August 22, 2019 • 40 mins
As a kid, there were some things Translation's founder and CEO Steve Stoute just knew: that there were 50 houses on his block (he used to count them!), that there was no job he wasn’t willing to do (from shoveling snow to delivering newspapers), and that the Bangles didn’t have to be classified as either black or white music. Hear how following his curiosity led him to the record business, why the Men in Black soundtrack was a revelation to marketers, and how building bridges and railing against the “fake metrics of segmentation” has made him the incredible success he is.
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Episode Transcript
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Speaker 1 (00:02):
You're listening to Math and Magic, a production of I
Heart Radio. I went to a Catholic school. There was
five black kids in the school. I was one of
the everybody's driving I Rocks and listening to Billy Idol.
They're all also listening to run DMC. They're also listening
to Best Boys, and they wanted him more. Music was
(00:25):
the thing that was clearly the connector. If you started
the conversation from what we have in common versus what
we have in different you'll actually be surprised at all
of the commonalities that you have and you can build
on top of that. That path was the path I
worked my whole career with. I'm Bob Pittman. Welcome the
(00:50):
Math and Magic stories from the Frontiers and Marketing. We
examine that very special mix of the analytics and insights
and marketing math, but that very full excitement, craziness and
sheer creativity magic and how those come together to create
legendary marketing ideas and businesses. Today we've got the perfect
example of someone who has had amazing insights plus the
(01:14):
creative talent to build new products and businesses from them.
Steve Stout. Steve was in the music businesses hip hop
was blowing up. He figured out how that could change movies, music,
and advertising, often combining them into one unified effort. He's
(01:34):
the CEO and founder of two well known companies, United
Masters that helps music artists retain control of music and translation,
a creative agency doing some of the most forward thinking
work and connecting big brands the culture and often the
influencers in music and sports as well. He grew up
in Queen's High school. Injury derailed the possible careers of
(01:56):
athlete and set him on another path. We want to
get into that path. But before we do that, let's
welcome Steven. I like that in yet, and we're going
to jump into you in sixty seconds. We're gonna ask
you some questions lightning round style. Don't think too long,
just say the first thing that comes to your mind.
So here we go. Do you prefer Manhattan or Queen's
(02:18):
Manhattan Chocolate or Vanilla Vanilla eminem or Dr Dre Dr Dre.
Yankees are Mets, Mets, Giants are Jets. I hate them both.
It's about to get harder. Secret talent seen around Corners
favorite city, New York. This is gonna be a really
tough one. Best live concert? Wow, what I haven't seen?
(02:40):
I would love to have seen Bob Molly play live,
and it's very hard to find anybody who's seen it.
Have you seen him Jamaica? I love Jamaica. I've never
seen him live. The best live concert I've ever been to.
Smartest person you know. The smartest person I know is
Ben Orwits. Hardest working celebrity you've managed. I can tell
(03:00):
you the hardest working celebrity I've worked with is Lebron James.
Worst bad or fashion trend you've participated in. Everybody was
wearing yellow pants, but it was a part of everybody
was doing it. Who would play you in a movie? NS?
Proudest achievement starting a family. What's one food you'd never eat?
(03:22):
I don't like any like it's a substance like a jelly, jellyfish,
jelly anything jelly. I'm I'm not touching that. Jelly's out. Okay,
Final one? Where was your last vacation? Last vacation was
in Paris? Okay, let's get started. Great quote from you.
Music moves culture. What do you mean by that? Culture
(03:46):
really is a set of rules in which a group
of people lived by and moved by music has always
been one of the greatest indicators of where the world
was moving to. If you listen to the lyrics, if
you listen to the subject matter, where the perspective of
the song is coming from, where the artist is coming
from themselves, he'll tell you a lot if you follow
(04:08):
that line. Most people don't follow that line. And when
I got into the marketing business, what I wanted to
do was use that line around music in the culture
that it was an indicator of, to remove models of segmentation.
When I got into the business, Bob, the thing that
was most appalling to me was eighteen to twenty four black, eighteen, white,
(04:31):
eighteen and twenty four hispanic. These things don't even mean anything.
There are fake segmentation media metrics that was created at
a time when I guess it mattered, but it really
didn't matter at the time when MTV came around, But
yet it was still a currency that was being traded upon,
and I think it made no sense. And I always
felt like music proved that model out, but everyone kept
(04:56):
on refuting it because it was a good business to
be in segmentation studies. So you obfuscate that and keep
going back to reach and general audience demographics. In the sixties,
before FM really took hold, a m would play everything
Otis writing and then you'd play at Karen Carpenters song
right after it didn't matter. And then FM when they
(05:18):
started splitting the signals, is when segmentation really became alive
on radio because you got a chance to make up
all these narrowcasting. Narrowcasting. Okay, there it is, and I
think that narrowcasting has done a lot to affect media's
perspective on how you look at people and how you
put people into boxes. One of the most craziest things
(05:38):
I've seen when I was in the record business. It
was the mid nineties and rap music started to take off.
The crazy thing was at the pop stations didn't play
rap music. They probably let one in the playlist. Then
they started letting two in, but they were much more
focused on Britney Spears and that stuff rather than the
rap music. But the local sponsors they wanted return and
(06:03):
they knew that the young people were listening to rap,
so they started this format called urban crossover. Urban It
was a category of stations that had range that could
play hip hop music and some pop records. Hot ninety
seven in New York was a churban station. Probably one
six in l A was a urban station. And these
(06:25):
were crossover urban stations. And when I seen that, I
was like, Wow, this industry is twisted. When did you
have this insight? I mean, it's clearly fuels what you're
doing fuel sud the fuels your marketing. Where did this
insight come from? Living with my eyes open? Man? I
grew up. I went to a Catholic school. There was
five black kids in the school. I was one of them.
(06:46):
I'm going to school and as much as everybody's driving
Irocks and listening to Billy Idol, they're all also listening
to Run DMC, They're also listening to Beastie Boys, and
they wanted him more. I didn't like Billy Idol's music.
I didn't cross over that way, but there were songs
that I got introduced to I did like I did
like the Bengals, like I definitely like the Banker's record, right.
(07:09):
So there were things that I started being introduced to,
and I'm like, once we remove these walls, we have
more in common than the world actually realizes. And I
think that's what led me to that insight, and really
that's what led me. That path was the path I
woke my whole career with understanding that if you started
the conversation from what we have in common versus what
(07:31):
we have in different you'll actually be surprised at all
of the commonalities that you have and you can build
on top of that. Once I started going into the
working world and started seeing people being separated, I didn't
understand that because that's not the way I was in school.
That's not was in my social life at school, that's
not how it was on my football team at school.
And music was the thing that was clearly the Connector
(07:54):
let's go back a little bit. Your mom was a
nurse with the Merchant Marine immigrants from triniday At, so
your first experience must have been understanding and navigating a
culture right there in Queens. Did that play a role
in this? I mean, well, yeah. When we first moved
to Queens, we lived right now Bellmont Race Track, and
we were one of the few black families on the block.
It was a block of fifty houses. I used to
(08:16):
count the houses really long. The neighborhood reverse the gentrified.
There was like only two white people left by the time,
the early eighties game, and it was a bunch of
Caribbean people like us, and they started living in that
area in Queen's Village. Things started to change when more
people from the Caribbean moved into the neighborhood. Let me
stay in your past a little bit. You were high
(08:38):
school football player, certainly had dreams of the pros than
you had. An injury changed all that, but one another path.
You attended a number of colleges and you joined this
very famous club of which I'm also a member of,
the college dropouts. Why did you leave college? I was bored, Bob.
There was nothing in it that made me feel I
didn't have the desire to be a good student. I
(08:58):
didn't care enough. I didn't even know what I was
gonna do, but I knew I couldn't do that. You
were a kid that shoveled, snow erected tensive flea markets,
delivered newspapers saying Christmas carols, everything every man, and then
at nineteen you were actually signing up people for mortgages.
You were in the real estate. That was in the
real estate businesses. So how do you make the jump
(09:20):
from the real estate business to the music business. How
did you get that idea? During that time, I had
met a girl. She was in the Army reserves, and
there was another guy in the Army reserves of her
who told about making dance records. And you can put
like two thousand dollars and cut a dance record. You
make like five ten pieces of final and you can
sell them at records and you can sell them to DJ's,
(09:42):
And there were these dance artists that were looking for
guys to do that. As an entrepreneur, you look under
every single rock. Anything could be an opportunity. You don't know,
you can't predict where the opportunity is going to come from.
So I took the meeting with the guy and he
happened to be the DJ of Kid and Play. I
didn't mean anything because I was actually doing good. I
had like forty two dollars in the bank. Yeah, and
(10:06):
you were how old nineteen. I didn't need anything from them.
So I was around them and I didn't need money
from them. I just wanted to be around and see
what they were doing. Fast forward, I became Kid and
Players road manager, and that's how I got into the
music business. So you go to r C A you
wind up as A and R director. Joe Galante? How
(10:27):
old were you? You were a kid. Joe Galante took
my phone call. You just called him, and I just
called Joe Galante. Joe Galante had come from Nashville to
New York. I knew Joe decades ago from country news.
That's crazy, and I didn't know who he was. Somebody said,
there's a guy named Joe Galante who's giving out deals.
I called Joe Galante up. He takes a meeting with
(10:50):
me and pays me four thousand dollars a month as
a consultant. I'm literally sitting on my mother's step, living
at home, getting fourth thousand dollars a month. I couldn't
even believe this. The check just kept coming coming. And
then he introduced me to the guy who ran ahead
of black music most segmentation, Skip Miller. Skip Miller was
(11:12):
a former motown guy. He came to run it, and
they turned me from a consultant into an employee, and
they hired me as an A and R executive. Converted
me so we're on segmentation. They shut down the Black
Music division. Why did they shut it down? Because the
record business didn't know anything. Capital shut down, the Black
(11:33):
music Department r c A shut down, the Black music Department.
Columbia had just got rid of Deaf Jam Michael Bolton
was still selling records. All the things that they knew
was still working. So you know, Bob, how it goes.
People get accustomed to the thing. They know they can
get fat off of that. Why are you gonna worry
about tomorrow? They could just keep eating off for yesterday.
They don't even know who these guys look like. What
(11:55):
did they They were wearing yellow pants. They didn't want
those guys around down and they really got rid of it.
They didn't know the difference been good and great. And
I remember the day I was trying to get this
one producer the songs to do a remix for and
he kept them blowing off the meeting. This guy's meeting
me at ten am. Meet skipped Miller at eleven am.
The guy supposed to meet at ten am does not
(12:17):
show up till eleven He walked in my office. He's
on the phone. He had just got into some trouble
with his girlfriend and he's like gosh, hushing me and
I'm like, look, I'll come back. They're shutting down the
black music department. Kip Mill fires me. So when I
come back in my office, this guy is sitting there,
there's no remix to give him. I said, I just
(12:38):
got fired. He goes, well, my girlfriend just broke up
with me. I said, well, what are you gonna do?
He goes, why don't you manage me? And I managed
him and we went on a run. The track Masses
we produced, I Ruled the world that whole, first NAS
album discovered, Foxy Brown made Hello, Cool Jay's Big Jobum
(12:58):
marriage he Blige album. We went on a run for
like five years, Candy Rain for Soul for Real. We
went on a run making records and that ended up
becoming my my thing, managing producers. I literally got five
went back to the office, and my career was sitting
in the room. Your future was there sitting in the room.
(13:19):
So how did you rejoin a major record company? What
was that appeal? You go back to Sony Senior VP
of A and R President of Urban Music. Well, what
happened was NAS takes off. The guys at Columbia know
nothing about black music. They could sit around and they
act like they have great ads by closing their eyes
and you know when the song plays, like as if
(13:41):
they're doing something. You've met guys who do that. They
they closed their eyes. They're like, oh my god, you're
not climb Davis. Just don't close your eyes. So they're
sitting there closing their eyes and ship, we want you
to come on and do this at Columbia, and I'm
like nah. They offered me some money and I remember
(14:01):
looking at the guy's face like, Yo, you crazy. I'm
not doing that. And then Mariah wanted to work with
the producer's Mariah Carry And Mariah was really running black
music at Columbia. She knew everything. She could close her
eyes because she knew exactly what the fun she was
listening to. She said, I want to work with those
talented guys, and because I managed them, Matola wanted to
(14:23):
sit down with me. Her husband Tommy, he was the
CEO Sony at the time. And when I sat down
with Tommy, he was looking at the guy who ran
Epic and the guy who ran Columbia and said, they
don't know what the funk they're doing. Those guys are
trying to work Freddie Jackson. No disrespect to Freddie Jackson,
but R and B music was sort of on its
way out, and he needed the next guy, and he
(14:45):
gave me a job overseeing both of his things. Meanwhile,
these guys are older guys, and they're like they weren't
mentors of mine. But I certainly felt weird acting like
that I was their boss. But they certainly couldn't sign
anything and make any real decisions unless I got a
chance to see whether they knew it or didn't know it.
How old were you? Then this must have been wildly
(15:05):
heavy stuff. It gets wilder. Okay, let's give it to me.
Let's get wilder. So I started doing that worker at Mariah.
It's fantastic, she takes off. I'm gonna give Mariah Carey
credit right here. Nobody wanted old dirty Bassett on the
Fantasy remix at Sonny. They didn't even understand that that
was Mariah Carrie's decision, and she put everything on the
(15:28):
line to make that call. She had everything to lose.
She didn't need that audience. She didn't need a rap audience.
People do it now because they need it. Madonna does
a song with the guy from Ray Shermerd because she
needs that. When Mariah Carrey was doing that, she didn't
need that ship at all. She was doing it because
she knew that ship was fresh. She put that format
(15:48):
in play, and she risked it all. Her husband didn't
want it, her label head didn't want it. She did that.
She brought black music to Columbia and a lot of
people came there because they wanted to be around that
orbit that she had. For sure. I sat there, I
did it for a while. Everything was cool for a minute,
and then Jimmy Ivan came and he wanted me. How
(16:11):
did Jimmy know about you? What was your relationship? Okay,
so here goes that one. There's a guy named John McClain,
very famous at Ain't M Records. He was at Interscope
early when they started it. He also made Janet Jackson's
albums when she was at Ain't M. He Hi, Jimmy,
Jim Terry Loose. I don't know who your audience is listening,
but they're gonna get full musicology. That's what we want.
John brings me out to meet with him because he
(16:34):
wants opproducers to produce records for Interscope. I go out
there to three days go by No John McClaine, and
they have me stay at the Lowe's in Santa Monica.
Day one, it's like, okay, cool mangan on the three
day free hotel or whatever. Day three, it's like, what
the funk is this? John's assistant calls Jimmy and says,
(16:55):
to Jimmy, John has some guys sitting in a hotel
for three days. So I go sit down with Jimmy
and we started talking about music. Within a week, Jimmy,
it offers me John John. That's how it happened. That's
how it happened. No regrets leaving Sony. No. When I
listened to this. So I had one year left on
my Sony deal, and Jimmy signs me a year out.
(17:18):
The first year is a consultant, but I'm already signed
for the next four years beyond that consultant. It's like
the NETS deal with Kevin Durant. They know the year out,
but they got the next three years. So my year out,
I met Sony knowing I'm going right to interscope. I
do one or two things that interscope. One of the
things I had to do was relocate the New York office,
(17:38):
so I put their office right near Sony, so I'd
run back and forth between Sony and Interscope Sony to know.
Sony had no idea. I would run from street to
fifty seven Street for meetings that first year all the
(17:58):
time because I was setting up my entire office over that.
It is crazy, I was, you show up at dinner Scope,
You've got amazing artist d MX and ri Ku Dr Dre.
When I got to Interscope, my job was to get
rid of all the things that wasn't working. So tell
(18:19):
me what wasn't working. Dr Dre and death Row had
broken up, so Dr Dre was building Aftermath. He hadn't
yet signed Himinem and the first project he did was
a project that I put together called The Firm. It's
old a million records. It should have been bigger because
it was a supergroup, but it definitely gave him his start,
and he's always been grateful with me. But sure, what
(18:43):
was your vision for it? I didn't really have a
vision for it. That would be unfair for me to
say that. I just knew that. Being around Jimmy, I
learned a lot. But the thing I brought that that
was important was he wouldn't want what was happening in
New York. So I brought over a group, the Rough Riders,
and that brought a Swiss and a bunch of artists
that was important at that time, and that was a
(19:05):
big deal for us. That was a big deal that
mattered a lot. And then I went with Jimmy to
go sign Enrique Iglesias. Ricky Martin had just taken off
and we wanted to get into the Latin game, and
Enrique had just got out of his deal and Edgar
Brafman owned Universal at the time, and he really wanted
that artist. Basically said we want to pay forty million
(19:26):
dollars for it was like that kind of money. And
I remember I was the guy running around trying to
entertain him better than everybody else. I brought him out
to the things, you know, took him to different places
or whatever. Anyhow, we ended up signing them. The first
record we broke was actually on the Wild Wild West soundtrack,
was a song called Bala Moss. So let's go to movies.
You get in the movies about this time, Wild Wild West,
(19:49):
Men Black? Yes, I did Men in Black at Sony.
And what happened was I just knew that back then
movie soundtracks had big recording budgets because they would part
of the p and A. They basically put two or
three million dollars towards marketing the movie, towards the soundtrack.
So if you were the record company who got that soundtrack,
you would essentially get marketing money from the movie company
(20:12):
that was unrecoupable. So it was great marketing. And back
then people would buy ship. I mean people put the
dows and creeks out. I mean I had a big
hit on it. People would buy anything, so men in
black sold and I was in the Will Smith business.
So when I went to Interscope, I said, let's do
Wah wah west over in the Scope. And the first
song we did was Bollamos and it was huge, huge,
(20:34):
And then right after that was will Smith wa while
West and they both came out around the same time.
And that was another big mark in my career because
I did it and I got credit for doing it.
Just hold on a second, because we've got so much
more to talk about. We'll be back after a quick break.
Welcome back to Math and Magic. We're here with Steve Stout.
(20:58):
You had this incredible career in music at sort of
this moment that music was going through a major change.
You were one of the leaders of that change, and
then you jumped advertising. You start this agency with Peter Arnell,
legendary person. What did you think advertising needed that you
had the record business didn't know that difference been good
(21:21):
and greet at that time. There were guys who I
felt that weren't my equivalent and talent making the same
amount of money I was making. That didn't bother me
so much, but it made me feel like I actually
went through depression. I think, because I'm like, what is this?
If this is about paying some black executive who can
speak to guys on the street and speak to the
(21:42):
white guys that corporate and gather as much hip hop,
ACTX and R and b X as possible and everybody
gets paid two million dollars to do that, then I
don't want to do that. And that's just how I am.
I learned that from my dad. The principles didn't add
up to me, and it was all about the principle
was too many dolls a lot of money, but I
couldn't make it make sense. So why advertising? Because after
(22:04):
Will Smith put out Men in Black and sold all
those albums and ultimately sold all those glasses, and it
was the guy who did the product placement for Ray
Band with the glasses. So I met somebody who said,
that's good that you're making money selling the music, but
you can actually be entrepreneurial and sell the things around
the music. Who are your clients? Have? Pass was one
(22:25):
I did, reboking McDonald's. So my big thing was I'm
loving it for McDonald's and rebok the jay Z sneaker,
the fifty cents sneaker, the Farrell sneaker, and how do
you converge hip hop and sport and put that together?
So you guys sold pass Omnicom two million or so
was supported number. Why did you sell it? I mean,
(22:47):
you guys were on fire. I was thirty two years old.
I made a bowload of money. Maybe that's the reason
I didn't have to worry about money again for the
rest of my life. That was how I thought about it.
So you jumped into advertising. You have this immediate success,
You monetize it very quickly, putting inside the money and
(23:07):
the interesting stuff. Why did you learn about advertising on
this first foray into it? The Emperor was but as
naked that all these guys running around didn't know ship
about anything. I'd listened to you see TV commercials that
had fake rap music in the background and casting was
really bad, like four white guys and one ambiguous black guy.
(23:30):
It was supposed to be friends. And I was sitting
there there going this is all wrong. This stuff isn't
really good, But nobody that can make it good has
a seat at the table. Why didn't they have a
seat at the table? Segmentation There was an older generation
of African Americans that were doing African American creative agencies.
(23:51):
They were incentivized to do stereotypical African American work, so
it'd be like a car driving get the New christ
Love blah blah blaw. You could hang with your homies
some stupid ass ship that's not real, and they would
do that because that's what the companies would buy, because
that's what they thought was what African Americans wanted. And
(24:14):
I'm like, that's not it. I'm gonna take everything I
learned from the music business and bring it to advertising.
And that's why I called the company Translation, because I
was gonna translate the values of what I've seen in
culture the fortune companies. How did you build the agency?
You're really starting this when that's this is me and
(24:35):
a desk and two assistance in an office at a
fish tank. When I left Universal, Jimmy and Doug Morris,
they took a percentage of the business. It was a
small percentage, and they gave me, I think, like two
years of I could stay in there and do it.
So I had this tank, two desks to assistance, and
(24:56):
me and I went and got busy. My first early
clients was Hewlett Packard, which was fantastic. How did you
get Hewlett Packard? This is an unlikely company you would expect.
McDonald's came to me first because McDonald's I'm loving it.
I did at Arnell Group. So when I left, McDonald's
said we're retaining you immediately. Don't worry about it. You're good.
Inter Scope was a lead generator for me. That's how
(25:19):
I used them. I used them as a lead generator,
so if I need any production done, I'd use them.
But like if somebody called them and said could we
put blah blah blah in an ad, they'd say you
should look at this company translation and that Jimmy would
do that, or Jimmy's company would do that. Steve Burman,
So they called Calie Fierina wanted to do something with
(25:41):
music and it was cool. They let me into the meeting.
They had just did a deal. Steve Jobs did one
of his Steve Jobs like deals to them. HP made
their own version of the iPod, which looked exactly like
the iPod. He just basically got them to distribute the iPod.
He got a little logo that was really small somewhere
in the back. They couldn't do anything so that you'd
(26:04):
go buy it. With Steve Jobs when it was the iPod,
they have distribution, and he didn't want to build a
distribution team, so he used HPS distribution to give them
the HP version of the iPod. They may have made
a dollar margin on it, but it was then being
cool and he got distribution in Circuit City and Best
Buy and everything because HP had the sales team. So
(26:27):
I said, we call it for your Ina and her
ade agency at the time, and I said call it
when you unveil this, What are you gonna unvail? Everybody's
selling them ads. No one thought about the core problem
and said what we're gonna do. We're gonna use your
printing business and we're gonna make customizable tattoos so that
people can customize their iPods. We're gonna go back to
interscope and we're gonna get all of the artists on
(26:49):
Interscope to give us their image and likeness so that
we can actually make these tattoos. So HP did the
iPod deal, not to sell iPods, but to sell printing
ink and these sheets. One of my best ideas didn't
catch fire, but it caught fire enough to put me
on a fast track to help being Gorow my company.
And by the way, it was one of those things
(27:10):
that you know, it came like this. I looked at it.
I'm like, nobody has an answer. But if you take
this thing back to printing, which is where they made
their profits, they did this lost leader deal in order
to go back, but no one had that idea and
what to print. I went to deals with the n
b A Major League Baseball in his scope. I still
have this stuff and it won like Time magazine idea,
(27:32):
you know, one of top ten ideas, these printable skins.
They called them skins. It was two thousand four five.
So you've done this remarkable job. You launched Translation now
your own agency. Two thousand eleven, you release a book,
The Tanning of America, How hip hop created a culture
that rewrote the rules of the new Economy two thousand
(27:53):
foh one makes a four part documentary out of it,
The Tanning of America, One Nation under hip Hop? What
was the big insight here? Is this about segmentation or
is this about beyond? What happened was the world started
to see it at this time. There was this day
when they would look at a black kid wearing tight
jeans and a skateboard and he was looked at like
(28:13):
he was a sellout. He's listening to rock music, forget it.
And there was his white kid and greenwage. I just
think a Tommy, He'll figure his son where in his
hat backwards, a Yankee hat backwards, baggy pants, and people
would call him a wigger, terrible words, and I'm like,
they're not that, you idiot. They grew up listening to
(28:36):
hip hop music. They grew up with these worlds collided.
Fred Durst is not a wigger. Fred Durst grew up
listening to Run DMC. Were you talking about You guys
are wrong. You guys don't know what you're talking about.
You're sitting back growing up with a Bruce and Bob
Dylan and a lot judging these kids. These kids grew
up listening to different music, music drives cultures. My point,
(28:58):
they're sitting there saying only things about these kids, and
I wanted to write a book that not only stopped
them from shaming it, but I wanted to put a
flag in the ground that the world has changed, and
that segmentation is over. The cover of a book is
the Census Bureau form, and every box is checked. One
of the greatest things I learned on that journey of
(29:20):
writing that book and doing the documentary was I actually
went to the U. S. Census Bureau and I got
a meeting with a guy who ran it. His name
is Steve Jos and I walk in. I'm like, Steve,
I'm writing a book called at Taining of America and
just that in the third and he's he's like a
forty five year old white guy at time says, I
(29:40):
know everything you're talking about. I said, why, he goes,
My daughter is twenty seven years old getting married next
week to an African American. I can tell you everything
about this. We sat down and we became great, great friends.
The U. S. Census Bureau wants this information to be shared,
so Steve with go with me to go visit clients,
(30:02):
and the government would pay for it. And I do
my spiel to a client about my company and translation
and changing demography, and then I'd break out the guy
who runs a census bureau to back me up. And
the government was paying for this. They didn't take a
piece of your business, did they. No, they didn't take
(30:22):
piece of my business. I mean he pitched butter Wiser,
he pitched state Farm. State Farm changed how they were
zoning rentals. They had it all wrong. That's amazing. And
this was really early in this data science. Nobody called
it anything. It was called obvious. When we talk about
math and magic, one of the hot things today is
(30:44):
had him recognized. Recognition has always been at the key
of you. I don't even know how people don't have that.
It's the first thing I see. I can't even not
see that. So in spite of you being a creative guy,
you're also a bath mind. Until my daughter of time.
Math is life. If you understand math, and you understand
(31:04):
the logic that leads you to the process of how
you got to that answer, you could apply that to
anything in life. So you built a team in this
era to Literally one of your skill sets is building
a great team. How do you think about finding talent
to work with you and what's your core concept of
a team. I've been hit or miss on building a
(31:26):
great team. To be fair, I've been really strong at
finding people believe in the values I ranked that really high,
really high versus your actual skills set. Even when building
Translation at the beginning, I couldn't get typical advertising guys
from Gray or any of the advertising companies B B,
(31:48):
d O because they didn't understand I was selling a
different product. When I started Carol's dought, I couldn't just
hire people from the current beauty business selling a different product.
But United Masters is we're building this convergence of culture,
technology and storytelling. With this combined companies of Translation united
mass together. So I gotta find different people. People that
(32:11):
understand ad tech, people that understand a hot song on
the street, and people who understand how to write a
sixty second commercial, and they have to work together. They
have to work together. So convergence of these skill sets
only come together if you find people who believe in
it and have empathy. But also in the midst of
all this, I built a beauty business called Carl's Daughter,
(32:33):
a woman from Brooklyn who built a business selling it
out of our house, yet nobody would invest in her.
And you had African American women going to Sapphora but
had nothing to buy. They wanted to go in the
store because it's Saphora, it's hot, but yet there's nothing
that speaks to them. It's not a shade of foundation
that speaks to them, and it's not a fucking hair
product that can deal with their hair type. Nothing. But
(32:56):
yet they walk in the store to buy lip gloss
or something because they want to be seen with us
a far back. That bag, that ship hurts me. Part
of what I do as a business guy is connected
with a story that feels like an uphill battle that,
with money, effort, and time will persevere. Like my favorite
movie is Rocky, So I try to find Rocky in
(33:18):
every single fucking story I can find where's the Rocky?
And once I can find it, whether it be Carol's daughter,
or the advertising business or now artists with United Masses,
I wake up in the morning fighting that fight. I
want everybody to see it as clear as I see it,
that we can win this fight. It's gonna turn because
(33:39):
it doesn't make any sense. And things that don't make
any sense have an expiration day. So obviously we hear
love audio. But not only is radio stronger than ever podcasting.
What you're doing right now is taking the world by storm.
Smart speakers are the new home radio. Spotify as the
new Tower records. We've made this migration from physical to
(34:01):
downloads to streaming music. How do advertise or thing to
adjust their approach to being in sync with the consumer, who,
by the way, loves and embeds audio in their life
and artist social media is the new MTV and Spotify.
Apple Music is the new Tower Records, and radio is
the new radio. Radio is always, you know, the companion.
(34:22):
We think of ourselves, not at the music. We're your friends.
Radio is always driven by the personalities that it created,
and create great personalities. You've got great radio. The truth
of the matter is I talked about this with retail.
In the beginning, you go in e commerce, you would see,
you know, a picture and then you know, you buy it,
and it was clunky, it didn't work, And all of
(34:43):
a sudden they started getting better, like zoom in, zoom
out turning that got modeled to the side turned it
to the left. Then uh Netaport they came out and
they put editorial, you don't have to all wear one thing.
It'd be you know, this topic from one brand, this
is from another brand, and it'd be some editorial about it.
And that became a better shopping experience. And then all
of a sudden it's stopped right there. That's it. It's optimized.
(35:09):
E commerce really hasn't moved from that. You go down
to all these store fronts and everybody's worried about what's
happening on e commerce. These windows nobody's doing anything, like
no innovation in the windows. And you have this physical location,
you got glass this big, with all this technology, Why
aren't you doing anything? Why isn't the glass and Instagram screen?
(35:32):
The same thing happened to radio. The advertising guys aren't
being creative with the format. Some of the work I've
done in radio. You well, one of the things I
did when Interscope launched, they wouldn't play dr Drains Dugan radio.
They would not play. So what Jimmy did was Steve Berman.
(35:53):
They went and bought the last commercial spot in a
pod and did not say anything but played sixty seconds
of the song nothing but a g Thing Baby. People
thought that was the song. They didn't know it was
a commercial, and that's how the song took off. I
went to Bill Wrigley Jr. And pitched him an idea.
(36:17):
We were gonna remake the double Mint jingle. We remade
the double Mint jingle. This is the best work done
in radio. I could played his ship for you, blow
your mind. I made the song call Forever Chris Brown
Forever and he says, wr pleasure do wr fund in
the song. We rewrote the double Mint jingle using that
same Forever melody, and then I did the exact same thing.
(36:39):
I brought sixty seconds, let it play like it was forever.
So when the song played, it all sounded like forever,
and then it changed into the double Mint jingle. The
song went number one, the song number one, and it
was a jingle that double Mint owned. Thinking about radio
and being colorful and artful with it and figuring out
(37:02):
how to tie the music in with the advertising in
a way that it feels entertaining but yet informative, so
you stay engaged. How do you make it all sound
like holy shit? I actually want to be engaged if
it doesn't pull you in, you don't care about it.
Before we end, I just want to hit music industry
really quickly. You have United Masters, whole new way of
(37:23):
thinking about artists. How does this fit into the future
of the music business. I think the future the music
business is artists going direct. It's a d i y world.
The amount of songs going up on Spotify and Apple
every single day keeps growing tremendously. They're not coming through
major labels, They're coming through different platforms that are given
these artists shot to be heard. And what United Masses.
(37:45):
What I wanted to do was do that at scale.
How do you bring some technology to make it easy.
We just launched the app on July fourth. It went
took off, went to number twenty nine and the app store.
Why there was a bunch of artists that said, how
can I get a and if you send me a
song on my eye Message, how can I get it
from my eye message to Spotify? What are the only
(38:06):
guys doing that right now? Your engineer sends you a
song and you go, man, this is ready to go.
Within thirty seconds, your songs up on Spotify. That's the
kind of innovation that I want to bring to the
music business for the d I y world. I think
there's a place for the legacy labels, but um I
think that they have never been big and speedy on innovation.
(38:28):
We're going to continue to push innovation forward and we
have hits. Labels are coming in paying seven million dollars
eight million dollars brand new artists just maintain market here.
So we're disrupting. And when I put that ad tech
on top of it, we're gonna really show them where
to make money. I think the record business needs to
become the media business. And if I can turn the
(38:50):
record business into the media business, then we're doing it.
So we always end this each episode with a salute
to the math and magic of marketing. If you think
about it, who's the eightist math person in the business
You've encountered Doug Morris from Sheer Creative. Who's the best magician?
Steve Stout, you were inducted into the Advertising Hall of Achievement.
(39:12):
You were at Age Executive of the Year in two
thousand and thirteen. Recently, Fast Company named you as one
of the most creative people in business. You're brilliant man.
Thanks for joining us. Thank you, Thank you. Here's a
few lessons I learned during my conversation with Steve. One,
if you really want to cut through the noise, stop
focusing on what separates us and instead figure out what
(39:36):
we have in common. In Steve's view, market segmentation is
an outdated and often misguided approach that puts people into
boxes that don't really reflect reality. To surround yourself with
people who share your values. In Steve's case, that meant
building a team who wanted to fight uphill battles, whereas
he put it, find the rocky in every single story. Three.
(39:57):
Steve believes music drives culture. If you want to see
where things are headed, people's listening habits are smart place
to start. I'm Bob Pittman. Thanks for listening. That's it
for today's episode. Thanks so much for listening to Math
and Magic, a production of I Heart Radio. This show
(40:18):
is hosted by Bob Pittman. Special thanks to Sue Schillinger
for booking and wrangling our wonderful talent, which is no
small feat Nikkiatore for pulling research bill plaques and Michael
Asar for their recording help, our editor Ryan Murdoch, and
of course Gayle Raoul, Eric Angel, Noel Mango, and everyone
who helped bring this show to your ears. Until next time,
You're listening to Math and Magic, a production of I
Heart Radio. I went to a Catholic school. There was
five black kids in the school. I was one of
the everybody's driving I Rocks and listening to Billy Idol.
They're all also listening to run DMC. They're also listening
to Best Boys, and they wanted him more. Music was
(00:25):
the thing that was clearly the connector. If you started
the conversation from what we have in common versus what
we have in different you'll actually be surprised at all
of the commonalities that you have and you can build
on top of that. That path was the path I
worked my whole career with. I'm Bob Pittman. Welcome the
(00:50):
Math and Magic stories from the Frontiers and Marketing. We
examine that very special mix of the analytics and insights
and marketing math, but that very full excitement, craziness and
sheer creativity magic and how those come together to create
legendary marketing ideas and businesses. Today we've got the perfect
example of someone who has had amazing insights plus the
(01:14):
creative talent to build new products and businesses from them.
Steve Stout. Steve was in the music businesses hip hop
was blowing up. He figured out how that could change movies, music,
and advertising, often combining them into one unified effort. He's
(01:34):
the CEO and founder of two well known companies, United
Masters that helps music artists retain control of music and translation,
a creative agency doing some of the most forward thinking
work and connecting big brands the culture and often the
influencers in music and sports as well. He grew up
in Queen's High school. Injury derailed the possible careers of
(01:56):
athlete and set him on another path. We want to
get into that path. But before we do that, let's
welcome Steven. I like that in yet, and we're going
to jump into you in sixty seconds. We're gonna ask
you some questions lightning round style. Don't think too long,
just say the first thing that comes to your mind.
So here we go. Do you prefer Manhattan or Queen's
(02:18):
Manhattan Chocolate or Vanilla Vanilla eminem or Dr Dre Dr Dre.
Yankees are Mets, Mets, Giants are Jets. I hate them both.
It's about to get harder. Secret talent seen around Corners
favorite city, New York. This is gonna be a really
tough one. Best live concert? Wow, what I haven't seen?
(02:40):
I would love to have seen Bob Molly play live,
and it's very hard to find anybody who's seen it.
Have you seen him Jamaica? I love Jamaica. I've never
seen him live. The best live concert I've ever been to.
Smartest person you know. The smartest person I know is
Ben Orwits. Hardest working celebrity you've managed. I can tell
(03:00):
you the hardest working celebrity I've worked with is Lebron James.
Worst bad or fashion trend you've participated in. Everybody was
wearing yellow pants, but it was a part of everybody
was doing it. Who would play you in a movie? NS?
Proudest achievement starting a family. What's one food you'd never eat?
(03:22):
I don't like any like it's a substance like a jelly, jellyfish,
jelly anything jelly. I'm I'm not touching that. Jelly's out. Okay,
Final one? Where was your last vacation? Last vacation was
in Paris? Okay, let's get started. Great quote from you.
Music moves culture. What do you mean by that? Culture
(03:46):
really is a set of rules in which a group
of people lived by and moved by music has always
been one of the greatest indicators of where the world
was moving to. If you listen to the lyrics, if
you listen to the subject matter, where the perspective of
the song is coming from, where the artist is coming
from themselves, he'll tell you a lot if you follow
(04:08):
that line. Most people don't follow that line. And when
I got into the marketing business, what I wanted to
do was use that line around music in the culture
that it was an indicator of, to remove models of segmentation.
When I got into the business, Bob, the thing that
was most appalling to me was eighteen to twenty four black, eighteen, white,
(04:31):
eighteen and twenty four hispanic. These things don't even mean anything.
There are fake segmentation media metrics that was created at
a time when I guess it mattered, but it really
didn't matter at the time when MTV came around, But
yet it was still a currency that was being traded upon,
and I think it made no sense. And I always
felt like music proved that model out, but everyone kept
(04:56):
on refuting it because it was a good business to
be in segmentation studies. So you obfuscate that and keep
going back to reach and general audience demographics. In the sixties,
before FM really took hold, a m would play everything
Otis writing and then you'd play at Karen Carpenters song
right after it didn't matter. And then FM when they
(05:18):
started splitting the signals, is when segmentation really became alive
on radio because you got a chance to make up
all these narrowcasting. Narrowcasting. Okay, there it is, and I
think that narrowcasting has done a lot to affect media's
perspective on how you look at people and how you
put people into boxes. One of the most craziest things
(05:38):
I've seen when I was in the record business. It
was the mid nineties and rap music started to take off.
The crazy thing was at the pop stations didn't play
rap music. They probably let one in the playlist. Then
they started letting two in, but they were much more
focused on Britney Spears and that stuff rather than the
rap music. But the local sponsors they wanted return and
(06:03):
they knew that the young people were listening to rap,
so they started this format called urban crossover. Urban It
was a category of stations that had range that could
play hip hop music and some pop records. Hot ninety
seven in New York was a churban station. Probably one
six in l A was a urban station. And these
(06:25):
were crossover urban stations. And when I seen that, I
was like, Wow, this industry is twisted. When did you
have this insight? I mean, it's clearly fuels what you're
doing fuel sud the fuels your marketing. Where did this
insight come from? Living with my eyes open? Man? I
grew up. I went to a Catholic school. There was
five black kids in the school. I was one of them.
(06:46):
I'm going to school and as much as everybody's driving
Irocks and listening to Billy Idol, they're all also listening
to Run DMC, They're also listening to Beastie Boys, and
they wanted him more. I didn't like Billy Idol's music.
I didn't cross over that way, but there were songs
that I got introduced to I did like I did
like the Bengals, like I definitely like the Banker's record, right.
(07:09):
So there were things that I started being introduced to,
and I'm like, once we remove these walls, we have
more in common than the world actually realizes. And I
think that's what led me to that insight, and really
that's what led me. That path was the path I
woke my whole career with understanding that if you started
the conversation from what we have in common versus what
(07:31):
we have in different you'll actually be surprised at all
of the commonalities that you have and you can build
on top of that. Once I started going into the
working world and started seeing people being separated, I didn't
understand that because that's not the way I was in school.
That's not was in my social life at school, that's
not how it was on my football team at school.
And music was the thing that was clearly the Connector
(07:54):
let's go back a little bit. Your mom was a
nurse with the Merchant Marine immigrants from triniday At, so
your first experience must have been understanding and navigating a
culture right there in Queens. Did that play a role
in this? I mean, well, yeah. When we first moved
to Queens, we lived right now Bellmont Race Track, and
we were one of the few black families on the block.
It was a block of fifty houses. I used to
(08:16):
count the houses really long. The neighborhood reverse the gentrified.
There was like only two white people left by the time,
the early eighties game, and it was a bunch of
Caribbean people like us, and they started living in that
area in Queen's Village. Things started to change when more
people from the Caribbean moved into the neighborhood. Let me
stay in your past a little bit. You were high
(08:38):
school football player, certainly had dreams of the pros than
you had. An injury changed all that, but one another path.
You attended a number of colleges and you joined this
very famous club of which I'm also a member of,
the college dropouts. Why did you leave college? I was bored, Bob.
There was nothing in it that made me feel I
didn't have the desire to be a good student. I
(08:58):
didn't care enough. I didn't even know what I was
gonna do, but I knew I couldn't do that. You
were a kid that shoveled, snow erected tensive flea markets,
delivered newspapers saying Christmas carols, everything every man, and then
at nineteen you were actually signing up people for mortgages.
You were in the real estate. That was in the
real estate businesses. So how do you make the jump
(09:20):
from the real estate business to the music business. How
did you get that idea? During that time, I had
met a girl. She was in the Army reserves, and
there was another guy in the Army reserves of her
who told about making dance records. And you can put
like two thousand dollars and cut a dance record. You
make like five ten pieces of final and you can
sell them at records and you can sell them to DJ's,
(09:42):
And there were these dance artists that were looking for
guys to do that. As an entrepreneur, you look under
every single rock. Anything could be an opportunity. You don't know,
you can't predict where the opportunity is going to come from.
So I took the meeting with the guy and he
happened to be the DJ of Kid and Play. I
didn't mean anything because I was actually doing good. I
had like forty two dollars in the bank. Yeah, and
(10:06):
you were how old nineteen. I didn't need anything from them.
So I was around them and I didn't need money
from them. I just wanted to be around and see
what they were doing. Fast forward, I became Kid and
Players road manager, and that's how I got into the
music business. So you go to r C A you
wind up as A and R director. Joe Galante? How
(10:27):
old were you? You were a kid. Joe Galante took
my phone call. You just called him, and I just
called Joe Galante. Joe Galante had come from Nashville to
New York. I knew Joe decades ago from country news.
That's crazy, and I didn't know who he was. Somebody said,
there's a guy named Joe Galante who's giving out deals.
I called Joe Galante up. He takes a meeting with
(10:50):
me and pays me four thousand dollars a month as
a consultant. I'm literally sitting on my mother's step, living
at home, getting fourth thousand dollars a month. I couldn't
even believe this. The check just kept coming coming. And
then he introduced me to the guy who ran ahead
of black music most segmentation, Skip Miller. Skip Miller was
(11:12):
a former motown guy. He came to run it, and
they turned me from a consultant into an employee, and
they hired me as an A and R executive. Converted
me so we're on segmentation. They shut down the Black
Music division. Why did they shut it down? Because the
record business didn't know anything. Capital shut down, the Black
(11:33):
music Department r c A shut down, the Black music Department.
Columbia had just got rid of Deaf Jam Michael Bolton
was still selling records. All the things that they knew
was still working. So you know, Bob, how it goes.
People get accustomed to the thing. They know they can
get fat off of that. Why are you gonna worry
about tomorrow? They could just keep eating off for yesterday.
They don't even know who these guys look like. What
(11:55):
did they They were wearing yellow pants. They didn't want
those guys around down and they really got rid of it.
They didn't know the difference been good and great. And
I remember the day I was trying to get this
one producer the songs to do a remix for and
he kept them blowing off the meeting. This guy's meeting
me at ten am. Meet skipped Miller at eleven am.
The guy supposed to meet at ten am does not
(12:17):
show up till eleven He walked in my office. He's
on the phone. He had just got into some trouble
with his girlfriend and he's like gosh, hushing me and
I'm like, look, I'll come back. They're shutting down the
black music department. Kip Mill fires me. So when I
come back in my office, this guy is sitting there,
there's no remix to give him. I said, I just
(12:38):
got fired. He goes, well, my girlfriend just broke up
with me. I said, well, what are you gonna do?
He goes, why don't you manage me? And I managed
him and we went on a run. The track Masses
we produced, I Ruled the world that whole, first NAS
album discovered, Foxy Brown made Hello, Cool Jay's Big Jobum
(12:58):
marriage he Blige album. We went on a run for
like five years, Candy Rain for Soul for Real. We
went on a run making records and that ended up
becoming my my thing, managing producers. I literally got five
went back to the office, and my career was sitting
in the room. Your future was there sitting in the room.
(13:19):
So how did you rejoin a major record company? What
was that appeal? You go back to Sony Senior VP
of A and R President of Urban Music. Well, what
happened was NAS takes off. The guys at Columbia know
nothing about black music. They could sit around and they
act like they have great ads by closing their eyes
and you know when the song plays, like as if
(13:41):
they're doing something. You've met guys who do that. They
they closed their eyes. They're like, oh my god, you're
not climb Davis. Just don't close your eyes. So they're
sitting there closing their eyes and ship, we want you
to come on and do this at Columbia, and I'm
like nah. They offered me some money and I remember
(14:01):
looking at the guy's face like, Yo, you crazy. I'm
not doing that. And then Mariah wanted to work with
the producer's Mariah Carry And Mariah was really running black
music at Columbia. She knew everything. She could close her
eyes because she knew exactly what the fun she was
listening to. She said, I want to work with those
talented guys, and because I managed them, Matola wanted to
(14:23):
sit down with me. Her husband Tommy, he was the
CEO Sony at the time. And when I sat down
with Tommy, he was looking at the guy who ran
Epic and the guy who ran Columbia and said, they
don't know what the funk they're doing. Those guys are
trying to work Freddie Jackson. No disrespect to Freddie Jackson,
but R and B music was sort of on its
way out, and he needed the next guy, and he
(14:45):
gave me a job overseeing both of his things. Meanwhile,
these guys are older guys, and they're like they weren't
mentors of mine. But I certainly felt weird acting like
that I was their boss. But they certainly couldn't sign
anything and make any real decisions unless I got a
chance to see whether they knew it or didn't know it.
How old were you? Then this must have been wildly
(15:05):
heavy stuff. It gets wilder. Okay, let's give it to me.
Let's get wilder. So I started doing that worker at Mariah.
It's fantastic, she takes off. I'm gonna give Mariah Carey
credit right here. Nobody wanted old dirty Bassett on the
Fantasy remix at Sonny. They didn't even understand that that
was Mariah Carrie's decision, and she put everything on the
(15:28):
line to make that call. She had everything to lose.
She didn't need that audience. She didn't need a rap audience.
People do it now because they need it. Madonna does
a song with the guy from Ray Shermerd because she
needs that. When Mariah Carrey was doing that, she didn't
need that ship at all. She was doing it because
she knew that ship was fresh. She put that format
(15:48):
in play, and she risked it all. Her husband didn't
want it, her label head didn't want it. She did that.
She brought black music to Columbia and a lot of
people came there because they wanted to be around that
orbit that she had. For sure. I sat there, I
did it for a while. Everything was cool for a minute,
and then Jimmy Ivan came and he wanted me. How
(16:11):
did Jimmy know about you? What was your relationship? Okay,
so here goes that one. There's a guy named John McClain,
very famous at Ain't M Records. He was at Interscope
early when they started it. He also made Janet Jackson's
albums when she was at Ain't M. He Hi, Jimmy,
Jim Terry Loose. I don't know who your audience is listening,
but they're gonna get full musicology. That's what we want.
John brings me out to meet with him because he
(16:34):
wants opproducers to produce records for Interscope. I go out
there to three days go by No John McClaine, and
they have me stay at the Lowe's in Santa Monica.
Day one, it's like, okay, cool mangan on the three
day free hotel or whatever. Day three, it's like, what
the funk is this? John's assistant calls Jimmy and says,
(16:55):
to Jimmy, John has some guys sitting in a hotel
for three days. So I go sit down with Jimmy
and we started talking about music. Within a week, Jimmy,
it offers me John John. That's how it happened. That's
how it happened. No regrets leaving Sony. No. When I
listened to this. So I had one year left on
my Sony deal, and Jimmy signs me a year out.
(17:18):
The first year is a consultant, but I'm already signed
for the next four years beyond that consultant. It's like
the NETS deal with Kevin Durant. They know the year out,
but they got the next three years. So my year out,
I met Sony knowing I'm going right to interscope. I
do one or two things that interscope. One of the
things I had to do was relocate the New York office,
(17:38):
so I put their office right near Sony, so I'd
run back and forth between Sony and Interscope Sony to know.
Sony had no idea. I would run from street to
fifty seven Street for meetings that first year all the
(17:58):
time because I was setting up my entire office over that.
It is crazy, I was, you show up at dinner Scope,
You've got amazing artist d MX and ri Ku Dr Dre.
When I got to Interscope, my job was to get
rid of all the things that wasn't working. So tell
(18:19):
me what wasn't working. Dr Dre and death Row had
broken up, so Dr Dre was building Aftermath. He hadn't
yet signed Himinem and the first project he did was
a project that I put together called The Firm. It's
old a million records. It should have been bigger because
it was a supergroup, but it definitely gave him his start,
and he's always been grateful with me. But sure, what
(18:43):
was your vision for it? I didn't really have a
vision for it. That would be unfair for me to
say that. I just knew that. Being around Jimmy, I
learned a lot. But the thing I brought that that
was important was he wouldn't want what was happening in
New York. So I brought over a group, the Rough Riders,
and that brought a Swiss and a bunch of artists
that was important at that time, and that was a
(19:05):
big deal for us. That was a big deal that
mattered a lot. And then I went with Jimmy to
go sign Enrique Iglesias. Ricky Martin had just taken off
and we wanted to get into the Latin game, and
Enrique had just got out of his deal and Edgar
Brafman owned Universal at the time, and he really wanted
that artist. Basically said we want to pay forty million
(19:26):
dollars for it was like that kind of money. And
I remember I was the guy running around trying to
entertain him better than everybody else. I brought him out
to the things, you know, took him to different places
or whatever. Anyhow, we ended up signing them. The first
record we broke was actually on the Wild Wild West soundtrack,
was a song called Bala Moss. So let's go to movies.
You get in the movies about this time, Wild Wild West,
(19:49):
Men Black? Yes, I did Men in Black at Sony.
And what happened was I just knew that back then
movie soundtracks had big recording budgets because they would part
of the p and A. They basically put two or
three million dollars towards marketing the movie, towards the soundtrack.
So if you were the record company who got that soundtrack,
you would essentially get marketing money from the movie company
(20:12):
that was unrecoupable. So it was great marketing. And back
then people would buy ship. I mean people put the
dows and creeks out. I mean I had a big
hit on it. People would buy anything, so men in
black sold and I was in the Will Smith business.
So when I went to Interscope, I said, let's do
Wah wah west over in the Scope. And the first
song we did was Bollamos and it was huge, huge,
(20:34):
And then right after that was will Smith wa while
West and they both came out around the same time.
And that was another big mark in my career because
I did it and I got credit for doing it.
Just hold on a second, because we've got so much
more to talk about. We'll be back after a quick break.
Welcome back to Math and Magic. We're here with Steve Stout.
(20:58):
You had this incredible career in music at sort of
this moment that music was going through a major change.
You were one of the leaders of that change, and
then you jumped advertising. You start this agency with Peter Arnell,
legendary person. What did you think advertising needed that you
had the record business didn't know that difference been good
(21:21):
and greet at that time. There were guys who I
felt that weren't my equivalent and talent making the same
amount of money I was making. That didn't bother me
so much, but it made me feel like I actually
went through depression. I think, because I'm like, what is this?
If this is about paying some black executive who can
speak to guys on the street and speak to the
(21:42):
white guys that corporate and gather as much hip hop,
ACTX and R and b X as possible and everybody
gets paid two million dollars to do that, then I
don't want to do that. And that's just how I am.
I learned that from my dad. The principles didn't add
up to me, and it was all about the principle
was too many dolls a lot of money, but I
couldn't make it make sense. So why advertising? Because after
(22:04):
Will Smith put out Men in Black and sold all
those albums and ultimately sold all those glasses, and it
was the guy who did the product placement for Ray
Band with the glasses. So I met somebody who said,
that's good that you're making money selling the music, but
you can actually be entrepreneurial and sell the things around
the music. Who are your clients? Have? Pass was one
(22:25):
I did, reboking McDonald's. So my big thing was I'm
loving it for McDonald's and rebok the jay Z sneaker,
the fifty cents sneaker, the Farrell sneaker, and how do
you converge hip hop and sport and put that together?
So you guys sold pass Omnicom two million or so
was supported number. Why did you sell it? I mean,
(22:47):
you guys were on fire. I was thirty two years old.
I made a bowload of money. Maybe that's the reason
I didn't have to worry about money again for the
rest of my life. That was how I thought about it.
So you jumped into advertising. You have this immediate success,
You monetize it very quickly, putting inside the money and
(23:07):
the interesting stuff. Why did you learn about advertising on
this first foray into it? The Emperor was but as
naked that all these guys running around didn't know ship
about anything. I'd listened to you see TV commercials that
had fake rap music in the background and casting was
really bad, like four white guys and one ambiguous black guy.
(23:30):
It was supposed to be friends. And I was sitting
there there going this is all wrong. This stuff isn't
really good, But nobody that can make it good has
a seat at the table. Why didn't they have a
seat at the table? Segmentation There was an older generation
of African Americans that were doing African American creative agencies.
(23:51):
They were incentivized to do stereotypical African American work, so
it'd be like a car driving get the New christ
Love blah blah blaw. You could hang with your homies
some stupid ass ship that's not real, and they would
do that because that's what the companies would buy, because
that's what they thought was what African Americans wanted. And
(24:14):
I'm like, that's not it. I'm gonna take everything I
learned from the music business and bring it to advertising.
And that's why I called the company Translation, because I
was gonna translate the values of what I've seen in
culture the fortune companies. How did you build the agency?
You're really starting this when that's this is me and
(24:35):
a desk and two assistance in an office at a
fish tank. When I left Universal, Jimmy and Doug Morris,
they took a percentage of the business. It was a
small percentage, and they gave me, I think, like two
years of I could stay in there and do it.
So I had this tank, two desks to assistance, and
(24:56):
me and I went and got busy. My first early
clients was Hewlett Packard, which was fantastic. How did you
get Hewlett Packard? This is an unlikely company you would expect.
McDonald's came to me first because McDonald's I'm loving it.
I did at Arnell Group. So when I left, McDonald's
said we're retaining you immediately. Don't worry about it. You're good.
Inter Scope was a lead generator for me. That's how
(25:19):
I used them. I used them as a lead generator,
so if I need any production done, I'd use them.
But like if somebody called them and said could we
put blah blah blah in an ad, they'd say you
should look at this company translation and that Jimmy would
do that, or Jimmy's company would do that. Steve Burman,
So they called Calie Fierina wanted to do something with
(25:41):
music and it was cool. They let me into the meeting.
They had just did a deal. Steve Jobs did one
of his Steve Jobs like deals to them. HP made
their own version of the iPod, which looked exactly like
the iPod. He just basically got them to distribute the iPod.
He got a little logo that was really small somewhere
in the back. They couldn't do anything so that you'd
(26:04):
go buy it. With Steve Jobs when it was the iPod,
they have distribution, and he didn't want to build a
distribution team, so he used HPS distribution to give them
the HP version of the iPod. They may have made
a dollar margin on it, but it was then being
cool and he got distribution in Circuit City and Best
Buy and everything because HP had the sales team. So
(26:27):
I said, we call it for your Ina and her
ade agency at the time, and I said call it
when you unveil this, What are you gonna unvail? Everybody's
selling them ads. No one thought about the core problem
and said what we're gonna do. We're gonna use your
printing business and we're gonna make customizable tattoos so that
people can customize their iPods. We're gonna go back to
interscope and we're gonna get all of the artists on
(26:49):
Interscope to give us their image and likeness so that
we can actually make these tattoos. So HP did the
iPod deal, not to sell iPods, but to sell printing
ink and these sheets. One of my best ideas didn't
catch fire, but it caught fire enough to put me
on a fast track to help being Gorow my company.
And by the way, it was one of those things
(27:10):
that you know, it came like this. I looked at it.
I'm like, nobody has an answer. But if you take
this thing back to printing, which is where they made
their profits, they did this lost leader deal in order
to go back, but no one had that idea and
what to print. I went to deals with the n
b A Major League Baseball in his scope. I still
have this stuff and it won like Time magazine idea,
(27:32):
you know, one of top ten ideas, these printable skins.
They called them skins. It was two thousand four five.
So you've done this remarkable job. You launched Translation now
your own agency. Two thousand eleven, you release a book,
The Tanning of America, How hip hop created a culture
that rewrote the rules of the new Economy two thousand
(27:53):
foh one makes a four part documentary out of it,
The Tanning of America, One Nation under hip Hop? What
was the big insight here? Is this about segmentation or
is this about beyond? What happened was the world started
to see it at this time. There was this day
when they would look at a black kid wearing tight
jeans and a skateboard and he was looked at like
(28:13):
he was a sellout. He's listening to rock music, forget it.
And there was his white kid and greenwage. I just
think a Tommy, He'll figure his son where in his
hat backwards, a Yankee hat backwards, baggy pants, and people
would call him a wigger, terrible words, and I'm like,
they're not that, you idiot. They grew up listening to
(28:36):
hip hop music. They grew up with these worlds collided.
Fred Durst is not a wigger. Fred Durst grew up
listening to Run DMC. Were you talking about You guys
are wrong. You guys don't know what you're talking about.
You're sitting back growing up with a Bruce and Bob
Dylan and a lot judging these kids. These kids grew
up listening to different music, music drives cultures. My point,
(28:58):
they're sitting there saying only things about these kids, and
I wanted to write a book that not only stopped
them from shaming it, but I wanted to put a
flag in the ground that the world has changed, and
that segmentation is over. The cover of a book is
the Census Bureau form, and every box is checked. One
of the greatest things I learned on that journey of
(29:20):
writing that book and doing the documentary was I actually
went to the U. S. Census Bureau and I got
a meeting with a guy who ran it. His name
is Steve Jos and I walk in. I'm like, Steve,
I'm writing a book called at Taining of America and
just that in the third and he's he's like a
forty five year old white guy at time says, I
(29:40):
know everything you're talking about. I said, why, he goes,
My daughter is twenty seven years old getting married next
week to an African American. I can tell you everything
about this. We sat down and we became great, great friends.
The U. S. Census Bureau wants this information to be shared,
so Steve with go with me to go visit clients,
(30:02):
and the government would pay for it. And I do
my spiel to a client about my company and translation
and changing demography, and then I'd break out the guy
who runs a census bureau to back me up. And
the government was paying for this. They didn't take a
piece of your business, did they. No, they didn't take
(30:22):
piece of my business. I mean he pitched butter Wiser,
he pitched state Farm. State Farm changed how they were
zoning rentals. They had it all wrong. That's amazing. And
this was really early in this data science. Nobody called
it anything. It was called obvious. When we talk about
math and magic, one of the hot things today is
(30:44):
had him recognized. Recognition has always been at the key
of you. I don't even know how people don't have that.
It's the first thing I see. I can't even not
see that. So in spite of you being a creative guy,
you're also a bath mind. Until my daughter of time.
Math is life. If you understand math, and you understand
(31:04):
the logic that leads you to the process of how
you got to that answer, you could apply that to
anything in life. So you built a team in this
era to Literally one of your skill sets is building
a great team. How do you think about finding talent
to work with you and what's your core concept of
a team. I've been hit or miss on building a
(31:26):
great team. To be fair, I've been really strong at
finding people believe in the values I ranked that really high,
really high versus your actual skills set. Even when building
Translation at the beginning, I couldn't get typical advertising guys
from Gray or any of the advertising companies B B,
(31:48):
d O because they didn't understand I was selling a
different product. When I started Carol's dought, I couldn't just
hire people from the current beauty business selling a different product.
But United Masters is we're building this convergence of culture,
technology and storytelling. With this combined companies of Translation united
mass together. So I gotta find different people. People that
(32:11):
understand ad tech, people that understand a hot song on
the street, and people who understand how to write a
sixty second commercial, and they have to work together. They
have to work together. So convergence of these skill sets
only come together if you find people who believe in
it and have empathy. But also in the midst of
all this, I built a beauty business called Carl's Daughter,
(32:33):
a woman from Brooklyn who built a business selling it
out of our house, yet nobody would invest in her.
And you had African American women going to Sapphora but
had nothing to buy. They wanted to go in the
store because it's Saphora, it's hot, but yet there's nothing
that speaks to them. It's not a shade of foundation
that speaks to them, and it's not a fucking hair
product that can deal with their hair type. Nothing. But
(32:56):
yet they walk in the store to buy lip gloss
or something because they want to be seen with us
a far back. That bag, that ship hurts me. Part
of what I do as a business guy is connected
with a story that feels like an uphill battle that,
with money, effort, and time will persevere. Like my favorite
movie is Rocky, So I try to find Rocky in
(33:18):
every single fucking story I can find where's the Rocky?
And once I can find it, whether it be Carol's daughter,
or the advertising business or now artists with United Masses,
I wake up in the morning fighting that fight. I
want everybody to see it as clear as I see it,
that we can win this fight. It's gonna turn because
(33:39):
it doesn't make any sense. And things that don't make
any sense have an expiration day. So obviously we hear
love audio. But not only is radio stronger than ever podcasting.
What you're doing right now is taking the world by storm.
Smart speakers are the new home radio. Spotify as the
new Tower records. We've made this migration from physical to
(34:01):
downloads to streaming music. How do advertise or thing to
adjust their approach to being in sync with the consumer, who,
by the way, loves and embeds audio in their life
and artist social media is the new MTV and Spotify.
Apple Music is the new Tower Records, and radio is
the new radio. Radio is always, you know, the companion.
(34:22):
We think of ourselves, not at the music. We're your friends.
Radio is always driven by the personalities that it created,
and create great personalities. You've got great radio. The truth
of the matter is I talked about this with retail.
In the beginning, you go in e commerce, you would see,
you know, a picture and then you know, you buy it,
and it was clunky, it didn't work, And all of
(34:43):
a sudden they started getting better, like zoom in, zoom
out turning that got modeled to the side turned it
to the left. Then uh Netaport they came out and
they put editorial, you don't have to all wear one thing.
It'd be you know, this topic from one brand, this
is from another brand, and it'd be some editorial about it.
And that became a better shopping experience. And then all
of a sudden it's stopped right there. That's it. It's optimized.
(35:09):
E commerce really hasn't moved from that. You go down
to all these store fronts and everybody's worried about what's
happening on e commerce. These windows nobody's doing anything, like
no innovation in the windows. And you have this physical location,
you got glass this big, with all this technology, Why
aren't you doing anything? Why isn't the glass and Instagram screen?
(35:32):
The same thing happened to radio. The advertising guys aren't
being creative with the format. Some of the work I've
done in radio. You well, one of the things I
did when Interscope launched, they wouldn't play dr Drains Dugan radio.
They would not play. So what Jimmy did was Steve Berman.
(35:53):
They went and bought the last commercial spot in a
pod and did not say anything but played sixty seconds
of the song nothing but a g Thing Baby. People
thought that was the song. They didn't know it was
a commercial, and that's how the song took off. I
went to Bill Wrigley Jr. And pitched him an idea.
(36:17):
We were gonna remake the double Mint jingle. We remade
the double Mint jingle. This is the best work done
in radio. I could played his ship for you, blow
your mind. I made the song call Forever Chris Brown
Forever and he says, wr pleasure do wr fund in
the song. We rewrote the double Mint jingle using that
same Forever melody, and then I did the exact same thing.
(36:39):
I brought sixty seconds, let it play like it was forever.
So when the song played, it all sounded like forever,
and then it changed into the double Mint jingle. The
song went number one, the song number one, and it
was a jingle that double Mint owned. Thinking about radio
and being colorful and artful with it and figuring out
(37:02):
how to tie the music in with the advertising in
a way that it feels entertaining but yet informative, so
you stay engaged. How do you make it all sound
like holy shit? I actually want to be engaged if
it doesn't pull you in, you don't care about it.
Before we end, I just want to hit music industry
really quickly. You have United Masters, whole new way of
(37:23):
thinking about artists. How does this fit into the future
of the music business. I think the future the music
business is artists going direct. It's a d i y world.
The amount of songs going up on Spotify and Apple
every single day keeps growing tremendously. They're not coming through
major labels, They're coming through different platforms that are given
these artists shot to be heard. And what United Masses.
(37:45):
What I wanted to do was do that at scale.
How do you bring some technology to make it easy.
We just launched the app on July fourth. It went
took off, went to number twenty nine and the app store.
Why there was a bunch of artists that said, how
can I get a and if you send me a
song on my eye Message, how can I get it
from my eye message to Spotify? What are the only
(38:06):
guys doing that right now? Your engineer sends you a
song and you go, man, this is ready to go.
Within thirty seconds, your songs up on Spotify. That's the
kind of innovation that I want to bring to the
music business for the d I y world. I think
there's a place for the legacy labels, but um I
think that they have never been big and speedy on innovation.
(38:28):
We're going to continue to push innovation forward and we
have hits. Labels are coming in paying seven million dollars
eight million dollars brand new artists just maintain market here.
So we're disrupting. And when I put that ad tech
on top of it, we're gonna really show them where
to make money. I think the record business needs to
become the media business. And if I can turn the
(38:50):
record business into the media business, then we're doing it.
So we always end this each episode with a salute
to the math and magic of marketing. If you think
about it, who's the eightist math person in the business
You've encountered Doug Morris from Sheer Creative. Who's the best magician?
Steve Stout, you were inducted into the Advertising Hall of Achievement.
(39:12):
You were at Age Executive of the Year in two
thousand and thirteen. Recently, Fast Company named you as one
of the most creative people in business. You're brilliant man.
Thanks for joining us. Thank you, Thank you. Here's a
few lessons I learned during my conversation with Steve. One,
if you really want to cut through the noise, stop
focusing on what separates us and instead figure out what
(39:36):
we have in common. In Steve's view, market segmentation is
an outdated and often misguided approach that puts people into
boxes that don't really reflect reality. To surround yourself with
people who share your values. In Steve's case, that meant
building a team who wanted to fight uphill battles, whereas
he put it, find the rocky in every single story. Three.
(39:57):
Steve believes music drives culture. If you want to see
where things are headed, people's listening habits are smart place
to start. I'm Bob Pittman. Thanks for listening. That's it
for today's episode. Thanks so much for listening to Math
and Magic, a production of I Heart Radio. This show
(40:18):
is hosted by Bob Pittman. Special thanks to Sue Schillinger
for booking and wrangling our wonderful talent, which is no
small feat Nikkiatore for pulling research bill plaques and Michael
Asar for their recording help, our editor Ryan Murdoch, and
of course Gayle Raoul, Eric Angel, Noel Mango, and everyone
who helped bring this show to your ears. Until next time,
Host
Bob Pittman
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