In a recent New York Times article, Converse announced its plans to open a recording studio for struggling bands in Williamsburg. In the same piece, media critic Douglas Rushkoff pointed out that this is “just like the great painters… in the Renaissance, when it became impossible to sustain oneself as an artist without a patron.” This inspired us at Flavorpill to look back at the evolution of brand/band connections. Follow along as we trace the history, from early merchandising debacles to the present, when brands rely on artists to create a cool cache, while bands need brands’ financial support now that the record label system has come apart at the seams.
1. The Beatles’ mismanaged merchandising rights
The first artist to make a mint off selling his likeness was Elvis Presley in the late ’50s. And the artists who quickly pissed away what was calculated to be over $100 million dollars in 1963 money from licensing deals of their likeness were the Beatles. Granted, likeness licenses — in which an artist grants marketers the right to reproduce his image as a bobblehead doll or on T-shirts — were an untapped market at the time, and only hugely successful artists could earn much money by selling them. In the early ’60s, very few people would have understood what a massive potential revenue source these licenses could have been for the Beatles.
At the time that their manager, Brian Epstein, signed their rights away, the Beatles were just starting to get an overwhelming amount of requests. Even though Epstein notoriously insisted on making all major decisions about their affairs personally, he handed licensing rights off, on the advice of the band’s lawyer David Jacobs, to Nicky Byrne as a subsidiary of his NEMS management company. Foolishly, both Epstein and Jacobs signed off on a 90/10 split, giving the Beatles only 10% of the earnings from every Woolworth’s lunch box with the band’s faces on it when the industry standard was closer to a 20/80 split in favor of the band.
Within six months, Epstein and Jacobs sued to get the split changed to 49/51, still far below the standard but somewhat improved. All the ensuing lawsuits and underhanded direct licensing that happened in the wake of Nicky Byrne’s little caper, however, turned off all credible retailers, and hundreds of millions of dollars in Beatles merchandise was dropped off the floor of major retail outlets until 1967, when the final court verdicts were handed down over who was to be paid what. Unfortunately, by then John Lennon had let drop that notorious bon mot about the Beatles being more famous than Jesus, and the heartland of America was not so into buying Beatles memorabilia as they were into burning it — thus rendering them less than desirable faces on a coffee mug in the local department store.