March 29, 2020

Collectors of Royalties for Music Publishers May See Better Results

The music industry is used to bad news. When the International Federation of the Phonographic Industry announced that record sales in 2012 had their first yearly uptick since 1999, for example, there was jubilation in the record business — even though the gain was only 0.3 percent.

One area that has been growing consistently, however, are the royalties from performing rights organizations like Broadcast Music Inc. and the American Society of Composers, Authors and Publishers, which pay songwriters and music publishers when their music is broadcast, performed live or streamed online.

BMI, as Broadcast Music is known, will announce on Monday that it had $944 million in revenue for the year that ended in June. That is 5 percent more than it collected the year before, and a new high for the organization, whose 600,000 members include stars like Taylor Swift, Pink and Adam Levine of the band Maroon 5. BMI paid $814 million in royalties, the first time its annual distributions have exceeded $800 million. Since 2003, BMI’s revenue has increased about 50 percent.

The performing rights societies are some of the industry’s oldest financial engines, and they are trying to adapt to a digitized business that has spread far beyond radio and broadcast television, their bread and butter for decades.

BMI, which was founded in 1939, collected $57 million in its most recent year from digital services, which include not only Pandora and Spotify but also Hulu, Netflix and other online outlets. As recently as 2009, such services represented just 2 percent of BMI’s domestic revenue, but in its latest fiscal year they were 9 percent.

BMI’s “general licensing” category, which includes live performances as well as the music played in restaurants and other businesses, brought in $116 million, and $297 million more came from international sources. Michael O’Neill, who took over as BMI’s chief executive this month, said the organization had become leaner through staff reductions and by building a more efficient digital infrastructure to track billions of performances of its songs.

Founded in 1914, the American Society of Composers, Authors and Publishers, or Ascap, reported in March that it had $942 million in revenue for 2012, down 4.2 percent. For the year that ended in June 2012, BMI’s revenue also fell by about 3.5 percent, to $899 million. In those periods, both organizations — which are nonprofits regulated by federal consent decrees — were hit by a royalty renegotiation with radio broadcasters.

Even as the performing rights organizations have tried to adapt and streamline their operations for the digital age, their future has been cast into doubt. In recent years, some of biggest publishers have withdrawn digital rights to their catalogs from the performing rights organizations, in an effort to control the royalty rates paid by online services like Pandora.

But last week, a federal judge in a case between Ascap and Pandora ruled that publishers could not keep some rights within Ascap but withhold others. That decision did not directly affect BMI. But it raised concerns that the societies — already threatened by the trend of rights withdrawal by publishers — could be in even greater danger if they are seen as standing in the way of publishers getting the highest rates they can.

“This was the year we were declared dead by some,” said Richard Conlon, a senior vice president at BMI, “and we just hit a 74-year high in revenue.”

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DealBook: Uninvited Guest Jolts Japan’s Business Culture

Sony's entertainment unit includes a film studio and one of the largest music labels in the world, featuring artists like Taylor Swift.Richard Perry/The New York TimesSony’s entertainment unit includes a film studio and one of the largest music labels in the world, featuring artists like Taylor Swift.

TOKYO — Devil. Vulture. Saboteur.

All these words have been used to greet Western investors who have agitated for change in Japan’s clubby and complacent corporate culture. As the hedge fund billionaire Daniel S. Loeb prepares to take on Sony, he may find the same hostility from the company that at one time single-handedly defined premium quality in entertainment and electronics.

How Sony, and Japan, react to the demands brought by Mr. Loeb on Tuesday could become a test of how far the country has come in making good on promises to open up to more foreign investment and, more important, change.

Prime Minister Shinzo Abe, who took office in December, has promised to shake up corporate Japan by removing onerous regulations, protections and inflexibilities that have sapped profitability and hampered serious revamping.

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Investors initially are cheering Mr. Loeb’s efforts. Sony’s shares rose nearly 10 percent in the United States to close at $20.76 on Tuesday. The reaction among those who matter — Sony’s managers — has been muted.

Almost no local media outlets carried the story of Mr. Loeb’s hand-delivered list of demands to Sony on Tuesday, hours after those demands had been made public. Sony itself issued only a curt statement, saying its entertainment businesses were “not for sale.”

“Sony is an icon. Until now, it hasn’t had a fellow like this coming in and making demands in public,” said Nicholas Benes, a former Wall Street banker who now advises Japanese companies on corporate governance. “But now he comes in with guns blazing. This hasn’t quite started off right, you might say.”

Activist investors like Mr. Loeb’s fund, Third Point, might seem like natural allies in that mission to prod Japan’s corporations toward change. Mr. Loeb’s demands for Sony’s management center on bringing more focus to its sprawling business, something analysts have long called for, partly by spinning off a part of its entertainment arm. And Mr. Loeb cites Mr. Abe’s promised economic reforms as a big reason behind his recent interest in Japan.

Nowhere has revamping been so painfully needed as in Japan’s electronics industry, where six major manufacturers, including Sony, still produce flat-panel televisions, mostly at a loss. Better labor mobility might make companies more reluctant to close or spin off money-losing operations and focus on profitable lines of business.

Kazuo Hirai, the chief of the entertainment and electronics colossus Sony.Justin Sullivan/Getty ImagesKazuo Hirai, the chief of the entertainment and electronics colossus Sony.

American activist investors have, however, met with frustration in the efforts to add value at other companies. T. Boone Pickens, who acquired a minority stake in the auto parts company Koito Manufacturing in 1989, pressed its management for better dividends and a seat on its board. But the little manufacturer dug in its heels. Shareholders heckled him with anti-American taunts at its annual shareholders meeting; the press branded him an opportunistic vulture. Koito’s president refused even to meet the Texan magnate.

“O.K., Koito; I give up,” Mr. Pickens declared in a statement two contentious years later, before selling his entire stake. “The heck with Japanese business.”

Mr. Loeb is unlikely to get such openly hostile treatment from Sony, now that he is a significant investor with a 6.5 percent stake in the company. After all, it is 2013, and Sony, unlike Koito, is a global, savvy firm.

Gerhard Fasol, president of the Tokyo technology consulting firm Eurotechnology Japan, said Mr. Loeb had probably studied past unsuccessful approaches to Japanese companies.

“My guess is that he learned from the mistakes those activist investors made and was advised to tone things down,” Mr. Fasol said. Mr. Loeb makes a point of starting the note with praise for Mr. Hirai and his commitment to change.

Mr. Loeb has suggested that Sony take 15 to 20 percent of the entertainment unit public by offering current Sony shareholders the opportunity to buy shares. The unit includes a leading film studio and one of the largest music labels in the world, featuring artists like Taylor Swift. A spinoff could lead to higher profit margins, while helping to revive the core electronics business, Mr. Loeb argues.

Yet even though many inside and outside Japan recognize that Sony’s divisions need some shaking up, a hedge fund manager like Mr. Loeb may not be the one who is ultimately successful.

Active investing has long been seen in Japan as a dangerous, alien practice led by foreigners, or cheeky locals who dare imitate them. And in past cases, lenders, bureaucrats, other shareholders and even rivals have swooped in to rescue companies from investors’ talons. Of the 23 hostile takeover bids in Japan since 2000, only 7 have been successful, according to Dealogic

The cross-shareholdings of Japanese companies — with close ties to their main bank and other companies, known as keiretsu — have helped foster an environment where hostile takeovers are rare and shareholders are docile supporters.

But in the mid-2000s, when Japan seemed to stage a nascent recovery, the country attracted a wave of what company executives came to call “investors who say things.”

In 2006, when Steel Partners, an American fund, took out a stake in the noodle maker Myojo Foods, the company flatly refused to entertain a proposal for a management buyout, accusing the fund of trying to sabotage the company’s future for short-term gain. When Steel Partners instead started a takeover bid, Myojo ran into the arms of its noodle archrival, Nissin Foods, which bought it out.

Undeterred, Steel Partners aimed at another food company, this time a condiment maker called Bull-Dog Sauce, and accumulated a 10 percent stake in 2007. Not satisfied with the management’s reluctance to expand overseas to make up for a waning domestic market, the fund started a tender bid for the rest of the company. This time, it was thwarted by a landmark ruling by Japan’s Supreme Court supporting the use of “poison pill” defenses in Japan.

The media followed the food companies’ tribulations with much gusto, berating the brash manners of Warren Lichtenstein, chief of Steel Partners. The public broadcaster, NHK, showed a drama series, “Vulture,” about an American investment firm that snaps up troubled companies.

“Is he a devil, or a savior?” the narrator asked in a booming voice.

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DealBook: Hedge Fund Manager Loeb Targets Sony for a Breakup

Daniel S. Loeb's hedge fund, Third Point, has amassed a stake of about 6.5 percent in Sony.Steve Marcus/ReutersDaniel S. Loeb’s hedge fund, Third Point, has amassed a stake of about 6.5 percent in Sony.

3:42 a.m. | Updated

An American hedge fund billionaire known for starting big fights has called for a breakup of the entertainment and electronics colossus Sony, according to people briefed on the matter, possibly setting off a battle that could roil Japan’s famously staid corporate culture.

The call, which came on Tuesday, will most likely be viewed by government officials and corporate leaders in Tokyo as a shot across the bow from Wall Street, just as Western investors begin piling into Japanese stocks.

The hedge fund manager, Daniel S. Loeb, is pressing Sony to spin off part of its entertainment arm, which includes one of the biggest film studios in Hollywood and one of the largest music labels in the world, responsible for movies like “Skyfall” and artists like Taylor Swift.

Mr. Loeb — known for ousting Yahoo’s former chief executive and luring Marissa Mayer away from Google to run the company — also signaled that he would accept a seat on Sony’s board.

His hedge fund has quietly amassed a stake of about 6.5 percent in Sony, making it one of the biggest shareholders. The holding, made up of stock and derivatives, is valued at about $1.1 billion.

Still, even big Japanese investors have often faced resistance in seeking changes at companies, a hurdle that may be significantly higher for a foreign hedge fund manager.

A spokesman for Sony, Shiro Kambe, said in a statement that the company welcomes investments. “We are focused on creating shareholder value by executing on our plan to revitalize and grow the electronics business, while further strengthening the stable business foundations of the entertainment and financial services businesses,” he said.

But Mr. Kambe also pointed to repeated assertions by Sony’s chief executive, Kazuo Hirai, that Sony Entertainment contributes significantly to the overall company and is not for sale. “We look forward to continuing constructive dialogue with our shareholders as we pursue our strategy,” he said.

Mr. Loeb, 51, the founder of the hedge fund Third Point, flew to Tokyo this weekend for three days of meetings with government officials, regulators and senior Sony executives, according to people briefed on the matter. He hand-delivered a letter on Tuesday to Mr. Hirai that praised a turnaround effort but asked for more.

“So while Third Point supports your agenda for change, we also believe that to succeed, Sony must focus,” Mr. Loeb wrote in the letter, which was reviewed by The New York Times.

After the meeting, the hedge fund manager told associates that he was impressed by Mr. Hirai and supported management, according to a person briefed on the matter.

Mr. Loeb said he believed that spinning off a portion of the entertainment business to Sony shareholders could sharpen the company’s focus and lead to higher profit margins, while helping to revive the core electronics business. He has also contemplated a potential spinoff or sale of other operations, including Sony’s insurance division, which accounted for much of the company’s profit last quarter.

The campaign is a bet that Japan will prove the next gold mine for global investors. Long hobbled by a so-called lost decade of little economic growth, the country has come to life in recent months under the stewardship of Shinzo Abe, who as prime minister has promoted policies meant to attract private investment. Mr. Loeb is betting that Mr. Abe will expand deregulation.

“Under Prime Minister Abe’s leadership, Japan can regain its position as one of the world’s pre-eminent economic powerhouses and manufacturing engines,” Mr. Loeb wrote in his letter.

Despite its decade-long slump, Sony, the 67-year-old electronics pioneer, remains one of the most prominent companies in Japan, with a market value of roughly $18 billion.

Still, Mr. Loeb has plenty of ammunition. Shares of Sony have plunged nearly 85 percent over the last 13 years. The company long ago ceded its crown as the king of cool electronics to Apple, and its dominance in televisions was eroded by the emergence of Korean rivals like Samsung and LG.

Last week, Sony reported its first annual profit in five years. But it reached that milestone thanks largely to the weakening yen and some belt-tightening, including the consolidation of businesses and the sale of its American headquarters.

Sony’s chief executive, Mr. Hirai, is scheduled to make a presentation about the company’s turnaround plan next week. He has argued that despite having come late to the era of digital media, the company that made the Walkman, the Trinitron television and the PlayStation can rebound.

To Mr. Loeb, more must be done, starting with the spinoff of Sony Entertainment. Though the division accounts for more than 40 percent of the company’s enterprise value, he said in his letter that it needed discipline to raise its profit margins. Mr. Loeb estimated that a partial spinoff of the entertainment business could bolster Sony’s share price by as much as 60 percent.

In his letter, Mr. Loeb proposed handing 15 to 20 percent of Sony Entertainment to existing shareholders. His firm would be willing to backstop the initial public offering up to $2 billion to ensure its success.

Other underappreciated assets include the company’s 60 percent stake in Sony Financial, which largely sells life insurance policies, as well as real estate holdings and stakes in other companies. And Mr. Loeb is expected to argue that Sony’s electronics division must sharply reduce costs, including by taking a cue from its protégé, Apple, in focusing on a few core products.

Mr. Loeb has recently expressed his interest in Japan. Referring to the changes by the Abe government, he called it “a huge game change” at an industry conference last week. “And there’s a lot more room to go,” he added.

Mr. Abe has called his revival effort a plan of “three arrows,” including aggressive monetary easing by the Bank of Japan and enormous stimulus spending by the government.

So far, that effort appears to have drawn investor plaudits. The yen weakened in value last week, to 100 to the dollar, a level unseen in four years, helping local companies like Sony and Toyota. And the Nikkei 225-stock index has risen 43 percent so far this year. At the same time two years ago, the Nikkei was down 5.7 percent.

Shares in Sony rose 1.2 percent in Tokyo on Tuesday, while the Nikkei closed down 0.16 percent.

But it is the third arrow that has Mr. Loeb’s attention. The Abe government hopes to shed Japan’s reputation as a land of strict hierarchy and bureaucracy. Business mistakes were often seen as shameful, and outright confrontation largely disdained.

“There’s an entrenched management culture there,” said Lawrence B. Lindsey, a former top economist in the administration of President George W. Bush. “Activists aren’t particularly popular here among management, and they won’t be popular in Japan either.”

No less than Howard Stringer, Sony’s own chairman, has criticized the status quo.

“Japan is a harmonious society which cherishes its social values, including full employment,” he said in a speech last year. “That leads to conflicts in a world where shareholder value calls for ever greater efficiency.”

Yet there have been changes. The percentage of foreign ownership in companies on the Tokyo Stock Exchange nearly quintupled, to 24 percent, from 1990 to 2008. And Japanese shareholders have increasingly adopted the aggressive tactics of Western fund managers.

Sony is the biggest bet yet for Mr. Loeb, an intense California native who built his name largely upon acidly written letters, berating targets for mismanagement and calling for change.

The strategy has proved profitable. Third Point’s returns are up 13.3 percent this year and up 2.6 percent for the first week of May. Forbes estimates Mr. Loeb’s net worth at about $1.5 billion.

Perhaps the most prominent victory has been Third Point’s investment in Yahoo, where Mr. Loeb pushed for the dismissal of a chief executive after exposing the executive for falsifying academic credentials.

Mindful of Japanese decorum, however, Mr. Loeb strikes a more conciliatory tone in his letter to Mr. Hirai of Sony. His calls are couched as suggestions aimed at improving the company, rather than aggressive demands.

“Third Point would not have made this substantial investment if we did not believe in a bright future for Sony’s global brand, superior technology, and dedicated employees,” he wrote. “We are confident that by acting as partners, Sony will grow stronger.”

Hiroko Tabuchi contributed reporting.

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Media Decoder Blog: Cablevision Sues Viacom Over Bundling of Channels

Taylor Swift performed at MTV’s Video Music Awards last year.Matt Sayles/Invision, via Assocated Press Taylor Swift performed at MTV’s Video Music Awards last year.

7:52 p.m. | Updated To all the cable customers who have ever wondered, “Why am I paying so much money for channels I never watch?” Cablevision has an answer: it’s Viacom’s fault.

The cable distributor on Tuesday sued Viacom, the owner of MTV and Nickelodeon, saying that the company violated antitrust law by bundling those big channels with barely known ones like Tr3s and Palladia, in that way forcing cable companies and their customers to pay for channels that few people watch.

SpongeBob SquarePants, a fixture on Nickelodeon.Nickelodeon SpongeBob SquarePants, a fixture on Nickelodeon.

The antitrust lawsuit, filed in federal court in Manhattan, may represent a watershed in the debate over “bundling,” or the practice of selling channels to cable and satellite providers in a package. For decades distributors like Cablevision and programmers like Viacom have found it in their best interest to keep the bundle intact, avoiding the “a la carte” idea promoted by public interest groups.

But the two sides are increasingly at loggerheads over the costs as customers’ bills keep rising and when some viewers are turning to the Web for entertainment. Bundling, part of the bedrock of the television industry, is now a potential target.

“This is most interesting as a break between operators and content providers, most of whom have traditionally argued that bundling is good for them, just disagreeing about the price and who controls the bundle,” said Gene Kimmelman, a former Justice Department antitrust lawyer.

In a statement, Cablevision said that “Viacom effectively forces Cablevision’s customers to pay for and receive little-watched channels in order to get the channels they actually want.” In a sign that the issue is larger than just this one dispute, several other distributors — DirecTV, Time Warner Cable and Charter — rallied behind Cablevision after the suit was announced.

Viacom says that, like other programmers, it does not require distributors to bundle all of its channels together; rather the company provides financial incentives to bundle by offering lower prices when smaller channels are grouped together with bigger ones. If a cable operator wants to buy only MTV or Nickelodeon, for example, it has the option to do so at a higher cost per channel.

In a statement Viacom said that it had “long offered discounts to those who agree to provide additional network distribution” and that most distributors viewed these arrangements as “a win-win and pro-consumer.” Federal courts have previously upheld the legality of these arrangements, Viacom said. A person close to Viacom not authorized to discuss the lawsuit for attribution pointed out distributors’ large profits and called the support for Cablevision a public relations stunt.

Cablevision, which is controlled by Charles F. Dolan, said in a statement that the dispute would not result in an immediate disruption in programming, the kind that has become all too familiar to viewers over the years. The company said the lawsuit was filed under seal. A public complaint is expected to be released this week.

Viacom and Cablevision renewed their carriage agreement in December. At the time, no one left the negotiating table with the sense that a lawsuit was imminent, said one person involved in the discussions who would not comment publicly on private conversations. In the statement, Viacom said the lawsuit was a “transparent attempt by Cablevision to use the courts to renegotiate our existing two-month-old agreement.”

This includes the court of public opinion, perhaps. Some customers continue to agitate for the right to pick and choose which channels they receive from distributors on an a la carte basis, while many others say they are content with the buffet of channels they receive now.

Class-action lawsuits against bundling have failed in the courts to date, as did a 2004 case filed by Echo Star that said that Viacom had forced its Dish Network to carry MTV, Nickelodeon and other cable channels in order to carry 18 CBS-owned stations in 15 large media markets. Before the companies settled that case, more than nine million Dish subscribers lost access to MTV and Nickelodeon and 1.6 million lost CBS.

But the lawsuit on Tuesday was different, in that it seemed in part an industrywide effort to both tar Viacom and to portray distributors as pro-consumer and resistant to escalating cable bills, even as they carry out those very same price increases. They have argued for years — more and more loudly of late — that channel owners are the ones requiring them to raise the monthly cost of television service.

In a statement, Time Warner Cable, the second-biggest cable company in the country behind Comcast, said: “We frequently have pointed out that there are serious problems with the current programming environment. We think this lawsuit raises important issues, and we look forward to their resolution in the courts.”

DirecTV agreed, saying, “Our customers have told us time and time again they don’t want to pay for channels they don’t watch.” Charter said the lawsuit sent “a clear message to programmers that unlawful and irresponsible market tactics will not be tolerated.” Dish Network, the second-largest satellite provider behind DirecTV, and Comcast declined to comment.

Among the threats that distributors face are new and possibly cheaper cablelike services delivered by companies via the Internet. Intel has said that it is working on one such service, and other companies are eager to try, as well. If these services, colloquially called “over the top” because they ride on top of existing broadband pipes, succeed, then incumbent cable providers may have to change their own channel packages and pricing to compete.

For the lawsuit to succeed, Cablevision would not only need to prove that bundling harmed customers, but that it hindered competition by prohibiting smaller media companies from obtaining carriage for their channels. Before Cablevision spun off the regional sports channel MSG, it, too, bundled the channel with the less popular MSG2 and MSG Plus.

A version of this article appeared in print on 02/27/2013, on page B3 of the NewYork edition with the headline: Cablevision Sues Viacom in Battle Over Bundling of Channels.

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Advertising: Keds Campaign Features Taylor Swift

The 21st century equivalent may be the Taylor Swifty, named for Taylor Swift, the young singer and songwriter whose relationships have become fodder for comedians online and offline.

Magazines including Life Style, Time and The Week have mocked Ms. Swift’s proclivity for writing songs about her ex-boyfriends. And during the Golden Globes, as Sam Fox, the 23-year-old son of Michael J. Fox, helped present the awards, Tina Fey pretended to warn Ms. Swift against dating him.

As Taylor Swifties proliferate in the media, the Keds line of footwear is preparing to introduce a campaign featuring Ms. Swift that delivers a strongly social message to the brand’s young, female target audience. The campaign, scheduled to begin in print, online and in social media on Thursday, appeals to “brave girls” and “bravehearts” and offers Ms. Swift as a role model.

“If you’re lucky enough to be different from everyone else,” Ms. Swift is quoted as saying in one ad, “don’t change to be the same.”

Another ad offers advice like this: “Try things. Say hi already. Laugh a lot. Mess up. Apologize. Mess up again. Hug people. Take chances. Trust yourself.” The litany ends, “Be brave and you’ll have the time of your life.”

A special Web site,, and a section of the Keds Web site,, are to be devoted to the campaign’s theme, carrying encouraging words like “Welcome, brave girl, keep your head high and your heart open” and “Don’t you dream impossible things?”

The campaign, with a budget estimated at $20 million, is being handled by Toth Company, for the creative aspects; the ShopPR division of Lippe Taylor, for the digital and social media elements; and PGR Media, for the media duties.

The campaign builds on a relationship between Keds and Ms. Swift that started in October, when Keds sold red sneakers inspired by her new album, “Red.” Now, Ms. Swift becomes the face of the Keds brand, which since May has been owned by another familiar name in footwear, Wolverine Worldwide.

Ms. Swift’s growing relationship with Keds comes as her marketing presence has increased. For instance, she worked with the Walgreens and Duane Reade units of the Walgreen Company to sell merchandise bearing her name, which included T-shirts, posters and calendars, in an effort that began in October and continued through the Christmas shopping season.

“She’s a classic in the mold of the great country singers with wide appeal” like Garth Brooks, said Ira Mayer, publisher and executive editor at The Licensing Letter, a newsletter in New York, part of Business Valuation Resources. “Even people who don’t like country music like her.”

Mr. Mayer said he did not believe that the jokes about Ms. Swift would detract from her appeal as an endorser.

Although “no one wants his or her love life hung out on the line to dry,” he said, such “gossip is part of what celebrities have to cope with nowadays.”

The jests about Ms. Swift, who is 23, have not affected her image, according to widely followed measurements of celebrity popularity known as Q scores. “She’s been remarkable in her ability to retain her above-average appeal,” said Henry Schafer, executive vice president at the Q Scores Company in Manhasset, N.Y.

Ms. Swift’s Q score is 24, Mr. Schafer said, compared with 17 for the average celebrity and 16 for the average female singer. And with females age 13 to 24 — the intended audience for the Keds campaign — her Q score is 26, he said.

“Her emotional connection with that demographic is very strong,” Mr. Schafer said, so for Keds “she looks like a good choice.”

Among children ages 6 to 12, he added, Ms. Swift’s Q score is 45.

The campaign represents a significant increase in ad spending in major media for Keds. According to the Kantar Media unit of WPP, spending totaled $1.7 million in 2010, $1.1 million in 2011 and $363,000 in the first nine months of last year.

“We started doing a lot of consumer insight work,” said Rick Blackshaw, president for Keds in Lexington, Mass., and found that “heroes are important” to the brand’s target audience.

“We thought about who would be Brave Girl No. 1,” he said, and came up with Ms. Swift, who “at 14 convinced her family to move to Nashville so she could pursue her musical career.”

As for the Taylor Swifties, “it’s nothing we’re going to comment on,” Mr. Blackshaw said. “We think she is a fantastic role model, an incredible talent and really meaningful to our girl.”

That was echoed by Bob Fouhy, president at Toth in Cambridge, Mass., who praised Ms. Swift because “she so strongly embodies what the Keds brand is about: being eternally optimistic and confident.”

“The world says what the world says about celebrities these days,” he added. “We’ve worked with lots of celebrities, and she was remarkably down to earth, considering her ‘superstarness.’ ”

There are plans for the campaign to include other elements like scholarships and mentorships.

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Nash FM Brings Country Music Back to New York Radio

But until this week, the country format was nowhere to be found on the New York radio dial.

On Monday, Cumulus Media introduced Nash FM, which ended country music’s 17-year drought on New York radio. The station provides the first glimpse of what Cumulus says will be an all-purpose vehicle to market what it calls the “country lifestyle” on dozens of its radio stations across the country as well as online, on television and in a new magazine.

The new station, WRXP, at 94.7 FM, fills a conspicuous gap in the nation’s largest media market. It is also an indication of how strong the country genre has become, not only in music but also in the broader popular culture, led by telegenic young acts like Taylor Swift and the group Lady Antebellum.

“The time is right to put together a multiplatform entertainment brand,” Lew Dickey, chief executive of Cumulus, said in an interview on Tuesday. “Country is at an all-time high.”

While country has been heard on some suburban stations over the years, the city has been without a country station since 1996, when WYNY changed to a pop format and became WKTU. The music industry has been pressing the big broadcasters for years to start a station to help promote country acts, whose tours sometimes bypass the city for theaters in New Jersey and elsewhere.

“We’ve been begging the major broadcasters to jump in with us,” said Scott Borchetta, president of the label Big Machine, whose acts include Ms. Swift, Tim McGraw and the Band Perry. “The market has changed so dramatically over the last 15 or 16 years since we’ve had a country station in New York City proper. I think our music is now in the best possible alignment with what can work.”

Variations on the “Nash” name will be used throughout Cumulus’s 83 country stations as well as its other country-themed media efforts, the company said. For example, Mr. Dickey said that Cumulus would start Nash Magazine, published by Modern Luxury, which will begin publication in the second half of the year. Down the line, he added, he wants to expand into video. “This will be the flagship of a national country brand,” Mr. Dickey said.

Cumulus operates a total of 525 stations, and is the nation’s second-largest broadcaster, behind Clear Channel Communications.

Broadcasters sometimes go to great lengths to keep format changes secret, and the case of Nash FM was no different. Cumulus assigned WRXP, the call letters of a former rock station, to the frequency, and over the weekend played a jumble of different formats to stir up interest while also cloaking its intentions to go country. (Next week the station will become WNSH.)

A success in New York could help propel Nash FM to prominence and draw new kinds of advertising. The market has nearly 16 million listeners age 12 and above, according to the ratings service Arbitron, and the city offers plenty of opportunities for promotional events, like concerts, that can be syndicated throughout Cumulus’s network.

New York may be the ultimate symbol of American urbanism, but it is a large market for country music. Last year, Nielsen said that more country albums were sold in the New York metropolitan area than anywhere in the United States — although as a proportion of all music sales in the region, New York ranks far below less populous areas in the South and Midwest.

With the fragmentation of media, country has been available to New York fans in plenty of other ways. Sirius XM Radio, for example, has six country stations, and last year it put on a concert for its listeners by Mr. McGraw at the Beacon Theater in Manhattan.

But music executives say that having a terrestrial station in the area will be a major help in selling concert tickets and promoting new music. The first song played on the new station on Monday was “How Country Feels” by Randy Houser, who performs on Thursday at the Mercury Lounge in Manhattan.

“It makes a statement that country music is strong and that country music is important,” said Greg Oswald of William Morris Endeavor in Nashville. “If you are willing to do it in New York City, then it’s saying everything that needs to be said.”

Even with country’s broad popularity, building a steady audience in New York for a genre of music that has been absent from the airwaves for so long might take time.

“If you look at the other major markets that have a successful country station — Boston, Philadelphia, Chicago, Detroit — those stations planted a stake in the ground and stayed with it, and now those stations are practically iconic,” said Mr. Borchetta, of Big Machine. “The country radio audience doesn’t spike. It grows in a beautiful, slow arc.”

Another challenge for Cumulus will be defining exactly what the country lifestyle means in New York.

“It’s an exurban lifestyle,” Mr. Dickey said. “It’s the five boroughs, the whole tristate area.”

He added, “We’re not just talking to people on the Upper West Side.”

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