The Business Strategy Behind One Direction's 'Midnight Memories' Roll-Out (From the Magazine)

One Direction

Diana Levine

In this excerpt from our most recent issue's cover story on One Direction, Billboard's Andrew Hampp examines the many moving parts of the group's business strategy with manager Richard Griffiths, Simon Cowell and more. To read the article in full, subscribe to Billboard or buy a copy of the most recent issue right here.

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"Midnight Memories" is the next phase in a whirlwind two-year period for One Direction, during which the group has sold more than 35 million records worldwide, many of them in the United States, the biggest market for the U.K. group. Debut album "Up All Night" has moved 1.9 million copies since its stateside release in March 2012, while last November’s "Take Me Home" has nearly matched it with 1.8 million, according to Nielsen SoundScan. Both albums debuted at No. 1 on the Billboard 200, making One Direction the first British band to enter the top of the chart with its first two albums since the Beatles. The act has also sold 15.6 million singles in the States, led by debut hit “What Makes You Beautiful” (4.4 million copies), as well as “One Thing” (1.5 million), “Live While We’re Young” (1.2 million) and Midnight Memories’ lead single “Best Song Ever” (1 million).

On the touring front, One Direction has grossed $78.3 million from 81 of the 134 shows the band has reported to Billboard Boxscore thus far, with an attendance of 1.2 million to the group’s first global arena tour. The act took home the Breakthrough Award at Billboard’s Touring Awards this month, and is set to embark on an even bigger tour of stadiums in 2014 that starts April 26 in Colombia. Plus, the group’s concert documentary, “This Is Us,” took in a worldwide gross of $68 million, according to Box Office Mojo.

No wonder Sony Music U.K. CEO Nick Gatfield said in a 2012 interview, “What you might not know about One Direction is that they already represent a $50 million business -- and that’s a figure we expect to double next year.” Of course, $100 million isn’t a figure a label arrives at based on recorded-music sales alone. But senior executives of One Direction’s team confirm Gatfield’s quote, and indicate that Sony has participation in everything from touring revenue, merchandise and the documentary, which was released by Sony Pictures.

“I hate the word ‘synergies,’” says Simon Cowell, founder of One Direction’s label Syco Entertainment, who helped assemble the group on the U.K. version of “The X Factor” in 2010. “But there’s a lot of ways we’ve worked together between myself and Sony and ‘The X Factor’ -- obviously their touring and merch generate a lot of money. I don’t like thinking of them as a brand, to be honest. They’re just five guys doing incredibly well, and if the money comes in, even better.”

“It would be an exaggeration to say it’s a 360 deal,” Griffiths adds. “But it’s no secret in today’s world that the labels are involved in ancillary income as well as recorded income. So I suspect we’re a very important act for [Sony] in many senses, and we make sure that we get suitably compensated by them.”

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