisticated businessperson," he says as he leans back on the couch. "I'm a creative artist. All I know from business I've picked up along the way. I never really studied business in school. I kind of wish I had, kind of, but how boring is that?" he says with a grin.

Like the protagonist in one of his most devilish songs, Mick has been around for many a long year. He had plenty of smarts to begin with, and now he has 40 years of music industry experience under his belt. Jagger may be getting a trifle old to rock & roll--he'll turn 60 next July--but from a business perspective he's at the top of his game. Which makes sense in a way. After all, that's a typical age for a CEO of a large, multinational organization. (Okay, so most of the CEOs we follow don't have to swivel-hip their way through "Midnight Rambler," but you get the point.)

There are, of course, plenty of detractors who say the Rolling Stones should pack in their guitars and drumsticks. "Way old," they sniff, "and way irrelevant." I have two responses, one subjective and one objective. Subjectively, the Rolling Stones sound pretty damn good, even after all these years. And objectively, if they're such has-beens, then how do you explain the band's phenomenal commercial success over the past decade? No, they aren't writing groundbreaking songs anymore--in fact they haven't really recorded any new material of note in 20 years--but we sure are listening to their old stuff. A lot. And buying concert tickets. Millions and millions of them. And that's the wrinkle here. Even though the Stones have been in what you might call a creatively fallow period, we want to hear them more than ever. Couple that with the fact that they have perfected their business model, and it's easy to understand why they are such an astounding moneymaking machine.

The bottom line is this: "The only rock & roll band that matters," or "the greatest rock & roll band in the world," or whatever you want to call Mick, Keith Richards, Charlie Watts, and Ronnie Wood, they are far and away the most successful act in rock today. Since 1989 alone--the beginning of the modern age of the Rolling Stones (more on that later)--the band has generated more than $1.5 billion in gross revenues. That total includes sales of records, song rights, merchandising, sponsorship money, and touring (see charts: "Revenue" and "Packing Them In"). The Stones have made more money than U2, or Springsteen, or Michael Jackson, or Britney Spears, or the Who--or whoever.

Revenue in millions
Royalties $56.0
Album sales $466.4
Tour revenue
Ticket sales $865.3
Merchandise $135.9
Sponsorships $21.5
Total Stones Revenue 1989 to present $1.5 billion

Packing Them In
Top-grossing North American tours of all time.

$ million Artist Tour
1 $121.2 The Rolling Stones Voodoo Lounge, 1994
2 $109.7 U2 Elevation, 2001
3 $103.5 Pink Floyd The Division Bell, 1994
4 $98.0 The Rolling Stones Steel Wheels, 1989
5 $89.3 The Rolling Stones Bridges to Babylon, 1997
6 $86.8 'N Sync Popodyssey, 2001
7 $82.1 The Backstreet Boys Black and Blue , 2001
8 $80.2 Tina Turner Twenty-Four Seven, 2000
9 $79.9 U2 Popmart, 1997
10 $79.4 The Eagles Hell Freezes Over, 1994
11 $76.4 'N Sync No Strings Attached, 2000
12 $74.1 New Kids on the Block Magic Summer, 1990
13 $68.2 Dave Matthews Band Dave Matthews Band 2001
14 $67.0 U2 Zoo TV Tour, 1992
15 $64.7 The Rolling Stones No Security, 1999

Sources: Billboard Boxscore, Soundscan, RIAA, ASCAP, BMI

Reporter Associates: Julia Boorstin and Ann Harrington
09-15-02 06:33 PM
CS For the Keith Richards' interview click here