Lots of folks have a hate on for Canada’s biggest band but once you know more about the business sense of the band can you begin to respect them for what they’ve created. It’s quite amazing to think that this pop grunge band from the middle of Canada has become one of the biggest bands ever, like ever ever, in the world. People love this band because Chad Kroeger is no dummy, in fact he appears to be one of the gurus of the new music business.Anyway below are some choice excerpts from Business Week‘s brilliant article on Nickelback:
Since their first breakout single, How You Remind Me, in 2001, Nickelback has released five albums with at least 19 Billboard Hot 100 singles, selling more than 50 million records worldwide.
In addition to masterminding Nickelback’s ascent, Kroeger, 37, has found ways for his band to make money onstage and off, through licensing, merchandising, and product-placement agreements.
As of May 2011, the rock-star-cum-business-mogul was earning $9.7 million a year from his various ventures, according to court records filed with the Supreme Court of British Columbia. He has a vacation home with friends in Cabo San Lucas, Mexico, a 20-acre farm with stables in British Columbia, and his own home recording studio. Chad Kroeger is not just a drunken rock god: He’s a kingmaker.
– Philosophy + Formula –
Kroeger attributes his rise to simple hard work. “I always thought it was strange when these artists like Kurt Cobain or whoever would get really famous and say, ‘I don’t understand why this is happening to me. I don’t understand! Oh, the fame, the fame, the fame!’ ” he says. Nearby, there is a table covered with band photos that they have already signed. Kroeger looks around the room for a moment and then says, “There is a mathematical formula to why you got famous. It isn’t some magical thing that just started happening. And it’s going to move exponentially throughout your career as you grow, or can decline exponentially if you start to fail as an artist.”
The formula for fame includes inviting radio station personnel to hang out backstage to make sure he gets airplay before and after events. And there is always a preshow photo op with radio contest and fan club ticket winners.
Kroeger tends to the band’s image in even the smallest moments. When asked to take pictures with fans, Kroeger will don aviators and strike the same pose nearly every time: one arm around the subject…
Kroeger’s manufactured approach to music and stardom may be one reason Nickelback is so widely disliked. “Right now it’s become trendy to hate Nickelback, and no one even knows why,” tour manager Kevin Zaruk says…
– Early Year Lessons –
…By the late ’90s …they decided to represent themselves and began to put together the Nickelback machine. They figured out how to press CDs, get radio airplay, and book gigs. They bought a Ford Econoline and started touring. “We had zero business plan or experience, but it’s amazing what desperation will do for you,” Peake says. The venture was funded primarily by Peake, who took out $30,000 on a credit line established at a local bank branch in Hanna. It was the same place his father, a farmer, used to finance cattle purchases.
Getting famous in Canada is different from getting famous in the U.S. For one thing, the country mandates all commercial stations to devote 35 percent of their programming to Canadian acts.
…From the start, Kroeger and the band recognized that the structure of any record deal alone wouldn’t make them rich. “We didn’t really like our record deal when we signed it,” adds Mike Kroeger at one point backstage.
…Smart decisions have built Nickelback into a production conglomerate, with concerns that stretch across industries and genres. One of Nickelback’s two openers in Noblesville, for example, is the band My Darkest Days. Kroeger owns royalty rights to their songs because he helped write some of them and produced their current album on his own music label.
Kroeger writes far more songs than Nickelback can release. Since 2001 he’s penned more than 150 songs for both his band and major artists in completely different categories, including classic rock (Why Don’t You & I for Carlos Santana), country (It’s a Business Doing Pleasure With You for Tim McGraw), and hip-hop (Tomorrow in a Bottle for Timbaland).
“I’ve always called him a song scientist. He’s got it down, and I respect that,” says Chris Daughtry,…“People want to hear songs they can remember after just one listen. That’s what I love about Chad’s songwriting.”
Kroeger doesn’t always accompany the artists, but he still gets paid. Every time a song gets carried over the airwaves—on the radio or the Web—the songwriter gets performance royalties. According to Songtrust, a royalty management company, a top five pop hit typically grosses about $2.5 million for the songwriter and publisher; that doubles if the song becomes popular worldwide. For a hit songwriter, the payout is substantial. Kroeger, however, says none of his work is about making money. “When you are writing a song for something else, if you are doing something for money, I always think that’s bad luck.”
Whether for love or money, he also runs a record label. Kroeger co-founded 604 Records …Simkin says Kroeger has succeeded with 604 Records for two reasons. “He has balls,” he says. In other words, Kroeger’s willing to gamble on new talent. He’s also, says Simkin, a workaholic. “That’s his idea of vacation, non-Nickelback work.”
…breakout hit, Porn Star Dancing, used cross-channel marketing tactics: Both Kroeger and rapper Ludacris sang on the single, giving it exposure to the alt-rock, mainstream, and hip-hop categories. Lest fans of ancient heavy metal feel left out, Zakk Wylde, a legendary member of Ozzy Osbourne’s band, also added a guitar solo.
In 2008, Nickelback signed an exclusive “360 deal” with promoter and ticket sales company Live Nation (LYV). The company reportedly paid an estimated $50 million to $70 million for a stake in all revenue streams except publishing
…Kroeger tours on the cheap. Rather than use expensive special effects or stage tricks, a Nickelback show consists largely of the band playing in front of a big screen … flamethrowers and concussion mortars…
For superstars, all that’s minimal…Live Nation President and Chief Executive Officer Michael Rapino. “The No. 1 thing that the band is worried about is what is the ticket price going to be this summer and how do I make sure I have a fairly affordable show.”
….UEG confirms that one Merch stand alone can take in about $100,000 for the night. That could add up to as much as $200,000 per venue or an additional $16 million over the course of the tour.
…In response to the protest of their planned concert in Detroit, they launched their own Funny or Die comedy sketch. It included several tongue-in-cheek moments such as Kroeger dressing up as RoboCop to win back that city’s fans. The spoof not only defused the situation, it seems to have won people over.
“They have realized they are polarizing; usually polarizing equals success. They are not going to change what they do,” manager Bryan Coleman says about the group. Kroeger just wants people to know that he doesn’t take himself that seriously either… (via Business Insider)