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When I heard that Sony Music was paying $250 million to the estate of Michael Jackson for the rights to his past music and 10 projects to be released over the next 7 years, my first thought was that they are completely nuts.  I mean, they just signed a dead artist who hasn’t had a legitimate hit song since 1995 to the biggest record deal in history!  He was nearly bankrupt prior to his death and his last album struggled to reach the break even point.  What were they thinking?!?

But when you stop and think about,  there are two reason that Sony might actually be quite shrewd paying this much for Jackson’s music past and future.

1. It is no longer about CD’s and downloads.  It is about movie soundtracks, TV shows, commercials, computer games, and platforms we haven’t even considered yet.  In the old world of CD sales this deal would be nuts, but maybe not so much anymore.

2. Michael Jackson is now a rarity.  Like Elvis Presley, The Beatles, and Bob Marley, we sadly won’t be blessed with any new music from him.  That makes his brand infinitely more valuable.  In death, Elvis made $55 million last year.  John Lennon’s estate claimed over $15 million in 2009.  Bob Marley’s estate still earns close to $10 million annually… that’s $892,500,000 in Jamaican dollars.

Michael was already far more wealthy in death than he was in life.  His estate earned $90 million in the seven months following his death.  And the years to come with obviously be much more profitable.

What can your business learn from this morbid story?

1. The law of supply and demand is impossible to refute.  If demand is high and supply is low, the value goes sky high.  Examples?  Nintendo’s Wii machine was impossible to find two years ago at Christmas.  The supply was low, but everybody wanted one.  That’s why they fetched over $1000 on e-bay.  Michael Jackson is in demand (because he’s dead) and he’s in low supply (also thanks to death), so once again his value is very high.   How does your brand control supply and demand?  Remember that “supply” could easily be “exposure”.  Are you controlling your brand from overexposure?

2. If you have something cool (like, say, unreleased Michael Jackson material) it pays off to tell people that it is coming.  Create some advance interest.  By telling us that there are 10 Michael Jackson projects coming in the next 7 years, Sony has teased us with what could come.  Rumor is that there are three albums worth of new and unreleased MJ material in the vaults.  Another rumor is that Michael was planning to re-release a new version of  “Off The Wall”.   Apple has done this brilliantly… things like the iPad were the topic of much discussion and anticipation long before they came out.  What does your brand do to generate interest in what you are about to do?

Now Sony couldbe crazy.  But if Elvis Presley is any example, Michael Jackson’s music will endure for years to come in any number of forms and platforms, and Sony will more than recoup their $250 million.

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