Madonna Leaves Warner For Live Nation

[The One]

Good News For People Who Like Bad News (For Record Labels): Madonna Leaves Warner For Live Nation

People's head spun when Radiohead announced their little experiment in the tip jar release model, and although terms and details of a proper CD release remain to be seen, the past week's been a parade of major label artists (sort of) following suit: Trent Reznor announced his long expected break (http://www.stereogum.com/archives/nine-inch-nails-go-completely-label-free.html) with Interscope et al, Oasis and Jamiroquai are rumored to release their next efforts free and online (http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2007/10/09/nradiohead108.xml), and today comes news of Madonna's attempt to drive a nail in the record label's coffers:





Via Wall Street Journal (http://online.wsj.com/article/SB119205443638155166.html?mod=googlenews_wsj):In the latest seismic shift to rock the music industry, pop superstar Madonna is close to leaving Warner Music Group Corp.'s Warner Bros. Records for a $120 million deal with concert-promotion giant Live Nation Inc., according to people familiar with the deal. Madonna still has another studio album left to deliver with Warner Music.

The 10-year pact with Live Nation, of Beverly Hills, Calif., would give Madonna a rich mix of cash and stock in exchange for the rights to sell three studio albums, promote concert tours, sell merchandise and license her name.The fact that a concert promoter like Live Nation is set to land the deal rather than a traditional record label like Warner Music is a sign of how quickly the landscape is shifting in the cratering music industry.Traditionally, acts like Madonna would release their recordings through a major record label and then make separate deals for touring and merchandising with other companies. Now, however, a range of players in the music business -- labels, concert promoters and even managers and ticketing companies -- are eager to make broad deals that give them a larger piece of the pie by participating in revenue streams such as endorsement deals between artists and advertisers, as well as the sales of concert tickets and merchandise.The Journal reports Madonna's deal specifics: a $17.5M advance, advance payments on the new albums set at $50M and $60M. Also, Live Nation's anteing up $50M for the right to promote her concert tours. Meanwhile, Madge has managed to retain the industry standard 90/10 split on the concert gate.

As far as marketable major label artists, Madonna's up there. So you have Madonna on the big-fish side, Radiohead on the innovator side ... is this the end of the labels scheme?

Put another way: If she isn't the straw that'll break the label's back, which artist needs to come out and go the non-label route to call it a technical knockout?
One thing's for sure: It isn't a fun time to work for a major.

source: http://www.stereogum.com/archives/good-news-for-people-who-like-bad-news-for-record.html

[The One]

Live Nation's $120M deal lures Madonna

By VINNEE TONG, AP Business Writer


NEW YORK - Madonna's $120 million recording and touring contract with Live Nation Inc. gives the concert promoter the opportunity to tap into concert, recording, merchandising and other lucrative revenue streams. But don't discount the role that lowly ticket fees play.

The pop superstar's deal to abandon Warner Music shows how far Live Nation is willing to go to break the hammerlock Barry Diller's Ticketmaster has on online concert and sporting ticket sales.

Ticket buyers may be annoyed by the $5 or more in convenience and delivery fees tacked on to every ticket ordered online or over the phone, but they've proven to be a gold mine for Ticketmaster, a unit of IAC/InterActiveCorp.

Regulatory filings show that Ticketmaster's revenues jumped 14 percent to $1.1 billion in 2006 and generated almost a 25 percent operating profit margin for the nation's largest seller of tickets.

Live Nation, whose 160 venues include House of Blues and Fillmore locations, Nikon at Jones Beach in New York and London's Wembley Arena, currently is Ticketmaster's largest single generator of ticketing fees. But Live Nation has signaled it wants to bring the fee revenue in-house when its Ticketmaster contract expires in 2008 for most of its locations and in 2009 at the House of Blues venues.

Live Nation Chief Executive Michael Rapino has made no secret of his desire to use the company's relationships with artists to get into related businesses. He has talked about selling T-shirts, parking passes, VIP party passes, secondary tickets and DVDs as well as broadcasting shows live. And gaining direct access to fans through ticket sales is seen as a crucial building block to collecting other profit related to the event.
Rapino said Live Nation owes its window of opportunity to the rise of the live show as a profit driver — instead of the records and CD sales as in previous years. "Thankfully for our business, the center of that pie has really become the live show now," he said in September at a Goldman Sachs conference.

The possibility of having Live Nation as a competitor drew a bring-it-on response from Diller, chairman and chief executive of IAC, whose holdings also include the HSN home shopping network as well as Internet businesses including LendingTree, Citysearch, Evite, Match.com (http://us.rd.yahoo.com/dailynews/ap/ap_en_mu/storytext/madonna_live_nation/24793164/SIG=10i7s249b/*http://Match.com) and the Ask.com (http://us.rd.yahoo.com/dailynews/ap/ap_en_mu/storytext/madonna_live_nation/24793164/SIG=10gl4k8il/*http://Ask.com) search engine.

"We've invested hundreds of millions of dollars in our infrastructure. Let someone else make these investments and get into ticketing," Diller said at a New York conference in September. "It'll be good for us and interesting for them."
About 22 percent of all event tickets are now sold online and they are expected to generate sales of $4.9 billion this year, according to Jupiter Research retail analyst Patti Freeman Evans.

But a greater number of sellers won't automatically translate into lower prices or fewer fees for customers, she said. That's because tickets are not wholly commoditized, and sellers who tack on bonuses like limousine rides, dinner or other goodies are aiming to capture a segment of the market from customers willing to pay more, Freeman Evans said.

Among the top shareholders of Live Nation, based in Beverly Hills, Calif., is L. Lowry Mays, founder of Clear Channel Communications and its CEO for 30 years until 2004. Mays owns 5.4 percent of the company, according to Capital IQ, a unit of Standard & Poor's.

For its part, Ticketmaster has made its own moves to get closer to the fans. It has bought fan management Web site Echo Music and music sharing Web site iLike.com (http://us.rd.yahoo.com/dailynews/ap/ap_en_mu/storytext/madonna_live_nation/24793164/SIG=10idi73n7/*http://iLike.com), as well as artist management company Front Line, which includes in its portfolio the Eagles, Christina Aguilera, Aerosmith, Jimmy Buffett and Paris Hilton the singer.
"There's a whole host of things we've been engaged in and organizing and thinking about for the past year," Diller said last month.

Madonna's management told Warner Music Group Corp. last week that the 49-year-old pop singer would accept Live Nation's offer after the record company refused to match the deal, a person familiar with the confidential contract negotiations told The Associated Press on Wednesday.

Under the proposed deal, Madonna would get a signing bonus of about $18 million, an advance of about $17 million for each of three albums, stock, and an agreement for Live Nation to exclusively promote her tours.

To try to fend off the Live Nation deal, Warner pursued a partnership with Ticketmaster that would have enabled the record company to offer a spectrum of touring services to Madonna, the person said.


Diller is no stranger to the world of Hollywood. He's credited with the creation of Fox Broadcasting Company and the network's motion picture operations. He also spent a decade as head of Paramount Pictures Corp., as well as working at ABC Entertainment.

Meanwhile, the rise of a secondary market for tickets has brought new players to the industry, including eBay subsidiary StubHub and Tickets.com (http://us.rd.yahoo.com/dailynews/ap/ap_en_mu/storytext/madonna_live_nation/24793164/SIG=10k1v0evq/*http://Tickets.com), which is owned by Major League Baseball's Advanced Media LP.

StubHub is on track to sell its 10 millionth ticket in a matter of days, spokesman Sean Pate said. This year alone, it should sell more tickets than the total of all tickets sold in the years since it was founded in 2000. Last year, its biggest yet, StubHub sold 3.3 million tickets. In February it was bought by eBay.
As a reseller, StubHub and others are taking over what used to only be done by scalpers on the street.

Ticketmaster, which sells tickets for promoters, sports teams and venue owners, is less free to pursue the secondary market since any reselling activity should not infringe on the profit-seeking of its clients, whose main goal is to accurately price tickets the first time around in order to maximize profit.
Still, Ticketmaster hopes to push back against the rapid growth of StubHub with its own resale service, called Ticket Exchange, and Ticketmaster Auctions. As of mid-2007, Ticketmaster reports a 130 percent increase in the number of tickets sold through Ticket Exchange and a 59 percent rise in the number of online auctions conducted.

source: http://news.yahoo.com/s/ap/20071012/ap_en_mu/madonna_live_nation;_ylt=ArV6nKcymJwkxamuwmJ4lYYE1 vAI

[The One]

It’s official!

Madonna is leaving Warner Brothers Records and signing a new deal with concert promoters Live Nation for a reported $120 million.

Confirming the news on Tuesday, the Queen of Pop released the following exciting statement:
“The paradigm in the music business has shifted and as an artist and a business woman, I have to move with that shift. For the first time in my career, the way that my music can reach my fans is unlimited. I’ve never wanted to think in a limited way and with this new partnership, the possibilities are endless. Who knows how my albums will be distributed in the future? That’s what’s exciting about this deal — everything is possible. Live Nation has offered me a true partnership and after 25 years in the business, I feel that I deserve that.”
This is why we love her! Her Madgesty is always ahead of the curve!

In regard to Madonna’s relationship with her current label, she says, “My time with Warner Bros. Records has been great. I appreciate their hard work and value the many relationships I have developed over the years with the label in the U.S. and around the world. I have an album coming out with them next year and I’m excited about it. We still have work to do together.”


Madonna Joins Forces With Live Nation in Revolutionary Global Music Partnership
LOS ANGELES, Oct. 16 - Live Nation’s President and Chief Executive Officer, Michael Rapino officially confirmed today that Madonna has entered into an unprecedented global partnership with Live Nation and will become the founding artist in its Artist Nation division.

“The paradigm in the music business has shifted and as an artist and a business woman, I have to move with that shift,” commented Madonna. “For the first time in my career, the way that my music can reach my fans is unlimited. I’ve never wanted to think in a limited way and with this new partnership, the possibilities are endless. Who knows how my albums will be distributed in the future? That’s what’s exciting about this deal — everything is possible. Live Nation has offered me a true partnership and after 25 years in the business, I feel that I deserve that.”

“Madonna is a true icon and maverick as an artist and in business,” stated Mr. Rapino. “Our partnership is a defining moment in music history. I am thrilled that Madonna, who is also now a shareholder in our company, has joined with us to create a new business model for our industry. Bringing all the varied elements of Madonna’s stunning music career into the Artist Nation and Live Nation family, moves her future and the future of our company into a unique and extraordinary place.”

The first-of-its-kind partnership between Madonna and Live Nation encompasses all of Madonna’s future music and music-related businesses, including the exploitation of the Madonna brand, new studio albums, touring, merchandising, fan club/web site, DVD’s, music-related television and film projects and associated sponsorship agreements. This unique new business model will address all of Madonna’s music ventures as a total entity for the first time in her career.

Arthur Fogel, Chairman of Live Nation’s Global Music Division and Chief Executive Officer of Global Touring, who has produced the artist’s last three worldwide tours with the company which generated close to $500 million in the last six years commented, “Madonna is without a doubt one of the most fiercely original artists in history. It is a great opportunity for Live Nation and Artist Nation to build upon our years of success with Madonna as a touring artist.”

Artist Nation was created to partner with artists to manage their diverse rights, grow their fan bases and provide a direct connection to fans through the global distribution platform and marketing proficiencies that have made Live Nation the world’s largest live music company. Headed by the division’s Chairman and Chief Executive Officer, Michael Cohl, Artist Nation has significant infrastructure in place to execute additional revenue streams including recorded music, merchandise, studios, media rights, digital rights, fan club/website and sponsorship divisions.

Joining with Artist Nation to work with Madonna will be Live Nation’s unmatched global distribution platform and artist-to-fan-reach, including over 80 offices in l8 countries, over 200 national and local sponsorship personnel, over l60 venues, access to over 35 million fans that attend well over l0,000 shows that Live Nation produces, promotes and/or hosts each year for over l,000 artists including fan access via Live Nation’s growing database of over 25 million fans.

“I’ve been fortunate enough to work with Madonna for half my life. She has always encouraged me and set a great example for me to push the boundaries to reach our full potential. This partnership exemplifies just that,” commented Madonna’s co-manager Guy Oseary.

Angela Becker, Madonna’s co-manager added, “The partnership and vision for the future that Artist Nation along with Live Nation presented to us assured me that this is the ideal home for Madonna. It is with great trust and optimism that we collectively move ahead together.”

In regard to Madonna’s relationship with her current label, the artist commented, “My time with Warner Bros. Records has been great. I appreciate their hard work and value the many relationships I have developed over the years with the label in the U.S. and around the world. I have an album coming out with them next year and I’m excited about it. We still have work to do together.”

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