Music & Musicians

Beyonce Inc: Controversy, yet barrels full of dollars

Getty Images

With chart-topping hits, endorsements and accolades galore under her belt, megastar Beyonce Knowles could perhaps be mistaken for David Ogilvy, the advertising mastermind whose marketing prowess became a Midas touch for countless brands.

Affectionately referred to as "Queen Bey" by the hordes of fans known as the BeyHive — who are so ardent in their defense of Beyonce that it once spawned a hugely popular skit on "Saturday Night Live" — the multiplatinum selling singer has become a brand of her own.

That imprimatur has helped Beyonce reap millions in music sales, as well as lend a boost to other products. The NPD Group, a retail trade organization, recently found that Beyonce was second only to pop star Rihanna in her ability to translate her name into sales for big brands.

The singer "knows she can rely on her loyal following to spread natural word of mouth. Only Lady Gaga's 'Little Monsters' rival the BeyHive for their power to generate natural word of mouth that is more effective than a marketing campaign," David Deal, CEO of David J. Deal Consulting told CNBC in a recent interview.

Read MoreRed Lobster feels the power of Beyonce

Her business influence is felt in cosmetics, clothing and music. Just last month, a single mention of Red Lobster in her controversial new song, "Formation," boosted the American chain restaurant's sales dramatically over Super Bowl Weekend. Beyonce is also a spokesmodel for L'Oreal, which in 2015 had more than 24 billion euros ($27 billion) of cosmetic sales. The French cosmetics giant reportedly pays Beyonce a contract worth nearly $5 million for her services, according to reports, and she is currently under a multiyear agreement with Pepsi worth $50 million.

Red Lobster

Marketing experts say that a big part of Beyonce's success is a marketing ace up her sleeve that few other artists can deploy to similar effect: The fierce allegiance of the BeyHive. Her fan base's aggressive loyalty to the star has helped redefine word-of-mouth in the age of digital media.

"Other artists do a better job at using social media to engage fans, but Beyonce creates a moment that attracts fans to her," said Deal. "The essence of the Beyonce brand is empowerment; I think that's why she's so popular, because fans feel like she empowers them."

Selling albums, singles in the blink of an eye

Taylor Swift performing
The swift rise of Taylor Inc.
Fuller House, a Netflix Original is picked up for a season 2
Netflix renews 'Fuller House' for second season

By most accounts, Beyonce's business and musical exploits have made her a very wealthy woman. According to Forbes, her net worth is somewhere north of $250 million, and when combined with that of her husband — rapper and entrepreneur Sean "Jay-Z" Carter — music's power couple is worth a combined $1 billion, Forbes says.

A big part of her earnings power comes from an uncanny ability to sell music and tour seats at a time when digital downloading and piracy have posed a challenge to the profitability of record companies worldwide. At a time when female solo artists are dominating Billboard's charts, Beyonce has pulled in 20 Grammy Awards. In 2013, a self-titled album that was released in the dead of night — with no marketing or advance warning — immediately skyrocketed to the top of the charts, moving nearly 1 million units in a little over a week.

A surprise tour by the singer, announced in February, has already pulled in over $100 million in ticket sales. In major cities such as New York and London, a buying frenzy sent ticket sales soaring and sold out entire venues.

The reception to Beyonce's Formation World Tour's is all the more impressive given that it came without warning, only seconds after the songwriter's halftime show at Super Bowl 50. Although a sixth solo album remains nothing more than speculation for now, the tour is already expected to gross as much as $250 million on just the strength of the "Formation" single by itself.

Not all of her business efforts have struck gold, however, and some of her recent work has rubbed some the wrong way. Beyonce House of Dereon clothing line was shuttered in 2012 after a rocky six-year run. Meanwhile, her acting efforts have failed to yield a breakout hit (and in some cases have been panned by critics).

"Formation" may have been wildly popular with the BeyHive, but critics blasted Beyonce for what they termed an antipolice message. "The fact that Beyonce used this year's Super Bowl to divide Americans by promoting the Black Panthers and her antipolice message shows how she does not support law enforcement," Javier Ortiz, president at the Miami Fraternal Order of Police, said in a statement. He and several other groups called for police to deny the star protection on her tour.

Yet amid the controversy, Beyonce saw no loss in sponsorship, with observers contending the controversy helped boost ticket sales for her tour.

"Controversy creates conversation, conversation creates curiosity," said Deal. "The controversy will boost her sales; it already has."


Does Kanye West secretly use The Pirate Bay?

StubHub, one of the largest online tickets marketplace, recently told CNBC that the following her Super Bowl 50 appearance, site searches for Beyonce increased by 900 percent.

The company told CNBC that the average ticket for the singer's 2013 tour was $177. Three years later, "Formation" tour tickets average as high as $285 for its Flushing, New York, show and $250 in Chicago, Philadelphia and Pasadena, California, respectively. Fans looking for cheaper seats may want to consider hopping a flight to Toronto, where Stubhub says prices averaged $174 per ticket.

"When Beyonce tours, she consistently is one of our top touring acts," Jessica Erskine, head of entertainment communications at StubHub told CNBC. "She maintains a consistent demand from tour to tour and we expect this one would be no exception."