It’s official. Madonna is leaving Warner Music Group (WMG) in favor of Live Nation in a long-rumored landmark deal said to be worth $120 million. In exchange for the concert promotion company’s participation in a number of revenue streams, including recorded music, merchandise, ticket sales and the Madonna brand, the artist will get equity in Live Nation, plus a huge chunk of change.Many analysts think Live Nation (LYV) overpaid for the deal, and as far as monetizing Madonna herself, they’re probably right.
But Live Nation has to be viewing this in a much larger context, hoping that having Madonna as the charter artist in their “Artist Nation” program will give them credibility to sign up other entertainers, both established and up-and-comers.Fox (NWS) used this strategy in 1994 when, as a then-upstart network, they won the rights to broadcast the NFL. It put them on the map, allowing them to win affiliate stations and subsequently increase their reach.
Viewed through this lens, the premium Live Nation is paying is basically coming out of their A&R budget as they compete with the labels, who are themselves trying to horizontally integrate by doing 360-degree deals.So the battle has been joined. I would expect a major talent agency will try to elbow in on this turf as well — after all, isn’t that what Live Nation is essentially doing?
For artists, it’s good news, as it only adds to the ever-growing number of ways in which they can make a living, whether via the traditional recording labels, live events companies such as Live Nation, or even by going direct, like Radiohead (though I would submit that they’re the exception that proves the rule).
[Raghav “Rags” Gupta is VP of Consumer Services & Partnerships at Brightcove, where he has worked since ‘05, prior to which he was a senior executive at Live365. His blog can be found at www.ragsgupta.com . The views expressed here are personal and do not necessarily reflect those of any Company with which he is or has been affiliated.]
Very interesting article. I think the music business as we know it is on the way to morphing into an unrecognisable multi-faceted beast, and on the whole, as you say, I believe it will benefit the artist long-term. The net has helped many artists take control of their destinies, directly communicating with their fan base, or even making EXACTLY the music they want to, knowing it may sell less, but that they’ll have a bigger piece of the pie. This way of thinking has filtered down to some labels. The one my next release will be on for example; Angel Air records. Their by-line is “Where the Artist has a voice” Quite simply, without the support of this kind of “hands-on” label my project with SAXON’s Graham Oliver would never see the light of day. I see my own music sales via internet growing in tandem with this. The bottom line is, the outlay is small, making it low-risk.
I think this is a clear sign that we are reverting, for better or worse, to the agency/studio centralized model of talent management more popular in yesteryear America and other parts of the world today. In Japan, for example, the agencies manage and monetize every aspect of the exposure by their actors/musicians from albums to TV appearances to photo shoots to concerts. Certainly there are economies of scope associated with this model, but the endgame ultimately takes away control from the performers themselves and fans as well.
Ticketmaster bought Irving Azoff’s management company.
I don’t know if it’s necessarily true that Live Nation overpaid for her. She makes around $100 million when she does a tour. They get the rights to three studio albums and it’s a contract for 10 years. Sounds like a good deal to me. The woman is a legend.
She is one of my favourite singer .. anyway I think she lost a bit in last two/three years… Anycase for me is still one of the best!