'Music' Archive
I never thought I’d have anything good to say about a company that until recently was a cog in the machine of Clear Channel Communications, the radio monster that’s partly responsible for the popularity of so much bad music. So color me surprised that I find myself praising the wisdom of concert promoter Live Nation’s recent deals with U2 and Madonna, which could represent, if executed properly, an industry-wide shift in the music business model.
Last year, Live Nation (spun off from Clear Channel in 2005) inked a groundbreaking “360″ deal with Madonna under which the company takes over all facets of the Material Girl’s career. She gets about $120 million, and for the next 10 years Live Nation gets the recording rights to her next three albums, will handle all merchandise sales and the licensing of her name, and will promote her tours. Madonna’s old label, Warner Bros. Records, gets the right to weep over losing its contract with one of the world’s biggest stars.
If anyone thought the deal was a one-time fluke for Live Nation, that notion was buried this week when they signed a similar 12-year contract with U2 to take over the Irish rockers’ touring, merchandising, and digital branding rights. The U2 pact doesn’t include recording rights, which still live with label Universal Music Group, but as anyone who’s been paying attention to the music business can attest, sales of actual music are down and it’s increasingly the ancillary revenue streams that are pulling in the big bucks. (It’s like a bad divorce settlement: Universal Music got the house but Live Nation walked away with all the furniture.)
Live Nation is smart enough to realize that focusing solely on promoting concerts, or solely producing music in the case of the recording industry, is a one way ticket to bankruptcy. You simply can’t survive with a single revenue stream in today’s diversified markets. In the digital era, success will be defined by the ability to lump music sales together with $35 concert tees and $300 concert tickets, online advertising and merchandise sales on band websites, and licensing band names and images.
Live Nation appears to be a company that gets it and their continued willingness to take risks and sign big bands will serve them well. (Update: Shortly after posting this blog, news broke that Live Nation is on the verge of inking another similar deal with rapper Jay-Z, this time for $150 million.) Conversely, if the traditional music industry wants to stay relevant it would do well to wake up and smell the coffee by diversifying its business line into Live Nation’s core territory. It can’t sit on the sidelines and do nothing as it did with its refusal to embrace online music sales in the late ’90s, a blunder the industry continues to pay for. Only by dancing to a new tune can the music business shuffle out of its current mess.
I give Disney props for trying, but it is making a crucial mistake with Ultimate Band by purposely not creating a specialized guitar and/or drumkit controller, preferring instead to use the standard Wii controller. They’re selling that point as one of the game’s big advantages when it’s actually a detriment. Players of Guitar Hero and Rock Band don’t mind buying the “single-function peripherals” (in Disney press release-speak) needed to properly play the game, because those controls enhance the simulated experience of playing in a band. That’s the whole point. You’re supposed to pretend to be Eddie Van Halen nailing “Eruption“ or Neil Peart banging away on the cymbals to “Tom Sawyer.”
For those of you who don’t understand the appeal of these games or think they’re silly, well, you either haven’t played yet or don’t like Rock. There’s a reason that the numerous editions of Guitar Hero, and now Rock Band, are raking in the dough hand over fist and putting big smiles on the faces of Activision and MTV Games executives. They are more fun than you can imagine and as addictive as anything ingested by Keith Richards. (The brother-in-law of the guy who sits next to me at work actually gave up Rock Band for Lent and loaned my colleague his set-up for the holy duration. Now my co-worker’s addicted, too.)
But, I understand the skepticism. I resisted it for a while myself. I saw customers playing the demo models of Guitar Hero in Circuit City and thought they looked … well … stupid. But the more the Rock fan in me thought about the game — and since three years of guitar lessons in high school only netted me the ability to play AC/DC’s “Back in Black“ and Metallica’s “For Whom the Bell Tolls,” a limited range that proved not too band-worthy — the more appealing it looked. In the end, though, it took the Drunk Dude in Circuit City to convince me:
Larry stands in the video game aisle reading the back of Guitar Hero and contemplating its purchase. From behind him comes a loud, slurred voice:
“Dude, have you played it yet?”
Larry turns and looks at a disheveled guy with bloodshot eyes who smells of beer.
Larry: “No, still just checking it out.”
Drunk Dude: “Dude, stop reading the box, take it to the register, and buy it right … now. You’ll be playing it all night.”
Larry: “I don’t know, man. It seems kind of silly.”
Drunk Dude: “Dude, I thought so, too but I’ve been playing for a week straight and can’t get enough. Go buy it!”
So, I bought it, and I have to hand it to Drunk Dude. He was right. My wife, kid, and full-time job kept me from playing it as consecutively as he did, but for about a month I was rocking that PlayStation every chance I got. I’ve got the gnarled, carpal tunnel hand to prove it. Not to mention thousands of virtual fans of my band, Mangled Pita. I’m not giving up my console music career anytime soon. There are literally endless amounts of music to incorporate into future versions, and Guitar Hero is even creating editions based on single bands such as its coming Aerosmith version. This phenomenon is here to stay.
For those about to rock, I salute you.
Tweens rule! Well, they may be too young to actually run the country, but they’re an economic force to be reckoned with. While baby boomers are still playing their LPs and teenagers are furiously downloading digital music when they’re not texting each other — OMG! POS! — tweens are the only ones still buying CDs, bless their hearts. They made the soundtrack of High School Musical the top-selling album of 2006.
If you’re not familiar with High School Musical, you must not be spending much time around tweens. The made-for-TV movie premiered on the Disney Channel in January 2006 and has since become virtually an entire business segment within The Walt Disney Company. There’s been all sorts of merchandise tied to the HSM franchise, a sequel this year that drew 17.2 million viewers for its initial airing, and theater productions of the musical all over the country. (My daughter, now 12, and I saw the staging put on this summer by Zach Scott Theater in Austin; it’s coming back soon for a month-long run.)
HSM is just the most visible property among the original entertainment shown on the Disney Channel. The cable outlet has been building a massive audience of youngsters with such sitcoms as Lizzie McGuire, That’s So Raven, The Suite Life of Zack & Cody, and its newest hit, Hannah Montana.
Viacom’s Nickelodeon Networks unit is Disney’s biggest competitor for the tween market. Its made-for-TV and theatrical releases haven’t yielded a hit on the scale of HSM, but it’s contending strongly in the sitcom segment with such fare as Ned’s Declassified School Survival Guide and Unfabulous. Going head to head with the House of Mouse’s Hannah Montana (the story of a teenage girl who leads a double life as a pop-music star) is Nickelodeon’s new show, iCarly.
Like many such shows, iCarly is about apparently ordinary kids who quickly stand out for a particular talent or propensity. It’s the latest creation of Nickelodeon’s resident auteur, Dan Schneider, who also gave birth to such “Nick” staples as All That, Kenan & Kel, The Amanda Show, Drake & Josh, and Zoey 101.
The sitch of this sitcom is that BFFs Carly and Sam are inspired to start a weekly Webcast with the help of Carly’s adoring and nerdy neighbor, Freddie. The girls’ nemesis at school is Miss Briggs, a sadistic teacher (played by Mindy Sterling, best known as Frau Farbissina in the Austin Powers movies). The genius of iCarly could be its real Web site, iCarly.com, where kids can upload their own short videos that may be played on an episode. Whether or not the show helps generate any memorable Web videos, it just might succeed on its own due to star Miranda Cosgrove, previously featured as the creepily omnipotent little sister on Drake & Josh. I won’t say she’s the next Hilary Duff; she has the potential to be even bigger than Ms. Duff.
Where the Disney Channel and Nickelodeon differ is in commercials. Regular TV commercials for breakfast cereal, candy, and toys run rampant on Nick, while the Disney Channel saves its commercial breaks for its own promos and discreet sponsorship announcements like those on PBS. The Sept. 8 premiere of iCarly had, no exaggeration, 10 straight minutes of commercials and network promos right in the middle of the first episode. This must have been the kind of “creativity” and “freedom” the networks envisioned when Congress passed the Telecommunications Act of 1996 (or, as they call it at network headquarters, the We Can Show as Many Damn Commercials as We Please Act, which, of course, led to the founding of TiVo).
Disney and Viacom — they are coming for your children! Resistance is futile.
Large record labels have always been known for nickel-and-diming artists out of their share of album sales. (Yep, recoup’s a pain!) It’s only fitting that big labels would begin to tarnish once artists found ways to cheaply manufacture their CDs through companies like Disc Makers and secure independent distribution through companies like The Orchard, CD Baby, and Amazon. Indie acts aside, even more prominent artists like Radiohead and Moby have found liberation in going label-less.
As album manufacturing and distribution services become easier to obtain than blunts at a Snoop Dog event, live shows and merchandising booths become the ultimate key to an artist’s survival. So, bands may not need their labels anymore, but artist management and merchandise services are still a must. And after proving unable to extort money from iTunes and having trouble meeting CD sales targets, it’s only fitting to see companies like Warner Music and Universal Music buy their way into a piece of the live music action.
Warner Music Group has dropped $110 million for a stake in artist management firm Front Line Management. The company has also teamed up with Violator Management to form a joint venture called Brand Asset Group. According to the PR, “The Group is designed to increase revenue by more aggressively managing artist brands from all genres and capitalize on the value of those brands through corporate sponsorships, strategic and integrated marketing campaigns and comprehensive brand extensions.”
Universal Music Group has agreed to fork over nearly $90 million for UK-based artist management and merchandise firm The Sanctuary Group (home to James Blunt and Elton John). The company has also bought into Loud.com, a social-networking site aimed at the urban music enthusiast.
These are actually smart moves by Warner and Universal. I’ll never complain about a company diversifying its holdings — especially when it is working in a tumultuous industry. As long as their focus remains on the balance sheets, they may find the revenues needed to make up for the CD sales slump.
Sting may no longer be able to hit the high notes when he croons “Roxanne.” Still, he and his fellow Police-men will be richer than many Third World nations by the time their current reunion tour wraps up this fall.
Hard as it is to believe, it is not 1983. The Police, Genesis, Squeeze, Crowded House, Def Leppard, and Pink Floyd’s Roger Waters are but a few among the pantheon of aging rockers selling out arenas and concert houses the world over this year. More than ever, these elder rock statesmen — and women (hat tip to The Pretenders) — are proving a bigger draw among ticket buyers than younger whippersnappers like John Mayer and Wilco. How can it be that these guys are still scissor-kicking their way to the bank after all these years?
The concert industry loves its dinosaurs, bands from the ‘60s and ‘70s that continue to gobble up the summer tour market year in and year out. While artists once made two-thirds of their income from record sales, today about two-thirds of their income comes from concert tours, according to London trade group Music Managers Forum. In North America alone, ticket sales have jumped from $1.7 billion in 2000 to $3.1 billion in 2006, says industry tracker Pollstar.
Ticket prices certainly have something to do with that rise. The best seat in the house at a Police show can run you $900 (the band’s entire oeuvre can be purchased on CD for less than $100). Of course people are more than willing to pay because it was a tour that was never supposed to happen. They’re not the only ones raking in the dough, though. Genesis tickets are going for a cool $225.
It certainly begs the question how well the concert industry will fare once these rockers hang up their axes for good. However, with the likes of Van Halen and Led Zeppelin reportedly mulling their own reunion tours, the industry is showing no signs of a mournful refrain.