Remaking Wu

Last year 31-year-old Staten Island, N.Y., native Robert Diggs made what he called a pilgrimage to China. After being forced from Tiananmen Square for displaying a self-promotional billboard, Diggs took to the hills. To be specific, he ascended Wu-Tang Mountain, where according to legend — his — he was received by kung fu masters at several monasteries. As Diggs exited a Shaolin temple, he says, a crowd of several hundred children awaited him. He proceeded to communicate the only way he knew: by rapping. "They didn't speak English, but I blew their minds, and they all came asking for autographs and pictures," says Diggs, who, under the pseudonym RZA, is the leader of rap's Wu-Tang Clan. "That's how it goes in China; they may not sell our records in Beijing, but kids in the remote areas have our discs bootlegged before they're released in the States."

That's how it goes with Wu-Tang Clan: part musical sensation, part myth. And this is its paradox: a branded marketing juggernaut, instantly recognizable in remote corners of the globe, but not quite able to convert its wide appeal to the mainstream. With its latest album, "The W" (see review), RZA hopes to harness the band's market power to better management to restage the Wu brand and set the Clan on a new growth phase.

RZA (pronounced rizzuh) is the driving force behind the group's eight-year rise from Staten Island's housing projects to mini-entertainment conglomerate. He and his brother Mitchell Diggs, a.k.a. Divine, form a New York street answer to Richard Branson. RZA is the potty-mouthed artistic visionary who speaks in streams of consciousness about his plans for global corporate domination. Divine, who keeps to the business side, is the soft-spoken older brother who is constantly trying to bring order and professionalism to the company.

The Wu brand was born in 1992, when the group became an underground sensation by developing an urban-gangster-as-warrior persona based on old kung fu movies (RZA's passion). Wu-Tang has since evolved into a hybrid of Pokemon and Dungeons and Dragons, prepackaged for suburban teens and complete with video games, comics and, coming soon, animated films. It's all embodied in Wu-Tang's stamp of approval: a Batman-like chubby W.

Early in the game, RZA convinced his fellow rappers that if they put their solo careers on hold, they'd share in a giant pot of gold via the vagaries of corporate synergy. He was right. The Wu-Tang brand blossomed under an unprecedented 1993 contract the band signed with Loud Records (Sony owns a 49% stake) that allowed each member to branch into solo projects on other labels. Every few years the group pulls together for an album, thus raising each member's visibility and bolstering the branding strength of Wu-Tang, Inc. They then launch a new crop of Wu-branded products. The cycle repeats. It resembles a concept called the virtual corporation, in which a company maintains just a small core and outsources everything else. During a three-year hiatus since their 1997 record-setting double album "Wu-Tang Forever," the group's Wu-Wear clothing line hit $15 million in annual sales, a new Wu comic-book line briefly nudged out X-Men for the top spot in the country, and its first kung fu video game sold 600,000 units for Sony PlayStation. Six Clan members recorded successful solo albums.

While all this may sound good — by 1998 Wu-Tang, Inc., was grossing more than $25 million a year — RZA, Divine and Oli Grant, the band's corporate brain trust, feel the group has spread itself too thin. "A few years ago, I told my brothers [fellow Clan members] that the W is gonna be like the Mickey Mouse ears," says RZA. For brands trying to be cool, though, ubiquity can be a bad thing — just ask Gucci. The W began showing up on too many things, while the band hardly showed up at all. It got to a point where the whole group assembled only once a year. And getting together even that often looks impossible since last month, when Clanster ODB, who faces a host of drug and weapons charges, became a fugitive from justice in L.A.

Still, Divine and RZA are cracking the whip like senior execs, with Divine trying to get the group to begin acting as a formal board of directors. The plan is to hire managers to run the business and keep the chubby W on only the handful of products that the entire band endorses. RZA says the non-at-large members now "see each other at least three times a week, with everybody aware of everything we're doing."

This type of transformation isn't easy for hip-hop performers, RZA admits, noting, "We've had accountants quit on us saying, 'I can't take it. I don't know if I'm gonna get punched in my face if I f___ up.' It's not that we're gonna punch someone in the face; it's just that we talk different from them and they take it the wrong way."

The band has taken other steps to be more corporate — all part of a plan, says RZA, to go public within five years (if the WWF sells on the N.Y.S.E., why not Wu?). Last year it bought office space in midtown Manhattan. It also owns property in New Jersey. Next year the group plans to buy a small film studio, a tie-in to its newest venture, Wu-Tang Filmz, which aims to produce big-budget movies.

There's the larger question about whether this form of mini-media conglomerate can survive. The artist-as-mogul trend (see Puff Daddy and Madonna) has had a bumpy ride. Whether or not Wu-Tang winds up challenging the media giants, and whether or not the world domination thing pans out, the band has built something it may be able to live with. "Sometimes I wake up and say, 'Man, we came from nothing and look at what we've got,'" says Diggs. Clearly, he's seen the mountaintop, and he likes the view. Now send up the accountants.