Gospel Rises Again.

These soul-filled sounds aren't only lifting up spirits, they're raising new business opportunities

MUSIC INDUSTRY PROFESSIONALS PACKED A DIMLY LIT NEW York restaurant one evening this past March to hear gospel music diva CeCe Winans perform. The event announced the release of Winans' second solo effort, Everlasting Love (Pioneer Music Group). While music industry parties are a regular occurrence in New York, the decision by the label's parent company, Pioneer Electronic, to debut its new, high-profile, multi-genre label with a gospel artist was unique. In an era when rock, country, R&B and hip-hop rule the charts, Pioneer (distributed by Atlantic Records) decided to enter the market on gospel's growing popularity.

That launch strategy is an example of gospel music's phenomenal growth and strength. Over the past five years, new artists, a new attitude and a new sound have pushed gospel recordings up the charts. Such self-titled albums as Kirk Franklin & the Family (GospoCentric Records), God's Property (B-Rite Records), as well as the compilation album WOW Gospel 1998 (Verity Records) have racked up previously elusive platinum sales--1 million units each.

Perhaps the clearest statement of its swelling popularity came earlier this year when the Gospel Music Association in Nashville, Tennessee, announced that gospel (a.k.a. contemporary Christian) is the fastest growing genre and the sixth most popular form of music, beating out jazz and classical. It used sales figures from SoundScan, a computerized retail tracking system that supplies the data for most of Billboards charts.

Gospel sales first began to be tracked in the fall of 1995. According to SoundScan's first comparative sales report, 6.7 million gospel records were sold last year, a 32% increase over the 4.5 million units sold in 1996. A 1996 report by the Recording Industry Association of America showed earnings of $538 million, up from $381 million in 1995, a 41% jump.

A number of factors are contributing to gospel's growth. Improvement in the production quality of the music, more upscale marketing and packaging of the artists and their albums, more favorable demographic and sales research, and better record distribution have all made an impact on sales. Buoyed by these factors, a burgeoning number of entrepreneurs are forming new businesses. From management and marketing to television shows and record labels, gospel music is ripe for opportunity. While drawn by the chance to promote a spiritual message, gospel insiders admit there are unique challenges to working in a business bound by both a spiritual directive and the instant gratification of the entertainment industry.

THE GROWTH OF A GENRE

If most business ideas started on a "wing and a prayer," gospel music was no exception. "If you were doing a live [gospel] album seven years ago, you'd pull a production truck up to a church, and you'd have a recording for $3,000," recalls Brian Spears, president of Crystal Rose Records in Detroit, whose roster includes Donald Lawrence and the Tri-City Singers. "Then you'd spend three or four days in the studio mixing, and for a few thousand more, you'd have an album," he adds.

When BeBe and CeCe Winans recorded their debut album, I Owe You Me, for Sparrow Records (distributed by now-defunct Capitol Records) in 1989, they did it on a $40,000 production budget. That was less than a third of the $150,000 then typically allotted to produce new R&B artists. "When Sparrow took the album to Capitol, we thought they would tear it apart," says CeCe, noting that financial constraints often caused the production quality of gospel projects to fall short of what other genres were creating. However, Capitol was impressed by the contemporary-sounding songs, which were conducive to radio airplay on a variety of station formats.

On the heels of the Winans duo's secular success was Take 6 (whose first album produced the hit single "Spread Love") in the late '80s, and more recently Kirk Franklin and God's Property. These artists proved that gospel could successfully compete with other music genres for radio airplay and consumer dollars.

"It wasn't until the record companies realized that [gospel] could be very lucrative that they decided to get behind gospel artists and [develop] them like anybody else," says CeCe, whose new album debuted in the No. 1 spot on the gospel chart. Production budgets have now increased substantially, averaging about $100,000 for established artists. And many of the bigger gospel artists are enlisting the services of high-priced producers and songwriters for their projects, which command even higher budgets.

Equally important has been revamping the images of its artists. These days, artists such as vocalist/songwriter Yolanda Adams, whose style drew attention when she braided her hair and donned sleek, cutting-edge fashion, and God's Property, who outfit themselves in such hip-hop fashion staples as Nike and FUBU, are redefining what is "acceptable" fashion for gospel artists.

Adams, one of the first artists to challenge the traditional thought of how a gospel artist should look, says she found that fans responded to her style. "We got feedback from record stores where people looked at the album cover for More Than A Melody and said, `Wow, who is this, what kind of music is this?' They'd pick up [the album] just because of the picture, so we know packaging is important."

Teresa Hairston-Harris, publisher of Gospel Today and Gospel Industry Today magazines, says artists' performances are also helping to revamp the music's image and add to its appeal. Previously, gospel artists were reluctant to dance onstage, but the rules are changing. "The performances are much different now than 10 years ago," says Harris. "There's choreography and staging; it's unashamedly entertaining." Last year's "Tour of Life" road show, featuring Kirk Franklin, Yolanda Adams and Fred Hammond, had a staging that cost $125,000--an unprecedented amount for a black gospel tour.

While visual repackaging and a few key artists have piqued the interest of major record labels, it took both an increase in sales and favorable demographic research to convince them to invest in gospel music. A 1996 study by New York-based Interep Research found that 50% of gospel radio listeners were 25-44, the prime demographic that accounts for more than 59% of all record sales.

These trends have prompted many of the major labels to either acquire or create distribution deals with existing independent labels. Sparrow Records (BeBe Winans) was purchased by EMI, while Word Records (Shirley Caesar and Anointed) was bought by Gaylord Entertainment. Others like B-Rite Music (God's Property) signed distribution deals with the likes of hip-hop label Interscope Records. As a result, labels that previously had trouble getting their product into national retailers are now receiving prime placement through their relationships with larger music companies.

A LABEL OF THEIR OWN

Two entrepreneurs at the forefront of gospel's explosion are Vicki Mack-Lataillade and husband Claude Lataillade, owners of GospoCentric and B-Rite Music. Six years ago, Mack-Lataillade, who'd worked for 15 years as an independent marketer on projects for Andre Crouch, Tramaine Hawkins and Whitney Houston, launched GospoCentric with the specific intention of bringing new sounds and voices to gospel music.

"The No. 1 music among youth is rap, and the churches tried to pretend that it didn't exist," says Mack-Lataillade. Unable to convince major labels that it was possible to create music that praised God while appealing to the musical inclinations of urban youth, she developed the kind of spiritual music her own children would like.

To launch the label, Mack-Lataillade pooled $10,000 from a variety of sources, including her dad's retirement fund. "We couldn't get loans from traditional sources because no one believed it would work," she recalls. Undeterred, she began building her label's roster, signing Kirk Franklin, then a 22-year-old, Dallas/Ft. Worth choir director with a reputation for creating radical gospel song arrangements, as her first artist.

"Kirk was very young and he reminded me of a lot of other penned-up kids. I said, We slowly but surely have to let him be who he is," says Mack-Lataillade. With this philosophy, the Lataillades helped Franklin shape his debut album into one of traditional gospel music that incorporated cutting-edge elements of the artist's style. The project produced Franklin's first hit single, "Why We Sing," a richly layered, call-and-response ballad.

While working on Franklin's album, Mack-Lataillade struck a distribution deal with Sparrow Records, which placed GospoCentric's product into Christian bookstores, still the primary retail outlet for Christian music sales. When EMI bought Sparrow in 1992, it began distributing GospoCentric releases to secular music chains. "That [deal] was really important because it happened right around the time we released Kirk's first album," says Mack-Lataillade. "It meant we weren't just relegated to the Christian market," adds Claude Lataillade, a former software engineer, now CFO of the label.

Distribution, however, was only one of many challenges faced by GospoCentric. Without the financial backing of a major music company, the Lataillades had to be extremely creative and driven about promoting their label's product. "We put together a network of churches and pastors, and researched the market to find out who wasn't being reached. We also read books like Economic Empowerment Through the Church [Zondervan Books, $17.99] by Gregory Reed," adds Mack-Lataillade. The couple also talked to veteran gospel artists to learn what they did to survive.

When GospoCentric released Franklin's debut in the fall of 1993, the Lataillades knew that their Sparrow/EMI distribution deal would insure they had sufficient product at retail outlets. However, with no capital to support a major marketing campaign, they developed grassroots methods of creating awareness and demand for Franklin's album.

Borrowing on what she learned from veteran gospel artists, Mack-Lataillade put her connections to work and sent Kirk Franklin & the Family out on a church tour, where "love offerings" were taken up by the congregations to pay the performers. Help also came in the form of staff let go from the black music divisions of major labels, who provided information and research. "A number of those [marketing, publishing and business administration] people came to work for us for free, in the evenings or on weekends," explains Mack-Lataillade. "It took us three years to break Kirk's first project, and by the time it hit [the urban market], we had spent a great deal of our money already," she adds. "We began to realize, though, that our wealth wasn't in the money, but in the knowledge and resources we had gathered."

It may have taken a while for GospoCentric to break the group in, but they hit in a big way. "We knew something was happening when WGCI [radio] in Chicago told us they were getting more requests for Kirk Franklin than for Mary J. Blige," says Mack-Lataillade. "An album that we estimated would sell 30,000 units ended up platinum."

Their second album, Whatcha Lookin '4, released in 1995, went platinum in less than a year. Its success paved the way for Claude Lataillade to start B-Rite Music, a second, more youth-driven label. "Our reason for starting the second label was to have a vehicle for more cutting-edge gospel," he explains. "To do that we needed to have a strategic partner for reaching urban youth. Interscope became that [partner]."

It was through B-Rite that Franklin realized his more radical music offerings and produced the 1997 platinum-selling album God's Property From Kirk Franklin's Nu Nation. It held the No. 1 spot on both Billboard's gospel and R&B charts, and entered the pop chart at No. 3. Its debut single, "Stomp," a celebratory rap, became a staple on R&B and pop radio stations, while the video went into rotation--a major marketing coup--on BET and MTV.

GETTING IN ON MANAGEMENT

Starting a record label is costly. The success of the Lataillades' labels is not typical of most gospel independents. More often, these labels have rosters with three to seven artists who've sold less than a million records altogether.

Some entrepreneurs have achieved success by launching businesses attached to gospel music. Shiba Freeman Haley worked as a concert and events production manager for 10 years before partnering with Louis Bond, a friend who was launching a record production and artist management company in 1990. It was through this partnership that she began working with Yolanda Adams, who signed a management contract with Bond's company right after the 1991 release of her second album, Through the Storm (Verity Records, formerly Tribute/Diadem). Haley and Adams worked closely over the next year, and when the artist's contract with Bond's company expired, she recruited Haley to manage her.

As manager, Haley negotiates Adams' performance and recording contracts, pursues promotional and income opportunities and aligns Adams with organizations or causes that reinforce her ministry. While Haley was no novice to the music industry, management required a very different set of skills than the ones she'd honed before.

"There are managers who are also lawyers, but that's not my background, so I had to make sure Yolanda had the right legal representation," says Haley. "I also had to commit to representing just one artist, because there was still a lot I had to learn about management and building relationships with record labels."

With Adams' statuesque looks, eclectic musical style and powerful song delivery, Haley felt strongly that her artist could reach beyond the traditional gospel audience. She was unable, however, to convince the label to invest in creating visual packaging or advertising that would promote Adams beyond the gospel market until there was evidence of sales in other markets.

Determined to prove her broader appeal, Haley hired an independent publicist to book Adams on such shows as the Tonight Show with Jay Leno, CNN News and BET's Teen Summit. The benefits of receiving media exposure beyond traditional gospel outlets were obvious in the sales of Adams' next album, Save the World, which sold more than 150,000 units (50,000 is considered successful).

Increased sales convinced Tribute/ Diadem to invest more into marketing and promoting Adams' next two releases, More Than a Melody and Yolanda--Live In Washington. But with Adams' contract coming to an end, Haley has secured a new record deal. "Everyone knows Yolanda has a great potential to be commercial. What she's singing about won't change, but she can hit the jazz, traditional gospel and R&B markets," adds Haley. She stresses, however, that it's important for managers of gospel artists to remember that expanding doesn't mean abandoning the core gospel market. "Gospel music listeners are a lot less forgiving [if you abandon them] than other music listeners," she says.

MARKETING THE MESSAGE

As gospel's audience has grown, so too has corporate America's desire to promote products and services to them. Through her Atlanta-based marketing company, Results Inc., Melanie H. Few works to pair gospel artists and companies in deals that support both parties' goals.

Few, who created an endorsement deal between Kirk Franklin and Church's Chicken, has also handled Revlon's sponsorship of numerous gospel events. "The deals can't be perceived as just an opportunity to make money. The brand has to be committed to supporting the [artist's] ministry," she adds.

According to Few, who launched her company in 1995 after leaving a national marketing position with R.J. Reynolds, gospel's evolving demographics are extremely attractive to advertisers trying to reach African American consumers. For example, Interep's 1996 survey found a higher percentage of homeowners, full-time employees, professionals, college graduates and those with household incomes above $50,000 among African American gospel music listeners than among the general African American population. Few promotes these stats to get corporate America listening.

While gospel music is becoming a popular marketing vehicle, companies must consider that they are targeting consumers who have a very definite moral code, and who believe strongly in community involvement and uplift. Few encourages her corporate clients to go beyond sponsoring tours or making commercials if they want to successfully reach their audience.

It was this approach Few took in developing Church's Chicken and Revlon's gospel marketing strategies. Church's initially recorded a radio spot with Franklin. It received such positive response that the company asked Franklin to record a television commercial and two public service announcements for their "Day of Dreams" campaign to benefit Habitat for Humanity.

Few pushed the relationship a step further and suggested that Church's work out a franchise deal with Franklin for a restaurant in the Dallas/Ft. Worth area that would be dedicated to hiring and training youth. It was an idea that went over big with franchise executives, who ultimately signed a letter of intent with Franklin to develop 15 franchises, with the first three restaurants to open in Texas by year's end.

Few's work with Revlon has aligned that company's Creme of Nature HerbaRich product line with a broad range of gospel events. "We wanted to tap into the affluent female African American market," explains Revlon's vice president of ethnic marketing, Maria Jones.

Few admits that her decision to focus on gospel marketing has forced her to carefully consider the other kinds of accounts her company accepts. She adds, however, that the choice has been more blessing than sacrifice. "Our plates are full. We still will deal with R&B and pop [vehicles], but they have to be positive."

RELATED ARTICLE: Resources for Gospel Entrepreneurs

WHILE THE GOSPEL MUSIC INDUSTRY can be exciting and fulfilling, it also requires entrepreneurs to balance both the exploitative nature of the music industry and the moral dictates of a spiritually based audience. "You have to remember that today's market is driven as much by the church as it is by the music industry," explains Billboard magazine gospel columnist Lisa Collins, who also publishes the annual resource book Gospel Music Industry Round-Up and L.A. Focus on the Word newspaper. "People in gospel are concerned about your motives. They want to know you're not coming in to rape the industry."

Collins advises that you develop strong ties with the gospel community and those in gospel music. In addition, you should do your homework and be as well versed in the culture and grassroots network of the black church and the gospel community as you are in the workings of the music industry. Ministers, church musical directors, church bookstores and annual conferences represent some of the support systems, informational sources and marketing opportunities for gospel music entrepreneurs.

The following is a list of resources that may be useful if you're interested in launching businesses related to the gospel music industry.

Gospel Music Industry Round-Up. The bible of the gospel industry, this annual resource book lists information for contacting artists, producers, booking agents, record labels, radio stations, TV shows, retailers, distributors, churches and annual industry and consumer events ($16.95; to order, call 310-677-6011).

Bobby Jones Gospel. In addition to hosting the No.1 show and weekly gospel show on BET, Jones coordinates and hosts a variety of professional and entertainment events throughout the year. Events include his Gospel Explosion at Disney World and a recording artists and executives retreat in Las Vegas. For more information, call Millennium Entertainment at 615-254-1430

United Gospel Industry Council. This organization's goal is to foster the artistic and economic growth of gospel music, and to act as a bridge between the Christian and secular music industries. For more information, contact Teresa Hairston-Harris (president), P.O. Box 293146, Nashville, TN 37229.

Gospel Industry Today. A monthly trade publication, it reports on gospel industry news, and provides charts and advice to entrepreneurs. For subscriptions ($24/10 issues), contact Horizon Concepts, P.O. Box 292494, Nashville, TN 37229: 615-376-5656.

Gospel Music Association (CMA). Provides educational information and resources for gospel artists, nurtures Christian music ministries and preserves gospel music's legacy. For more information, contact Frank Breeden. 1205 Division St., Nashville, TN 57203; 615-242-0303; www.doveawards.com.