Can Concert Promoters Become The New Record Labels?

from the time-to-find-out dept

A little over a year ago, the recording industry was surprised to learn that Madonna wasn't signing a new record label contract, but instead was signing a deal with Live Nation, a big concert promoter, to handle pretty much everything having to do with her business, including releasing new CDs. The WSJ Magazine is running a long feature story about Live Nation, its founder and its ongoing strategy, wondering if it's the new business model for the recording industry. Basically, the guy behind Live Nation knows that there's good money in concert promoting, but that the margins are low. So, he's betting on a few of these "360 deals" where he gets a much larger margin on all other aspects of the business.

It's an interesting strategy that appears to be a step in the right direction, but it's unclear if it really is the future of the industry. Live Nation's strategy seems pretty risky. It involves huge upfront payments for a small number of star performers (whose older, more well-known, music is still under the copyright of earlier labels). It also doesn't seem to do much to embrace new technologies and distribution methods. Instead, it's just this guy making a grab for some big names, and trying to consolidate all their sources of revenue, taking a cut of each one. There's something to be said for that, but it would probably work better in combination with newer technologies and music distribution means -- and without those huge upfront costs that may sink the whole operation.

Filed Under: 360 deals, business models, concert promotions, concerts, madonna
Companies: live nation