Madonna And Her Billions: The Pop Star’s Moneymaking Business Plan
After a successful 2012, Madonna has progressed from being just your average millionaire to the first female billionaire of pop music. But the addition of the Material Girl into the billionaire (mostly) boys club is more than just a culmination of one good year. It’s the result of a cleverly strategized career that has spanned three decades, 12 albums and more than a handful of business ventures that allowed Madonna to take her career — and more importantly, her money — into her own hands.
Calling 2012 a good year for Madonna is clearly an understatement. The singer was the top-earning pop star thanks to her record-breaking MDNA world tour, which made over $300 million dollars in ticket sales, according to Pollstar. Not to mention, as the The New York Post reported, she made $75 million in merch sales over the course of the 88 shows and pulled in another $10 million in TV rights and DVD sales.
Madonna doesn’t just rely on her music to bring in money, though. Last year she raked in an estimated $10 million for her Material Girl clothing line and shoe line. She also earned $60 million from sales of her debut perfume, Truth or Dare, exclusive to Macy’s, a store that your average Madonna fan can afford to shop at.
The icon also makes good business choices. She teamed up with Smirnoff Vodka and made $10 million dollars. And even though no exact numbers have been released, it’s been reported that her investments in Vita Coco coconut water and gym chain Hard Candy have earned her a good chunk of change.
Throughout her career, Madonna has also taken chances to ensure she made a pretty penny off of her music, even when the industry was dying a slow death. In 2007, she signed a $120 million agreement with concert promoters Live Nation that would allow her to receive cash and stock in exchange for allowing them distribute three studio albums, promote her concerts, sell merchandise and license her name. Jay-Z struck up a similar deal with the company in 2008, which relies on a new business model that takes the focus away from making money on music sales alone.
“Normally, the record company has a lot of leverage,” entertainment attorney Dina LaPolt told Forbes. “But in the case of the 360-degree deals with Live Nation and Jay-Z and Madonna and all them, those artists had significant amounts of leverage and significant bargaining power because they were so successful … they were able to extract millions and millions of dollars.”
But when Madonna’s 2008 album Hard Candy didn’t sell as well as she hoped, she signed a three-album deal with Interscope for $1 million per album starting with 2012’s MDNA. She was then being paid by both Interscope and Live Nation to make music. Not a bad deal.
Madonna rose to fame in the ’80s and topped the charts for most of the ’90s, but her ability to change with the times is the reason she can still fill stadiums in the new millennium. She’s become a brand of her own, becoming a multi-hyphenate artist who proves female pop stars don’t have an expiration date. It’s not a surprise that Madonna would still be marching along to the beat of her own drum, but it is surprising how much money she still makes doing it.
Sure, Paul McCartney became the first billionaire pop star in 2008, but he’s been writing hits for 50 years. Madonna had to pave her own way, there were no other female stars of her stature. She is now the business model for younger artists like Beyoncé and Lady Gaga, who are building mini-empires and becoming ambassadors and creative directors of brands like Pepsi and Polaroid. Even Taylor Swift and Justin Timberlake, who each have broken records with their album sales, have relied more on clever business tie-ins to sell music than the music itself.
But Madonna being Madonna, is showing no signs of slowing down. She told WWD last year that she plans to release another fragrance this year, along with her own lingerie line under the Truth or Dare name, not to mention that she still has two more albums left in her contract with Interscope. Now 54, she’ll be earning well past the standard retirement age.