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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowHHGregg Inc. is turning to John, Paul, George and Ringo to help it sell TVs, dishwashers and dryers.
The Indianapolis-based retailer launched its first national advertising campaign last month using the tagline “We Help” and the Beatles song “Help!” as its soundtrack. The Fab Four’s tune is designed to drive home HHGregg’s marketing claim that its career salespeople are more knowledgeable and helpful than the lower-paid staffs at such competitors as Best Buy.
HHGregg isn’t saying what it’s spending on the specific campaign, but it spent $87 million in its most recent fiscal year to hawk its electronics and appliances.
HHGregg spokeswoman Sari Martin also declined to disclose how much the company spent to license rights to “Help!” from Sony/ATV Music Publishing.
Andy Reismeyer, director of music licensing for Indianapolis-based CMG Worldwide, estimated HHGregg would have paid $500,000 to $1 million for the rights to use “Help!” as the centerpiece of its campaign.
And it could have paid several times more if it had elected to use the actual Beatles recording of the 1965 tune. Instead, HHGregg’s advertising agency, Florida-based Zimmer Advertising, a division of Omnicom, hired a music production company to make the recording used in the commercials.
“It’s a pretty big deal,” said Reismeyer, who works out of CMG’s office in Los Angeles, brokering licensing deals for the songs of CMG’s clients. “I mean, who’s bigger than the Beatles?”
He said an iconic song like “Help!” can grab consumers’ attention—which is especially important for a retailer selling fairly emotionless products like appliances.
“That’s just so valuable, especially when you’re selling dishwashers or dryers,” Reismeyer said. “It’s not like you’re selling a car and you can rely on the sex appeal of the car. Or a fragrance.”
Help! was the first Beatles song licensed for use in an advertisement. In 1985, Ford Motor Co. paid a reported $100,000 for the rights to make a new recording of it for a Lincoln-Mercury campaign.
Two years later, Nike Corp. paid $500,000 to use the original Beatles recording of “Revolution” in an ad campaign. The Nike ads led then-remaining group members Paul McCartney, George Harrison and Ringo Starr to file a lawsuit, which ended in a settlement.
The original Beatles members still receive royalties on all songs they wrote. But the publishing rights to the songs, which typically claim about 50 percent of all royalties, were placed into a corporate entity, and the Beatles members eventually lost control of those rights.
The publishing rights to the Beatles’ songs were purchased by the late Michael Jackson in 1985 as part of a 4,000-song catalog. He later sold a 50-percent interest in the catalog to Japan-based Sony.
At the time of Jackson’s death in 2009, his half of the Sony/ATV catalog that includes the Beatles tunes was valued at $1 billion, according to Bloomberg News.
“I don’t think Sony/ATV has any trouble licensing these songs, although they don’t do it very often,” Reismeyer said.
HHGregg’s current ads will run until the end of the year, according to Martin, on television, in print, online, on social media, and through direct mail and e-mail. They are running in all 15 states where HHGregg’s 173 stores are located. Also, the ads will appear in Pittsburgh, Miami and Chicago, new markets HHGregg will enter later this year.
The company’s sales last year rose 35 percent, to more than $2 billion, thanks to rapid expansion. Profit rose 22 percent, to $48.2 million.
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