Video After The Jump
50 Cent's SMS Audio business is building a brand with staying power. From it's previously announced deals with LucasFilms, Intel and Walt Disney Parks and Resorts, to just announced partnerships with Marvel and Reebok, the company is swinging for the fences and hitting homers like Willie Mays.
In a new interview with Fortune, the business mogul and SMS Audio President, Brian Nohe, discuss their unique strategy for expansion into areas other companies haven't explored
How does the rapper 50 Cent describe his headphone company SMS Audio?
“It’s cool, because I’m cool, so that makes the whole thing cool.”
That may not sound like the most refined summation of a business. But the artist, whose legal name is Curtis Jackson, has succeeded in other businesses before, from VitaminWater (he made a reported $100 million when the company sold to Coca-Cola) to his G-Unit record label and clothing line (which also had a Reebok shoe deal). While many have jumped into the headphone space—with its storied low costs and high margins—and failed, SMS Audio (it stands for Studio Master Sound) is still here, after four years. How?
Brian Nohe, president of the company (Jackson is founder and CEO), thinks the key is brand partnerships. He uses Beats By Dre—certainly the better-known rapper-founded headphone brand—as a contrasting example. Beats has mainly used television ads, with artists and athletes, as its marketing vehicle. SMS has avoided that so far and focused on corporate partnerships.
“It is a little saturated when they’ve stuck a headphone on every single person in the world,” Nohe said. “You can only plow that ground so much. We’ve taken a different tack, which is association with brands, and co-branding. We believe those relationships, in a corporate sense, are just as good a strategy.”
SMS has existing partnerships with Walt Disney Parks and Resorts (it is the only headphone brand available at Disney World and Disneyland) and with Lucasfilm’s Star Wars. It also has a relationship with Intel, which Nohe says “is spending an enormous amount of money globally on our biotech product.” And now, Fortune has learned exclusively, SMS has cut two more partnerships, with Reebok and Marvel.
While the former makes sense, since headphone marketing is so tied to fitness and sports, the latter may be a surprise. But Nohe and Jackson say it’s about brands that have staying power—whether that’s a tech company, shoe maker, or comics giant. “Those brands don’t go anywhere,” said Jackson. “They’re not going away.”
The Marvel-branded SMS headphones will be at a lower price point, around $99. And SMS says it will keep the Marvel branding subtle. “It won’t look toy-like,” said Nohe. “All that stuff we do, it’s classy. Like on The Avengers headphones, it won’t be a picture of Thor running around. It will be a little symbol, and have the same colorways.” The Reebok-branded headphones, meanwhile, will complement that company’s recent pivot toward a “fit-gen” (fitness generation) image, and be sold at some Reebok store locations and online.
Jackson says he has learned a lot about design. He discovered, from Apple as well as from the “FunToyzCollector” YouTube videos where a woman opens up children’s products (to the delight of Jackson’s little boy), that the act of unboxing is as important as the product within. This is why a package of the SMS Audio on-ear sport headphones contains a lot more than just headphones. It also has a zip-up case; two washable covers for each side; detachable cable with a built-on controller; SMS Audio stickers; and a small sport towel. He has also made sure the product is durable. (In a demonstration at the Fortuneoffices, Nohe grabs a pair and twists it violently, showing that it doesn’t break. “This is why we say it’s better quality, better sound, better value,” he said.)
Head over to Fortune to read the full article
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