An economy grows around Britney Spears

Every time she sinks to new lows, cash flows.

February 4, 2008 13:19
An economy grows around Britney Spears

Britney Spears 88 300. (photo credit: )


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In the days after the Britney Spears soap opera rode a police-escorted gurney to its apex, celeb-mag sales spiked, traffic jammed gossip Web sites, tabloid TV ratings rose and paparazzi photo prices surged. For a growing number of people and businesses, Spears's saga is about money: Every time she sinks to new lows, cash flows. And these days, no one is above the fray. When a custody dispute devolved into a three-hour standoff at Spears's home January 3, police officers and firefighters were pressed into duty. Television stations sent up helicopters, and cable news anchors reported the unfolding drama in real time. The Associated Press had two reporters working the story, with editors on both coasts updating it seven times throughout the night. Spears is just one of many stars driving the growing multibillion dollar celebrity news industry. But the Spears story in particular, with a new twist nearly every week, has become a very profitable sub-sector unto itself. "Britney is the most bankable celebrity out there right now, and she has been for the past year," said Francois Navarre, founder of the paparazzi agency X17. Spears became a can't-miss tabloid topic after filing for divorce from second husband Kevin Federline in November 2006. Since then, she's been in and out of rehab, shaved her head, revealed a bit too much above the hemline, was arrested after a traffic accident, and lost custody of her kids (and later her visitation rights). "The product for the tabloid industry is the unusual, and Britney has been delivering that consistently," said Dan Smith, dean of the Kelley School of Business at Indiana University. AT A time when advertising spending in traditional media is declining, celebrity gossip titles such as Star, Us Weekly and In Touch Weekly are growing. That helped overall newsstand sales for magazines edge one percent higher, to $2.39 billion, in the first half of 2007. "The increase is almost entirely attributable to the growth of the celebrity magazine," said John Harrington, who runs industry consulting agency Harrington Associates. Any time a magazine can boost newsstand sales past its average, the revenue is booked nearly entirely as profit, Harrington said. "People prints 2.5 million copies and sells about an average of 1.5 million. If they have an issue that sells 2 million, the extra half million goes to the bottom line." People, which takes a broader and less sensational look at the entertainment industry, dominates the sector in circulation, but that hasn't stopped such new titles as In Touch and Life & Style Weekly from elbowing in. Another newcomer, the US version of Britain's OK!, has taken particular interest in Spears, putting her picture on the cover 54 times in the 103 issues since January 2006. "An editor's dream is to have a real life soap opera unraveling in front of you, and Britney provides that every week," said Sarah Ivens, OK!'s US editor. The magazine has a 10-person team in Los Angeles devoted to Spears coverage. "We're on constant Britney alert." She wouldn't disclose the costs to the magazine, saying only that Spears has been "amazing" for OK!'s business. Publisher Tom Morrisy said Spears drives newsstand sales and helped the magazine's ad revenue more than double to $51 million in 2007. OK! expects to turn a profit in 2008, three years after breaking into the market. US Weekly has been just as enamored of the star, putting Spears on nearly two-thirds of its covers last year, including 14 in a row. People has had Spears on the cover 10 times in the past 15 months. AND THAT heightened demand for Spears pictures has been a boon to photographers. X17's Navarre said an exclusive shot of the star would sell for about $10,000 in the US and generate thousands more in residuals. "She's the most expensive right now," he said. "For Angelina, for example, you divide by two or even three to get the price." In contrast, the average celebrity shot fetches $125 to $700, according to Scott McKiernan, founder of ZUMA Press photo agency. He said residual fees on exclusives can push the value of a unique Spears shot well past $100,000. Many of those images wind up on celebrity gossip Web sites, like TMZ and PerezHilton. The sites make money by delivering viewers to ads on their pages, typically receiving a fee for each 1,000 hits. Navarre said Spears boosts traffic to his Web site,, more than any other star. "During the ambulance incident, traffic doubled every hour," he said, citing internal server data. X17, which owns the infamous picture of a bald Spears taken in February, has a team of photographers tracking her at all times. "For us, she's the star No. 1," Navarre said. Television ratings show that a major Spears incident attracts viewers to each of the main entertainment news TV shows, too. "All of us sustained a major ratings spike" when Spears was taken to the hospital [a few] weeks ago, said Charles Lachman, executive producer of Inside Edition. "It happens every time with her." It's more difficult to assess the economic gain for TV shows because they sell ads weeks in advance, with rates based on average expected ratings. If the show fails to deliver, it has to reimburse the advertiser, but there is no such compensation if ratings exceed expectations. Suffice it to say that advertisers love the extra attention. "Anything that boosts ratings is a win-win for everyone," said Shari Anne Brill, an analyst with ad buyer Carat USA. ON THE flip side, the Spears story isn't making money for everyone. There are costs involved, too. For instance, the increased scrutiny puts a burden on Los Angeles civil service units, which have to keep Spears safe and public spaces uncluttered. The LA Police Department wouldn't estimate the extra costs Spears generates. Her ambulance incident was handled by officers already on duty. The fire department said it was considering charging Spears for the ambulance ride, but did not disclose how much. Spears's numerous court appearances - for custody hearings, divorce proceedings and a civil case - have more measurable effects. Richard Barrantes, chief of court services division of the LA County Sheriff's Department, said when Spears and Federline were in court on October 26, his office billed the court $2286.10 to cover the cost of extra security at the courthouse. The star's behavior may be eroding her own brand, as well. Spears remains among the most-recognized celebrities, along with Johnny Depp and Will Smith, according to Marketing Evaluations, the company that developed the "Q Score." But she is not well-liked. Her negative Q Score is at 66 - only Federline has a lower one among all celebrities - meaning two-thirds of people who know who she is give her a "fair" or "poor" rating. The average for female performers is 30. Spears, who used to pitch for Pepsi but no longer fronts for any mainstream products, gets most of her income from music sales, augmented by several perfume lines and other side projects. Elizabeth Arden, Spears's partner in the perfume business, introduced a third Spears scent, "Believe," last fall. So far, Spears's antics don't appear to have hurt personal earnings, which, according to court papers released in November, are roughly $737,000 per month. "A good actor or musician can get away with some pretty bizarre stuff offstage as long as they keep delivering the goods in their focal profession," Smith said. Spears seems to have done that, winning critical acclaim for Blackout, her first studio album in four years. The record hit No. 1 on the charts last fall, although it faded quickly. Its headline single, "Gimme More," topped out at No. 3 on the Billboard 100. Now that she's back in focus for offstage drama, her music is an afterthought. And at some point, most industry experts agree, the public will grow tired of the Spears story. That doesn't mean the economy that sprouted around her will wilt. "If it's not Britney, then it'll be Lindsay or Paris or some other person we haven't heard of yet," Smith said.

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