The Business of Rock

He may be an international rock star, but Kid Rock can’t afford to rest on his laurels — not with record sales plummeting, ever greater competition for live concerts, and a personal boycott of Apple’s iTunes
Kid Rock skyrocketed to fame in 1998 after a decade of toiling in the shadows of obscurity.

Kid Rock may be a hit-making machine, but his very survival in the rough-and-tumble music industry isn’t about record sales anymore. Although Rock sold an astonishing 12 million copies of 1998’s Devil Without a Cause, his five albums since then — combined — have yet to top that mark.

Normally, such a lag in sales would cause a record company to cut back on everything from tour dates and hefty advances to over-the-top promotions and four-star accommodations. An artist experiencing such a free-fall would also be relegated back to the tour bus —  a sharp letdown from private jets.

But Kid Rock is more financially successful than ever. His two shows last summer at Comerica Park were his largest sellouts to date, and his national tour played to boisterous crowds. His net worth, as measured by record sales, concert tours, film appearances, and private business ventures is estimated at $75 million.

So what gives? While many artists rely on iTunes’ 99-cent songs to help offset a sharp decline in CD sales over the last decade, Kid Rock, 38, eschews Apple’s popular music service.

“There are a lot of little reasons” for the boycott, Rock says. “I just don’t like being told what to do and how [I] have to do it. I mean, I believe in the free market, so to have someone tell me that I can only sell my songs at 99 cents — I didn’t like that, and they were like, ‘Well, you just want to sell records,’ and I’m like, ‘Well, I want to sell records, but, no, maybe I want to give them three songs for 79 cents.’ Well, they won’t let you do that, and my firm belief has always been if you have the best product out there, it doesn’t matter where you sell it. If it’s the best, people will find it, and I think I proved that with this record.”

Released in October 2007, Rock N Roll Jesus is Kid Rock’s first album to reach No. 1., says Ken Levitan, Kid Rock’s manager and co-owner of Nashville-based Vector Management. More than 4 million copies have been sold worldwide, and the song “All Summer Long” has sold more than a million copies overseas.

With all that’s ailing the record industry, a hit song is still a hit song and can do wonders to drive ticket and merchandise sales. An amalgamation of Lynyrd Skynyrd’s “Sweet Home Alabama” and Warren Zevon’s “Werewolves of London,” Kid Rock’s “All Summer Long” reminisces about two teens who fall in love in northern Michigan during the summer of ’89. With help from a hit video, it propelled Rock N Roll Jesus to the Top 10 for 17 consecutive weeks in 2008.

And even though he enjoys distribution at retail powerhouses such as Target, Wal-Mart, and Best Buy, the record industry has drastically changed over the last decade, and it’s unlikely Rock will ever have another record as successful as his original multiplatinum Devil Without a Cause.

Why? Ever since the advent of rock ’n’ roll in the 1950s, the industry blueprint for success was straightforward: release a record, get radio airtime, tour, and sell merchandise. If an album tanked, an artist would typically get a second chance; but if that failed, obscurity was right around the corner. Today, with few radio stations playing new music and the relative availability of free songs on the Internet, the order has been inverted.

Now, live music drives the industry, followed by third-party sponsorships (think “Budweiser presents”), merchandise, and then records. For a showman like Kid Rock, who valiantly tried to become a rapper in the 1980s but eventually found success tapping into his rock ’n’ roll roots, the transformation brought its share of challenges.

Whether he saw the changes coming, or benefited from a burning ambition to succeed (he taught himself to play nearly every instrument), Kid Rock embraced what some business advisers might caution against: diversification. One maxim of diversification is that it can be difficult to master one market, let alone several. Plus, it distracts from the core business.

Businesses large and small have successfully expanded into new markets, but many others have met with failure. Close to home, Ford Motor Co. lost its way in 2000 when then-CEO Jacques Nasser led a plan to acquire everything from repair shops to salvage yards to recycling centers in a bid to control the entire life cycle of a vehicle. The plan failed, the stock took a nosedive, and after Nasser submitted his resignation in 2001, the automaker had little to show for its sizable investments.

For Kid Rock, the plan was to diversify his rock roots with soul, country, and rhythm & blues. But if fans don’t like the music — or worse, he makes a fool of himself — it could minimize his hard-rocking image and affect record sales. Besides, crossing so many genres is a rarity.

“For him, he’s got talent; he knows it, but he doesn’t rest on his talent,” says Curt Catallo, owner of the Clarkston Union Bar & Kitchen and a creative director at BBDO Detroit. “He works hard, has his share of fun, but he gets up early every morning to see his son off to school. It’s a rock ’n’ roll lifestyle, but he’s a father, too.”

Currently in the studio finishing up his next album with renowned producer Rick Rubin, Rock describes it as a classic American rhythm & blues, rock ’n’ roll record. “The recording is done right here in Clarkston,” he says. “It’s where I’ve done every record since my first one. I did my first one in Detroit at the White Room. We used to mix in L.A., but the last few records we’ve mixed right here [in Michigan]. So, 99 percent of it is done right here.”

Composing, however, isn’t done on a schedule. “The writing’s wherever we’re at,” Rock says with a laugh. And he finds inspiration everywhere. “I thought of something the other day when I was looking at an old Chevy ad, and I kind of adopted it for my motto. I switched it around a little. It’s ‘You know I make many different colorful styles of music, but every one of them is red, white, and blue.’”

That he even made it this far in what can be a cutthroat industry — scalpers, ticket surcharges, greedy promoters — is astonishing. When he’s not on stage, he’s promoting his own beer, he revived the “Made in Detroit” clothing line, and he even partnered with Jim Beam on a new line of bourbon.

“He’s really two people,” says Jeff Bouchard, president of Southfield-based event-production house Gail & Rice. “Bob Ritchie is a really wonderful homegrown, pro-Michigan guy with a heart of gold who would do anything for you. Kid Rock is a flamboyant, international rock star.”

Robert James Ritchie was well-educated by affluent parents who weren’t exactly thrilled that their eldest son was eschewing the family’s Lincoln Mercury dealership to pursue a career as a rapper/rocker — and, at times, a not-very-successful rapper/rocker. But Rock had a passion and determination for success in the music industry, which, perhaps, was inadvertently fueled by his parents.

Looking back, Rock thinks he can pinpoint its origin. “My parents had barn parties on Friday nights,” he says. “[They] would drink and listen to rock ’n’ roll, and Dad says that was just getting warm for Saturday [night].”

Rock’s parents worked hard and played hard — it was their philosophy.

“Mine, too,” Rock says. “I just might have taken it to a little more of an extreme. They loved rock ’n’ roll, classic rock, country music. My dad liked a lot of the outlaw country stuff — Waylon Jennings and Johnny Cash, all of the early Sun Records; they loved Jerry Lee Lewis, Carl Perkins, Elvis. My mom loved Elton John and Fleetwood Mac. They both loved the Rolling Stones and, of course, Bob Seger was basically spoon-fed to me.”

While his parents’ musical interests have clearly influenced Rock, his father’s work ethic and drive did, too. As a child, Rock often resented what he perceived as his father’s workaholic tendencies and his ambitious drive. His father pushed him hard, and he was expected to do well in school. He never made it to college.

Kid Rock is equally at home playing to large stadium crowds or at fashion and entertainment events like 2008’s “GM Style” in Detroit. Photograph by Nick Martines

Until selling it in 1999, Bill Ritchie owned Crest Lincoln Mercury in Sterling Heights and worked long, sometimes grueling hours. In 1993, Rock purged his anger and troubles with his father in the song “My Oedipus Complex.” Time and success have assuaged the strain on their relationship, and now Rock’s father is one of his most trusted advisers.

Bill even calls himself “Daddy Rock.”

“I’ve always been surrounded with good people,” Rock says. “My dad put himself through college working odd jobs when he was a kid, and graduated [at the] top of his business class at Michigan State, and then built a very successful car dealership.”

The entertainer admits his early years came with a lot of soul-searching. “Before, it was just ignorance; [I was] a kid who had no clue what he was doing,” he recalls.

Today, the model of his father’s work ethic, ambition, and drive are evident in everything Rock does. Family and business are intertwined for Rock. His oldest sister, Carol, is his business manager, having just earned an MBA. Rock believes that she can best evaluate the potential business deals he’s now being besieged with, and that because she’s family, he can truly trust her. “She oversees everything in the business,” Rock says. “She’s very, very smart — really takes after my dad. I can count the money, [but] that’s about it.”

With all that’s going on around him, Kid Rock needs the help. “We get so much stuff coming in,” he says. “I have offers for deals for cell phones, fragrances, cigars, potato chips. I mean, every day it’s something new, and [we’ve] kind of got to [sift] through it and decide what’s really close to my heart.”

Carol also frequently watched Rock’s son, Robert James Ritchie Jr. (“Junior”), when Rock was on tour over the years. In fact, his tour dates are arranged around Junior’s school schedule. “He’s a great dad,” Levitan says. “There were a lot of years he worked very sporadically because he was raising his son. He would only work and tour on the weekends, when Junior was out of school.” Even his relationship with actress and former Playboy Playmate Pamela Anderson, Levitan adds, revolved around Junior (now 16) and what was best for him.

After a stint in Brooklyn to further hone his craft, Rock returned to metro Detroit and formed his now-famous backup band, Twisted Brown Trucker. In 1998, he signed with Atlantic Records and released Devil Without a Cause, which was initially a dud.

But then Rock hit the road and eventually met talk-show host Carson Daly, who booked him to perform on MTV’s hit show Total Request Live. Sales of the album quickly shot up and, after Rock’s blowout performance at Woodstock 1999, Devil went double platinum.

By the time he finished touring two years later, Rock was eager to expand his horizons. Country music would soon become an even larger influence, with Hank Williams Jr. becoming a close friend and mentor.

Never one to hew to a recording label’s deadline, Rock says his new album will be released “when it’s ready,” most likely in the first quarter of 2010, although concertgoers heard some of the songs last summer.

With myriad business opportunities to capitalize on his well-known name and image, Rock and Carol have chosen to work with two key companies that best represent Rock and his image. The first is his new beer, Badass Redneck Lager, introduced at his July concerts at Comerica Park and now widely available.

New York-based Drinks Americas, which created premium liquor lines for Donald Trump and Willie Nelson, was brought in to nurture Badass. “The best part of the deal is that we can get it made here and keep it all made in America … the barley and hops and everything that goes into it,” Rock says proudly. “There was always something about having a great American beer around, and I saw an opportunity for it when everything just started coming together. It just kind of all makes sense, you know, to create jobs in Michigan. I love beer, as you know, and anything I’ve ever endorsed has never really been a stretch for me. Really, it’s only been beer and the National Guard.”

As Rock and Drinks Americas were considering various Michigan breweries, they discovered a plant in Webberville, just west of Howell, aptly named the Michigan Brewing Co. Badass’ ingredients further the connection, with water from the Saginaw aquifer, and Michigan and other Midwestern hops used in the brewing. Recently a quasi-state development agency approved a $723,000, seven-year tax credit for the $7-million project.

Rock has aligned himself with another appropriate partner, as well: Jim Beam. Together, they’ve created a new cherry-infused bourbon, Red Stag, which was the title sponsor for his 2009 Rock n’ Rebels tour. “I’ve been drinking and singing about Jim Beam for years,” Rock says.

Kelly Doss, senior director of U.S. Whiskeys for Beam Global, thinks the partnership was a natural. “We love his authenticity,” she says, “and we love his longtime support of our military.”

Tapping other avenues of growth, the artist introduced the Kid Rock Block Party, a sort of mini-festival for entertainment, food, and merchandise sales outside most of his summer concerts. Normally, a promoter would organize such activities. “I’ve been with Kid Rock out on the road, and I can tell you he is one of the biggest promoters of Detroit and the Motor City that you’ll ever meet,” says Chris Ilitch, president and CEO of Ilitch Holdings Inc. The company’s Olympia Entertainment division co-produced the Comerica shows with Live Nation. “The block party was just a great, innovative idea where he offers a different experience for his fans. Plus, he kept ticket prices low to reflect what’s going on in the economy.”

Rock has also quietly resurrected the iconic Made In Detroit clothing line, whose logo of a burly laborer clad in work clothes and clenching a wrench was created by Gary Arnett. Rock acquired the company out of bankruptcy court in 2006, after its original owner, Robert Stanzler, ran into financial problems.

Kid Rock is also known for his random acts of kindness. When Jay Leno called Bouchard to help arrange a pair of free shows for Michigan’s unemployed last April at the Palace, he was looking for someone to introduce him.

“Jay said he’d like somebody who’s a working-class hero for Detroit to be part of the show,” says Bouchard. “I called Bob — he was recording at the time — he just said, ‘When and where?’ He introduced Jay [at] both shows. He was very appreciative of Jay’s efforts for Detroiters.”

Support of the American military has been a long-standing passion for Rock, as well, who’s lent his voice and image to ads for the National Guard. More significantly, he’s spent the last several Christmases entertaining the troops in Iraq and Afghanistan.

“These are grueling trips,” Levitan says. “There could be 20 shows in seven days. Often, there are three shows in a day, everything from huge shows at the main bases to then flying to small outposts, where they’ll put on a full show for just 20 or 30 troops. He’s one of the main performers, and Christmas is often one of his only down times.”

It may be rough, but Rock sees it as a gift. “I do it because I enjoy the very freedoms that we all enjoy,” he says. “I understand that it’s not free, and how many people have sacrificed throughout the years so we could have these freedoms? So without ever having been in the military — and being in the position that I’m in — I feel it’s the least I can do to give some of my time and talent and share it with the people and their families, who do sacrifice so much to be over there.”

Rock perhaps appreciates his freedoms most each year at Christmastime: ‘We’re not gonna do presents,” he tells Junior. “I’m going to be with some people [who] can’t be with their families. You think it’s bad with me being on the road? Imagine if I was gone for a year in a very dangerous place.”

So while his net worth may indeed be calculable, Kid Rock says the ability to share life’s hard lessons with his son is simply invaluable.