Entertainment lawyer Ken Hertz -- who's driven brand deals for Beyonce, Gwen Stefani and Lady Gaga -- thinks everyone is a media company.
Ken Hertz has a new theory he wants to test out.
It's an overcast October day in New York, and Hertz has settled into a table at SoHo House in Manhattan's Meatpacking District, blocks away from where his client David Blaine has been electrocuting himself for the last 72 hours. The Blaine stunt -- powered by Intel Ultrabooks -- features musicians like Andrew W.K. and Pharrell Williams swinging by to play a keyboard wired up to send melodic shocks of 1 million volts through Blaine's body. Dozens of media outlets will cover the event throughout its duration.
"Everyone is a media company," Hertz, 53, says. "No matter what you do, you're selling goods or services and you have a customer that you need to communicate with -- and it's either through earned media or social media or owned media or paid media. David was able to speak to the message of the sponsorship with Intel like it was a partnership, which it is, and it's extraordinary how much earned media they're getting. Intel was trying to create relevance through a publicity stunt by going to someone who does nothing but publicity stunts. He said, 'You don't have to turn it into an ad, you'll get plenty of publicity.' Intel was looking for relevance and David delivers relevance."
Hertz has specialized in delivering relevance in many different forms for years, whether it's from his day job as a managing partner at entertainment law firm Hertz & Lichtenstein or in his dual role as owner of Membrain, a strategic branding firm that has helped major companies like Hasbro, McDonald's, MillerCoors, Burger King, Hallmark and Saban Brands develop music strategies, while helping Hertz & Lichtenstein clients like Will.i.am, Beyonce, Gwen Stefani, Will Smith and others expand their own businesses and branding ventures.
"Ken is somebody who has a very diversified skill set-that's unusual for an attorney," says Troy Carter, Lady Gaga's manager and founder/chairman/CEO of Atom Factory Group, who has done several branding deals with Hertz through the years. "His knowledge of everything from the technology space to the beauty space to consumer goods has not only been an asset for him but for his clients as well. Ken seems to have relationships that run through all different areas, and having somebody on the team with that flexibility is great."
That Hertz has become a de facto brand agent for many of his clients rather than the typical vision of a Hollywood lawyer is an irony not lost on him. "I deal with talent agencies and ad agencies all the time who say, 'It would be great to have you as a reality check,' and I'll say, 'That's not really lawyering.'" Hertz originally wanted to be a photographer, but instead studied marketing and eventually got his start as a music lawyer for Disney in the late '80s. "I always wanted to be a marketer on some level," Hertz says. Stints at MP3.com and Napster as they went from boom to bust taught him an invaluable lesson: "You can no longer control the distribution channel. Therefore your brand value is what buys you defendable real estate and allows you to have more leverage in the marketplace."
Leverage played a major role in one of Hertz's most recent branding deals, the launch of Lady Gaga's Fame perfume in partnership with Coty the week of Sept. 13. The hugely successful scent had 6 million bottles shipped to stores, becoming the second-fastest-selling fragrance of all time behind Coco Chanel, according to a tweet from Gaga herself that has since been verified by her manager Carter and industry analysts. The result of more than two years of conversations among Hertz, Gaga, Carter and Coty Beauty senior VP of global marketing Steve Mormoris, Fame was an out-of-the-gate success that almost never happened.
"She was remarkably engaged in the meeting, but what we learned was that she had been approached several times about a fragrance and she had turned them all down," Hertz recalls of the initial meeting that took place in Paris in the spring of 2010. "Steve [Mormoris] had a tough time getting the company to go along with his instincts, which was to trust her. He had to get on a plane at one point and fly to Asia because the whole thing was melting down, because she was unhappy with the bottle."
Ultimately, what saved Fame was the philosophy that Hertz tries to bring to all his clients' deals: let their creativity influence the product. Gaga was engaged in the design of Fame's bottle (the same egg she emerged from at the 2011 Grammy Awards), and she challenged Coty to develop a proprietary technology that made the fragrance appear black but spray invisibly. That engagement is a big part of what drove sales of millions of bottles of a premium product (3.4 ounces for $79), which will ultimately net her a reported $15 million during the next three to five years.
"She's going to make lots of money off it but that's not how she approached it," Hertz says. "She talked about wanting to really market this product and make it an event." To wit, Gaga herself footed the extra costs when the Steven Klein-directed commercial for Fame went over budget, and helped conceive the surreal launch event at New York's Guggenheim Museum, where she shaved her head and got a tattoo in front of an audience.
It's that sense of empowerment that Hertz has applied to a pair of major deals with Will.i.am, who at this year's Consumer Electronics Show debuted his first suite of products as a creative director at Intel, then later unveiled a new sustainability initiative with Coca-Cola, called Eko-cycle, where he will be the face and creative force behind a range of products made from recyclable materials from partners like Levi's, New Era and Beats by Dre.
Hertz also paired Britney Spears with Hasbro's Twister for an interactive videogame dubbed Twister Dance, where the pop star leads dancers through a routine set to a custom remix of her hit "Till the World Ends." It's already become a fast seller for Hasbro, and Hertz and his team are currently building a music strategy for other Hasbro franchises, including boy-targeted products like Super Soaker, Nerf and Vortex. Hasbro chief marketing officer John Frascotti credits Hertz as "a great collaborator" with little agenda.
"I don't get the sense Ken is ever trying to sell us anything or promote a particular point of view," Frascotti says. "He takes the time to learn our business and what our objectives are. We really view him as a business partner more than an agency or someone on the outside."
Membrain, Hertz's branding arm, has taken a similar approach to licensed properties like Saban's Emily the Strange, a fictional character that has interviewed celebs like Marilyn Manson, Gerard Way and Karen O for her graphic novels and is prepping an actual album for release in the near future.
"We're not just looking for somebody out for a quick deal. There's a real responsibility to come out with a merchandise program and work with someone that actually knows the value of that person's brand in a relevant way," Membrain Licensing president Jennifer Sullivan says. "It's like taking your favorite garage band and bringing them to a broader audience -- if you do it right, you can keep them the way you've always loved them."
Not all of Hertz and Membrain's music branding work is focused on celebrity, however. An ongoing initiative called the Voice of McDonald's is a global internal program where the fast-food giant invites employees from around the world to compete for the chance to win cash prizes, voice-over work in feature films and prize packages that include all-expenses-paid trips to marquee concerts like Lady Gaga and the "American Idol" finale.
"One of the great things about Ken is he's not only very well-versed in the music industry and our brand, but he's a lawyer so he understands risk and he understands opportunity," McDonald's senior VP of global marketing Dean Barrett says. "He's been very good in driving our direction and knowledge as we go along."
It all goes back to Hertz's other theory -- that no one has ever made money selling music alone. "You made money selling plastic discs as a great way to get music, or selling record players or selling iPods, and selling advertising on radio stations. All the people who make the most money off music -- MTV, Clear Channel, Ticketmaster -- none of them actually makes music," Hertz says. "The way our clients make money is by figuring out other ways to monetize their crowd. Music is a great way to sell other things."