There was a time not too long ago where a strategy for a musician was set in stone; record an album, hope it sells well with the public, and then tour the project to every far flung place on the globe to cash in. But Diddy reminds us that the rules in a contemporary context are much different – after rising to the top of the highest-paid musician list in 2017 (making a whopping $130 million USD) – without even releasing an album.
While Diddy is no doubt a renaissance man, a look into his various ventures reveals that his success is a mixture of what some might deem dated commodities – that in fact have long-lasting impacts in fashion – as well as a lucrative success in the world of alcohol and water sales.
Here’s how Diddy managed to pull in $130 million USD without releasing an album – outpacing second place challenger, Beyoncé, by a cool $25 million USD.
For many, the mention of Sean John evokes thoughts of electric blue, terrycloth jumpsuits that people often paired with a sweatband during the brand’s most popular days in the early 2000’s. And although the interest has dwindled for fashion enthusiasts in the 18 years since Combs founded the brand, the numbers are still quite staggering; $450 million USD of sales annually – buoyed by a sportswear division that accounted for 50 percent of all sales.
Much of Sean John’s success – outside of Combs’ own co-sign at the height of his active music career when he was pumping out Billboard hits – stems from an exclusive partnership he secured with Macy’s back in 2012 which the brand and retailer have maintained ever since. This gave Combs the ability to tap into Macy’s share of the $24 billion USD annual menswear department store market.
When Combs decided to relinquish a majority stake in Sean John last year to CAA-GBG Global Brand Management, he was rewarded handsomely to the tune of an estimated $70 million USD (which still gave him a 20 percent stake in the business).
Combs Wine & Spirits
A decade ago, a then 37-year-old Diddy aligned with Ciroc Vodka – one of Diageo PLC’s superpremium lines – for a 50-50 share in the profits.
The brand itself had entered the North American market in 2003 and had intended to infiltrate the “urban” market using former NFL player, Earl Little, as its most prominent spokesman.
With Diddy leading the charge, the brand went from 40,000 cases sold annually in 2009, to more than 2 million.
In speaking about the success, Diddy remarked, “I came from the hip-hop community. I think people try to simply put it in a box like that. But that’s not what happened. I don’t care if you are into rock ‘n’ roll or dance music or are the biggest act in the world. A regular celebrity cannot get you to that – to what we’ve done. A person with a great idea or a team with a great idea gets you to 2 million cases.”
From 2007 to 2010, Ciroc sales increased 552 percent – replacing Belvedere as the second-ranked vodka in the “ultra-premium” category.
While much of Combs’ marketing influence stemmed from his own usage of the product, he and Ciroc’s team was also wise to align with key brands in 2017 like Palace.
In 2017, the Distilled Spirits Council reported that volume for vodka – which represents about one out of every three spirits sold – was up 2.4%. Thus, Diddy’s 50 percent revenue split with Ciroc was clearly a valuable commodity in 2017.
Bad Boy Family Reunion Tour
Although the tour took place in 2016, many financial experts point to Diddy’s Bad Boy Family Reunion Tour as having a positive impact on his placement on the Forbes list.
The 26-city North American music experience – combining older artists like Mase and 112 with more contemporary artists like French Montana – regularly took in a gait of more than $1 million USD a night. But with the sheer amount of leg work and artists necessary to pull it off, Diddy went on record to claim that, “this is not about the money.”
Before actor Mark Wahlberg recruited Diddy and billionaire, Ron Burkle, to invest in a brand he had discovered while getting into shape for his role in The Fighter, Aquahydrate was a fledgling alkaline water company which lacked any real visibility in the world of training.
That soon changed; the company enjoyed triple-digit annual growth between 2012-2015 and at the time was the fastest growing water in the U.S. according to AC Nielsen.
As an owner of a double-digit percentage in Aquahydrate, Diddy has positioned himself well in a market where the United States continues to be the biggest consumer for bottled water worldwide (where top tier brands like Dasani and Aquafina make over a billion dollars each annually).
Even though “premium” water only has a 2.3 percent share of the $14 billion USD bottled water market, Aquahydrate sales have grown by 37 percent.
If Diddy can grow Aquahydrate like he did Ciroc, there’s a chance that he could make 50 Cent’s $100 million USD Vitamin Water deal seem like small potatoes.
To read the entire ‘Forbes’ list of highest-paid musicians of 2017, head here.
- Featured/Main Image:Scott Gries/Getty Images