Justin Bieber and The Boost Economy. Really.

by cv harquail on September 5, 2012

Even pop stars are creating their own Boost economies.

Yes, Justin Bieber is a pioneer of the New Economy.  According to this profile of Bieber’s manager, Scooter Braun, by the New Yorker’s Lizzie Widdecombe, there’s a whole Boost Economy built around the floppy-haired teen idol.

The Bieber-Braun business network is a great demonstration of Boost processes at work in an unexpected place.

Justin Bieber’s manager uses three key Boost economy tactics to build the businesses of his group of artists. Braun uses:

  1. Interindependence – both economic and social
  2. Transparency, and
  3. Creating & Releasing Shared Value

InterindependenceJustin+Bieber+Scooter+Braun+l_2BT8CjxErm.jpeg

Economically, Bieber and each of the artists that Braun manages has a financial stake in their own success. What’s new here is that they also have a financial stake in each others’ success.

Senior artists are expected to help introduce the new artist to their own audiences, to appear with them, and to promote the younger artists whenever they can. In exchange for sending this boost downstream, the seniors artists get a cut of the new artist’s gross.

Boosting ‘up stream’, the senior artists’ own performances and sales contribute to the incomes of other, even more established artists with whom Braun has business arrangements.

For example, a portion of Bieber’s album sales gets sent up to a production company that Braun owns with R&B star Usher. Braun enlisted Usher to help get Bieber signed to DefJam Records, a label run by Usher’s own mentor.  Then, both Usher and his pal Ludacris boosted Bieber’s initial sales by appearing together in one of Bieber’s early videos.

With this Boost arrangement, whenever Bieber sells a record, Bieber, Braun, Usher, Ludacris, and DefJam all benefit.

Bieber has a similar downstream financial investment in the career of newcomer Carly Rae Jepsen. He introduced Jepsen to Braun, promoted her sones with his own video, and tweets regularly about her performances.

Braun has linked his artists’ business outcomes to each other’s, so that the efforts of each artist build the portfolios of the other artists, and to Braun’s.

Social Interindependence

The same kind of two-way boosts are created though the artists’ social relationships.  The reputation and audience relationships of each of Braun’s artists contribute to and depend upon the reputations and relationships of other artists.

“Cross-promotion is all part of the interdependent business culture that Braun has created.“ Each established artist lends his or her positive reputation and celebrity to the newcomers, helping to legitimate the new artists as the next big thing. In the other direction, the association of the new, hip artists with an established artist makes the more established one seem savvy and culturally relevant.

Meanwhile, mentoring their own protégées gives the established artist a reputation for gravitas and maybe even maturity. This can be particularly helpful for tween/teen artists like Bieber, who eventually need to shift their identities and their audiences as they age out of the teen space. Even a teenager like Bieber looks more mature when he’s presented as a mentor to younger talent.

For example, Usher’s mentoring of Bieber gave Bieber hip-hop credibility, while simultaneously burnishing Usher’s reputation as a good guy. In turn, Bieber’s public championing of newcomer Carly Rae Jepsen brought her to the attention of his teen audience, which made her a hit.

Social Keiretsu

The idea that each individual artists has an ownership stake in the career of the other artists sets up a protective financial structure and a supportive social structure. The interlocking ownership motivates them to help out the other artists, and the interlocking social element builds a strong reputation across the entire group.  I call this kind of Boost structure Social Keiretsu.

Transparency

Braun’s cross-connecting, interindependent approach is supported by “an overall ethos of transparency” (p 52) in the business arrangements. Braun’s deals and revenue streams are specific, straightforward, and clear. This transparency lets people know just how he is capturing value for himself and how much value he is capturing relative to other participants. And, it shows what value is being generated for others.

This transparency makes it easier for Braun’s artists to know what they are getting from their work with him, and how he benefits from their efforts to contribute to other artists. They can see the cause & effect relationships that are at work. And, they can trust that they are getting value and giving value throughout the network.

Creating & Releasing Shared Value

The Braun-Bieber network also contributes to the community outside their own business arrangements, largely through charity.  For example, a portion of the proceeds from sales of Bieber’s perfume Someday was was designated for a group of charities.

As Bieber explained in an email to The ChrisianPost:

“I’m excited and humbled at the news about Someday,” said Bieber. “It means a lot to me that my fans are there to support. And the best part for me is that my favorite charities are going to share in the success. It is important to pay it forward.”

Although charity is a bit of an ‘old economy’ way of contributing to the community, the artists’ philanthropy is directly linked to each business deal. This direct link makes it more ‘boosty’.

Linking Fans with a Win-Win-Win

The direct link between a product’s sales and a charity contribution boosts people outside the deals in two ways.

First, the direct link creates value that is not ‘captured’ by the business but is instead directly released to the charity community. (I like to think of this alternative to ‘captured value’ as free-range value.)

Second, the direct link lets the larger community of Bieber fans participate directly in the creation of value.  The fans help to create not only the value that is captured by Bieber as income, but also the value that is released as a donation to charity. And fans get quite involved — they organize “buyouts” of specific products explicitly to drive charitable contributions.

Record and product sales become a win-win-win – good for Braun/Bieber, good for the audience, and good for the charity.

Boost Networks as an Innovation

Widdicombe’s story emphasizes Scooter Braun’s creativity in creating “revenue streams that record labels wouldn’t think of”. She offers one example after another of how Braun’s cleverly interlocked economic arrangements boost the financial value that is created and captured by Braun and his artists.

But there are some exciting developments here, too, in the philosophy and business attitude that wraps around these financial arrangements:

The Braun-Bieber network is developing new models of Boost business, where artists and managers build their businesses through interindependence, transparency, and a win-win-win orientation.

 

 

See also:

Teen Titan: The man who made Justin Bieber , by Lizzie Widdicombe, The New Yorker, Sept 2, 2012.

Investigating The Boost Economy
Are Your Social Business Systems Designed for Extraction or Contribution?

The Unstoppable Rampage of the Beliebers, Gawker

 

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