Live Nation versus Big Music
p2pnet news | Music:- How much more pain will the major labels be willing to endure (or put another way, “how much smaller will the music industry have to get”) before they finally abandon their historic business model?
That’s what Pali Research analyst Rich Greenfield is wondering, saying it’s not a question of ‘if’ they’ll change their approach to move into the 21st digital century, but ‘when’.
Madonna dumped Warner for Live Nation and that was one of the reasons he cited when he suggested investors might want to think twice before splashing out on Warner.
But what of Live Nation?
“We are sitting at the Live Nation analyst meeting in NYC and believe the most immediate takeaway is that LYV management has its strategic ‘cross-hairs’ directly focused on the record labels,” Greenfield posts today, going on:
Paraphrasing LYV’s Michael Cohl, ‘we are the record labels worst enemy.’ The comment was made after he highlighted that record label margins are low-mid teens, while touring margins are low-mid single digits; in turn, LYV is ‘happy’ to have a mid-high single digit margin on recorded music. The implication for WMG (and other labels) is that the margins are going down, above and beyond the rapid decline in CD sales.
Greenfield says Live Nation says it’s had “dozens of calls” from artists, “asking to partner with Live Nation (including the control of their recorded music business) following LYV’s announcement of an agreement with Madonna a few weeks ago”.
He adds:
“The recorded music is simply being thrown upside-down. The Eagles have sold nearly 1 mm copies of their latest album without a label (direct to Wal-Mart), Jay-Z would rather have his singles stolen vs. sold on iTunes (he only wants to sell albums), Madonna (and soon others) are leaving labels for touring companies, CDs sales are down north of 20% in Q4 2007, and piracy is growing rapidly (not to mention our fears for music publishing are growing as CD declines accelerate).
“At the same time, the music industry is struggling with if/when/how to transition to an ad-supported, community-based, DRM-free model.”
Warner Music’s Edgar Bronfman is, meanwhile, desperately peddling backwards, now saying iTunes is a good thing, not a bad one 
Also See:
Pali Research – Live Nation = Record Label Enemy, November 15, 2007
dumped Warner for Live Nation – Madonna abandons Warner Bros. Records, Ocgtober 11, 2007
reasons he cited – Message to Big Music: Music is free!, November 2, 2007
desperately peddling backwards – Bronfman sing`s iTune`s song, November 15, 2007
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November 15th, 2007 at 4:37 pm
This is my thoughts on how the war between the youth of this country and the music industry might come to terms.
It will work through p2p or out let systems, when you sign into the system, the person signing in must provide Email, age and gender.
The reason for this is when you start down loading free music, you will have to suffer through advertising first that is aimed at you age and gender, once you suffer through the advertisement you are free to download a clean quality download of that song you want, one commercial for each additional download, there is no need for any security on the disk because it is free. Advertisement pays for the download, gets their message to the target consumer. This will work with online radio stations, sign up to record their station, if you do not sign up you are not allowed to record. The advertisers are allowed to use the email address one time and then delete it unless the email address request more emails. There must be a simple on or off switch sent each time to stop the advertiser from sending more advertising after the first advertisement. The system starts over with each download. In short, the artist will be payed a flat fee each time they are downloaded. The artist with the skills to produce quality and quantity will be downloaded, played and payed more then ever before. This removes any reason to file share copyrighted songs, if something happens to your copy down load a new one. We as a nation need to bring this giant problem to a close, remove the clutter that has caused these problems from the laws.