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From Marcy to Millions: How Hov became the ultimate businessman

10K80 June 30, 2017
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jay z

Jay-Z went from being a hustler on the streets of Brooklyn to an international icon. How does a rapper out of the Marcy Projects become a mogul? Genius marketing.

Over the years, Hov has managed to market himself and his brand by collaborating with the right companies and people.

Jay-Z’s work with Sprint for his album 4:44 was incredible. The package? Six months of streaming service Tidal for free, exclusive access to Jay-Z’s album, and all the content surrounding it.

For the marketing campaign Jay-Z placed ads all over NYC, including several subway stations like the Jay St. stop in Brooklyn as well as Times Square. Signs were also spotted in Los Angeles.

The Brooklyn rapper didn’t stop there. He proceeded to premier an ad during Game 3 of the NBA Finals. The ad cast Mahershala Ali and left Jay-Z fans with hints of a possible short film featuring Academy Award-winner Lupita Nyong’o as well as Donald Glover.

To make the hype even crazier, Tidal tweeted last night that you have to sign up for the streaming service before midnight in order to experience 4:44.

If you didn’t sign up for Tidal before midnight, you are basically fucked. The only way you could experience the exclusive content is by switching to Sprint.

Genius marketing. Especially since Sprint acquired a 33 percent stake of Tidal, bumping the music streaming service’s worth to $600 million. The partnership also makes Tidal available to Sprint’s 45 million retail customers.

Looking back, this isn’t the first time International Hov has used his business savvy to promote an album.

Remember Magna Carta Holy Grail? Jay-Z paired up with Samsung to release his 12th solo album on July 4th back in 2013.

https://youtu.be/ZNlciK_2qCA

You know what’s boss af?

Pairing up with Samsung and not only striking a $20 million deal, but having them pay for the marketing and front $5 million to purchase 1 million copies of your album.

Let’s take another look at a small step Jay-Z took and turned it into a big business. His promotion of Armand de Brignac, the iconic gold bottle with an ace of spade on it.

No one had ever really heard of the champagne before Jay-Z premiered it in his video for his hit song “Show Me What You Got.”

Back then everyone was poppin’ Cristal, but Jay-Z was responsible for everybody changing their expensive beverage of choice.

So why Champagne Armand de Brignac? Three minutes into the video above you see a waiter bring Hov a bottle of Cristal Champagne but he dubs it and tells him to fetch the gold bottle with the ace of spade.

Why all the beef? Hov boycotted Cristal because of offensive comments from the managing director of Cristal, Frederic Rouzaud. Rozaud spoke to the Economist in regards to the association between Cristal and the bling lifestyle and if it could actually hurt the brand,

“That’s a good question, but what can we do? We can’t forbid people from buying it. I’m sure Dom Pérignon or Krug would be delighted to have their business.”

Hov pulled the champagne from his small chain of popular sports lounges — where bottles of Cristal sold for $450 and $600. In response to Rouzaud’s comments, he said,

“It has come to my attention that the managing director of Cristal, Frederic Rouzaud views the ‘hip-hop’ culture as ‘unwelcome attention,”’ Jay-Z said. “I view his comments as racist and will no longer support any of his products through any of my various brands including the 40/40 Club nor in my personal life.”

Guess what Hov’s next move was? Copping his own champagne. Jay-Z was paid millions of dollars and equity in Sovereign Brands to promote the champagne brand, Armand de Brignac, that no-one had heard of.

In Empire State of Mind: How Jay-Z Went from Street Corner to Corner Office, Zack O’Malley Greenburg broke down Jigga’s profit:

“The production cost per bottle of Armand de Brignac is about $13; the wholesale price is $225. The maximum output is 60,000 bottles per year. If Jay Z splits the $212-per-bottle profit evenly with Cattier and Sovereign, a back-of-the-envelope calculation suggests his annual take would be a little over $4 million.”

Sheesh!

Moving on to the next venture that Jay-Z absolutely crushed, his work with search engine Bing and his autobiography Decoded was revolutionary once again.

Bing and Jay-Z collaborated and created probably one of the best marketing campaigns the web has ever seen. Media was calling the campaign “Rap’s Rosetta Stone.”

For the collab, Bing and Hov dropped a page of the book every day in a new location over the course of a month leading up to the autobiography’s release. Each location was inspired by a different story on each page.

https://www.instagram.com/p/BV7TfsvDBa0/?tagged=decoded&hl=en

Pages were placed in 13 major cities in the US. This allowed fans to experience Hov’s story in real time, putting the entire biography in context.

A bronze plaque was installed in the Marcy Projects, an entire Cadillac was wrapped in a page and paid homage to the birthplace of hip-hop, and a page was even transcribed onto the floor at the Delano Pool in Miami.

Facebook

The campaign helped Bing acquire an 11.7 percent increase in visits, enter the global top 10 most visited sites, and earn 1.1 billion media impressions.

Jay-Z’s Facebook followers grew by 1.1 million and Decoded was a NYT bestseller for 19 weeks. This was all in the course of one month.

https://youtu.be/XNic4wf8AYg

Let’s not forget about Jay-Z’s entertainment company Roc Nation. Founded in 2008, the full-service entertainment company houses a record label, talent agency, a touring and concert production company, music, film, and television production company, and a music publishing house.

The client list includes some of the world’s most recognizable names: from Rihanna, Shakira, J. Cole, and Big Sean to Yoenis Cespedes, Kevin Durant, Dez Bryant, and Robinson Cano.

To jump start Roc Nation’s music distribution, Hov signed a 4-year distribution deal with Sony Music back in 2009. Following their success in 2010, Roc Nation partnered with London-based entertainment company Three Six Zero Group.

In February 2013, Roc Nation made major moves, signing a worldwide music publishing administration deal with Warner/Chappell Music.

Even after the Sony deal expired, Hov managed to get a multi-year partnership with Universal Music.

Music is not Roc Nation’s only money maker. The sports division brought in a whopping $19.2 million as of September 2016, representing less than 20 clients. That is a major move.

Peep Dez Bryant throwing up the Roc.

https://www.instagram.com/p/BKhW2V9hwJd/?taken-by=dezbryant&hl=en

Jay-Z has got the Midas touch. Just this year, Roc Nation announced the formation of Arrive, a new division of the company that will focus on investing and nurturing promising startups. Hov will own the past, present, and future.

What can’t this man do!

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