Saturday, 23 May 2009

Panorama, September 1977: The supersmart money machine

An article from Dutch magazine Panorama, portraying ABBA as a calculating money factory and also focussing on the important part that Stig Anderson played in achieving ABBA’s breakthrough.
Where can one become a millionaire very fast these days? That’s right, in the world of pop music. However, talent alone doesn’t count for anything, what’s needed is a vision. Just listen in which way ABBA is making millions.

They’ve worked very hard to get there. For years, they’ve worked hours that made a mockery of every agreement that has ever been made on normal working hours. They’ve toiled, moiled, sighed, contemplated and calculated. But they’ve made it. It looks like Stig, Björn, Benny, Agnetha and Anni-Frid will now be snowed under with millions.
At a very high pace, the post-industrial phenomenon ABBA is on its way to become one of the most profitable companies in the world. In the few years of stardom, the profit has increased by leaps that even a captain of industry can’t even dream of. And this is only the beginning.
Even when the four musicians and their manager would decide today to throw in the towel, the large sums of money will keep pouring in the coming years. It’s the result of the extremely refined way in which the ABBA-concern has been built and the opportunity that occurred a few years ago has been utilized.
The mastermind behind ABBA is Stig Anderson, lyric writer, manager and above all marketing strategist. He’s exploiting ABBA to the fullest. Absolutely nothing is left to chance. ABBA is a well thought out, meticulously oiled, solid money machine.

Let’s add everything up. The musical breakthrough came in 1974, when about five hundred million television viewers saw the Swedish team win the Eurovision Song Contest. The winning tune ‘Waterloo’ was selling like hot cakes. The turnover of the ABBA-concern jumps from 3 to 5 million Dutch guilders that year. Given that the expenses as a result of this success aren’t insignificant either, the profit doesn’t exceed a sum of one hundred thousand Dutch guilders. The balance sheet of 1974/75 is already showing totally different figures. Thanks to the first long-player the turnover increases to 11 million Dutch guilders and the profit without tax deduction accumulates to more than 2,5 million Dutch guilders. The Swedish tax collectors office, that receives over 1 million, is already rubbing its hands, but one year later it’s already collecting more than 2,5 million of the 6 million profit.
The flooding has started because, although last year’s profit-and-loss (haha) account hasn’t been compiled yet, we can safely assume that ABBA has made a profit of 15 to 20 million Dutch guilders. In any case, the turnover has increased to more than 30 million. And the expectations for this current year are even far higher.

Up till now, ABBA has continuously succeeded in producing rapidly selling pop music. The latest album ‘Arrival’ has achieved sales of seven hundred thousand copies in Sweden alone, that means every eleventh Swede owns an ABBA-record. In Holland, about one million of the group’s records have been sold and on a world scale that figure is fifty million; thirty million singles and twenty million albums. And even before the winter there’s a new long-player due to be released.
No other enterprise has seen such a spectacular increase in these times of stagnating economic development. Including the five owners – the musicians and the manager – the ABBA-concern is employing only twenty people. Per head, a profit of more than 1 million Dutch guilders is made momentarily. For the near future, Stig Anderson already has a marketing tool prepared that will crank up the income even more. Apart from the new album, a special ABBA-movie will be out in the cinemas before the end of the year, produced under direct management. In preparation is a tour of the United States and Japan, the only market that the Swedes haven’t conquered yet. On top of that, Anderson thinks he can now start exploiting ABBA’s popularity in the Eastern countries. To get the money earned in that territory to Sweden, together with another company he has founded a corporation, that’s going to specialize in the trade market. The forte of Stig Anderson is that he is able to think ahead. That’s why, after the musical breakthrough at the Eurovision Song Contest, ABBA didn’t choose to go for the fast, but mostly short-lived success of rapidly released records, if necessary with borrowed music. By his directions, the group concentrated on the much more lucrative albums market, meanwhile incessantly improving the characteristic, feather light own sound. The sound of money.

A perfect example of Anderson’s way of marketing strategy is the approach of the United States. The group has been there a couple of times. Not to go on tiring tours that don’t make any money, but to perform in television shows that are broadcast coast to coast. The tours will come at a later stage, when the beginning record sales need to be supported. ABBA did such a supporting tour, time consuming and money costing, in Australia. The result being that one in every three Australian households now owns an ABBA-album.
Indeed, the upcoming ABBA-movie is a product that needs to support and enhance the record sales as well. It’s so much to the good when the movie itself will make a profit as well, due to the enormous publicity. For the time being, about 3 million Dutch guilders has been invested.
Meanwhile, it’s a problem for ABBA to find the right investment for all their earnings. Although there are a lot of taxes to be paid, due to few possibilities of deduction, their multi-million bank account is growing by the day. Up till now the ABBA-group, that’s actually comprised of five different companies, has invested some money in an art gallery and a wholesale business in sports articles. There is also an own recording studio under construction, but apart from that they are looking for possibilities to broaden their horizon. After all, no one can predict how long the international popularity will continue.

For the time being, it doesn’t look like ABBA will be removed from the premier league of the international pop scene. One of the reasons why the Swedes have lasted for so long is undoubtedly the fact that they manage to make pop music that’s digestible for both the young and the old. This seldom happens. Just like it doesn’t happen very often that a non-Anglo-Saxon pop group or artist succeeds in conquering the monolingual (English) world of pop music.
Again: that’s Stig Anderson’s biggest merit. Even before the Eurovision Song Contest in London he understood that success could only be within reach with the right marketing. That’s why he had everything prepared for the victory, even before the Contest. Immediately after the victory of ‘Waterloo’, handouts describing ABBA’s biography in many languages could be distributed. Instantly, ready-made English versions of ABBA’s music could be produced. Obviously, the monolingual world market is not the only explanation for their speedy breakthrough. The insane free publicity that exists in the area of pop music gave a considerable push as well. Just think about it: all around the world, even non-commercial radio stations like Hilversum III are playing pop tunes all day long, that are abundantly praised to unprecedented heights by crazy DJ’s. Furthermore there are tons of magazines that can’t stop writing about pop idols.

In short: success is not a matter of talent anymore, but a matter of exploiting talent. ABBA does it like no other. To the smallest detail. Unlike other groups for instance, ABBA doesn’t get any income out of live performances. The group, as a typical exponent of modern pop culture, meets its fans through electro technology. The consumers are getting a ready-made package of preserved studio sound and studio images. That’s how it’s meant to be these days.
“Pop music is not a matter of a guitar and a bottle of wine anymore,” according to Stig Anderson.


Henriette said...

THANK YOU, Michel!

George said...

Well, now after 30 years, it is abundantly clear that Abba were NOT a marketing phenomenon.
It's their MUSIC that made and keeps them so special.
After 1982, Abba marketing machine was gone forever and yet they're still as beloved as ever.