And The Walls Came Tumbling Down: Madonna Dumps Record Industry

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1. Steve Ballmer
   

   October 10th, 2007 at 9:28 pm

   I love her music! … amoung other things.

   http://fakesteveballmer.blogspot.com

2. The Business of Software
   

   October 10th, 2007 at 9:33 pm

   As the world rushes towards free digital music, maybe the only thing left for artists is live performances.

   Good news for some, not so good news for others.

3. Deals and Coupons
   

   October 10th, 2007 at 9:38 pm

   The record labels won’t go away. Artists still need the financial support from the big guys.

4. Alaska Miller
   

   October 10th, 2007 at 9:38 pm

   Live Nation is a Clear Channel spinoff, with a list of controversies. To say a popular recording star going from one big corporation to jumping into bed with another big corporation is the death knell for the music industry is bit disingenuous. Live Nation has plenty of technology in its portfolio to make and produce records. What’s to say within 5 years they don’t become a record company as well? This is just then a matter of semantics: |big corporation / record company| pays artist, artist makes music, |big corporation / record company| sells music.

5. Duncan Riley
   

   October 10th, 2007 at 9:40 pm

   Alaska
   they still aren’t a record company, no matter how much you want to spin the news.

6. Israel LHeureux
   

   October 10th, 2007 at 9:42 pm

   Hurray for Madonna– she’s figuring that she can make more money this way. And she’s probably right.

   But, does this have anything to do with the marginal cost of reproducing digital songs approaching $0.00? Not really. Does it mean that she will give away her music for $0.00? I wouldn’t bet on it.

   Instead, hopefully it means more flexibility in pricing and new distribution options. All things that should bring MORE money into the industry. And that, as I have been arguing, is the best thing for fans.

   So if you love music, don’t rally around FREE. Instead, rally around more music, with more prices, more ways.

7. Brendan
   

   October 10th, 2007 at 9:48 pm

   Alaska,

   One would suggest that compare one huge corporate to another as though all are the same is an extremely simplistic point.

   Not all artists are going to want to self-manage their portfolio and the Record Industry as it stands has proven time and time again it cannot move with the times.

   Bands are looking for alternatives - who they eventually turn to doesn’t mitigate that artists are none the less starting to force the issue.

8. Alaska Miller
   

   October 10th, 2007 at 9:52 pm

   @Duncan

   A record company fronts money to artists and promotes the artists’ work. Live Nation gave Madonna 120 million in exchange for 3 albums, concert tours, and merchandising. That sounds like a record deal.

   Nine Inch Nails and Radiohead released albums online and asked for money online. That sounds like usurping record companies.

9. Andy Thompson
   

   October 10th, 2007 at 9:57 pm

   I worked for Live Nation at its “birth” and up until this summer, and can vouch for the fact that it definately is a concert promotion company with record label motivations. It already is the worlds largest concert promoter (don’t forget that the real dollars are made on artist’s live performances) and any other piece of the pie that the company can get ads a rediculous amount of value. Radiohead’s situation is different in that they now have the final decision in terms of record release, promotion, etc. Madonna is already a powerhouse, and now she will in all likelyhood earn a bigger share of the revenue than she would at a typical label, but all that changes is a different side of the business can earn make a bigger cut off of her success. Maybe this is the future: the touring/live promotion companies own the artist, and they earn their keep solely on dwindling album sales…

10. Alaska Miller
    

    October 10th, 2007 at 10:01 pm

    @Brendan

    But in this instance, the two corporations that went into a bidding war over Madonna are so similar. Live Nation sells records of live events and promotes concerts. Warner Music sells records of pre-recorded sessions and promotes artists via concerts. So what has really changed in the status quo?

    I don’t quite get your second point though. If artists don’t want to self manage then representation is done through record labels. So true, record labels aren’t reacting fast enough, so wouldn’t the competition in this case be other record companies who get it? Is there NO record company that understands how best to sell records for artists?

    I don’t think that’s the case. I think the case at hand is that no one has the $121 million dollars to hand over to Madonna. But Live Nation has 120 million and they won out on a 3-record deal with her.

11. Jamie T
    

    October 10th, 2007 at 10:01 pm

    Radiohead didn’t lead the way. This lot did: http://www.xfm.co.uk/article.asp?id=485685

12. Hashim Warren
    

    October 10th, 2007 at 10:02 pm

    Doesn’t Madonna own her own record label, Maverick?

13. jr
    

    October 10th, 2007 at 10:07 pm

    Wait, didn’t she already release an unprotected MP3 before?

    http://www.thesmokinggun.com/a......html?yhnw

    My how times do change.

14. Duncan Riley
    

    October 10th, 2007 at 10:07 pm

    Alaska
    I think it’s better put as a distribution deal as opposed to a record deal. They might have aspirations of becoming a record label (as commenters suggest) but they aren’t at the moment. The point still is that you no longer need a record label to sell music. In future there is no reason why marketing companies, or even tech firms (Google music anyone? ) couldn’t take the place of record companies as distribution managers for those who don’t want to go it alone; and I’d note that not every musician will want to go it alone either, but they now have a choice other than the record labels.

15. Alaska Miller
    

    October 10th, 2007 at 10:12 pm

    @Duncan,

    Granted I hate RIAA as much as any kid, but it’s kind of odd to say that way of the future is musicians to sell music online and point to evidence such as Madonna being paid $120 million for a “distribution” deal (I still think this is what record labels do).

    Maybe if the news item was Madonna starts up new website to sell un-DRMed MP3s and tickets to her own concerts, then yeah, we’re getting to the point where record companies are obsolete. But that wasn’t the news item. It was just about a rich old lady becoming richer because one big corporation outbid another big corporation. Nothing about that has proved to the little guy that things are changing.

16. Armand Morin
    

    October 10th, 2007 at 10:18 pm

    It’s all about distribution. Many artists certainly want to earn more income from their efforts. Tim McGraw owns his how label, but they are more or less an artist development deal which when they find an artist, they panhandle them to the big labels.

    The country music industry has seen much of this happen over the years. Country music artist Neal McCoy started a label then folded over lack of funding. One artist who has made their own label work is Toby Keith. He certainly has the fan base to work it.

    Unlike the Madonna deal, Toby Keith actually runs it’s own label.

    This distribution deal is certainly key. Even though artists may want to go it on their own, they still have to contend with getting exposure. For Madonna this is a no brainer. With LiveNation being a Clear Channel company the exposure is certainly still there with plenty of airplay.

    Which still brings us to the whole payola deal. Even if artists go it alone, they still have to get heard. Yes, the net is an intrigal part, radio is still a main stay to get exposure in many markets. Clear Channel definately owns this space and for just any artist to get airplay is almost impossible.

    We will still have to wait how it all turns out.

17. Jay
    

    October 10th, 2007 at 10:45 pm

    Artists do not need record labels anymore. They need online and wireless marketing experts.

    Or people who understand wired and wireless communication and technologies…

    Good news. Tumble away

18. real estate investor
    

    October 10th, 2007 at 10:47 pm

    Stupid!

    I hope Radiofed can pull it off. F clear channel - wont listen to any artist affiliated with the communist regime.

19. Roy (Listolia.com)
    

    October 10th, 2007 at 10:51 pm

    Its not the people downloading illegal files the RIAA has to worry about, its their own artists

20. Henry
    

    October 10th, 2007 at 11:14 pm

    Is it really a sign that the industry is crumbling down if the leaders are bands that were all popular ten years ago?

21. SLaguana
    

    October 10th, 2007 at 11:14 pm

    As probably the only person posting on this blog that has signed a major label record deal as an artist (and apologies if I’m wrong), I hope you will consider my two cents.

    Alsaska is right. There is no substantial difference between LiveNation and a major label record company at this point, except that LiveNation is probably worse. They both invest money promoting and acquirting musicians. The key difference is LiveNation has a clearer vertical channel since the parent corporation owns the radio stations, the venues, the promotion of the venues, and now wants the recorded music itself. Some people would call that a monopoly, or pretty damn close to it.

    Anyways I don’t fault Madonna for wanting to be on the good side of the monopoly, but it’s definitely not a “fuck you” to the industry. It’s the exact opposite. Meet the new boss, same as the old boss.

    Duncan you don’t really have a grasp on the music industry, and it shows every time you write about it. If they are spending money putting out records, and in this case they are spending a lot of it, then they are a record label. A “record label” after all, is just the name for the brand you give your music promotion efforts.

    Oh, and Jamie T, we gave our record away in 1997. Exact same model as Radiohead… tip us whatever you felt was fair. But yeah the Charlatans were first…. sigh.

22. Prince Was First Not Radiohead
    

    October 10th, 2007 at 11:33 pm

    Prince was actually the FIRST artist to dump the record companies and have music fans “subscribe” to his music over the Internet from a website he created to do this even before P2P was big. I doubt radiohead was even born at this time…

23. Mark (UK)
    

    October 10th, 2007 at 11:37 pm

    If, as many people have pointed out, this means that artists will only be able to make the big bucks by liver performances, this move could be an even bigger win.
    Just imagine all those manufactured bands that rely upon studio wizzardry to make them sound good trying to pull it off live.
    If this spells the beginning of the end of the record industry, great. If this means the end of Simon Cowell and his stable of Justin Timberlake and Mariah Carey wannabes, even better.

24. Steve McMurray
    

    October 10th, 2007 at 11:45 pm

    This is important news from the standpoint that recording contracts are merging with performance contracts. Up until now, record labels largely kept their hands off the concert revenues because album sales were significant. Now, more and more of these distribution deals will combine recording, distribution and performance. Whether this is a good thing is another topic, but I agree with Alaska that with this deal, Live Nation becomes a part of the recording industry. This is probably a good thing (new blood in the industry is much needed), but to suggest that Madonna has ‘dumped the record industry’ is just not accurate.

25. real estate investor
    

    October 10th, 2007 at 11:58 pm

    Madonna - Radiohead = Its all a numbers game.

26. Earth is shrinking like dry sun
    

    October 11th, 2007 at 12:00 am

    Forgive me… Madonna is aging stardom, very successful musician, with tons of money, and married young man.

    Sometimes people are getting too old to listen to Madonna. It makes your face turn into prune juice. Even young children who listen her music will turn into raisins.

    If you gone back to 1990s, madonna was hype and wasn’t overrated… But today, it’s overloaded… She married… She’s got everything…

    Forgive me… She bores me…
    I don’t know what’s killing the hype.

27. Michael Arrington
    

    October 11th, 2007 at 12:00 am

    sounds like a record label to me.

28. Louis-Eric
    

    October 11th, 2007 at 12:33 am

    Studios provide talent, teams, recording studios and staff, promotion and distribution. Today’s news is great news for struggling artists everywhere; if you have a) you own top-quality team, b) access to the best recording studios, staff and talent, and c) a recognized name worldwide, you can buy your promotional and distribution services piecemeal. Woohoo. Wise business, but I don’t get how this applies to all recording artists; if it doesn’t apply to all or most recording artists, then that’s hardly news heralding of new times. All it does (once one stops reaching for a favoured thesis and looks at the facts at hand), is tell of the emergence of boutique services replacing in some instances large integrated suppliers. Changing business, yes; end of business, no.

    What does this specific deal have to do with Web 2.0 ?

29. Duncan Riley
    

    October 11th, 2007 at 12:40 am

    Michael
    it’s not a record company. Even if it wants to be it shows that the barrier to entry into music distribution has been broken. Indeed, how bout TC Music? It’s now that easy

30. Alaska Miller
    

    October 11th, 2007 at 1:09 am

    @Duncan,

    That’s a ridiculous assessment. If this was Amie St. breaking the news, then yes, I will agree wholeheartedly that the door has been busted. But it’s not. It’s a big corporation paying 120 million dollars for a record deal. Nothing is changed except the door’s got a new lock.

31. Dev
    

    October 11th, 2007 at 1:46 am

    You guys are forgetting the fact that in developing countries which is a large untapped market and rising developing countries like India and China there is a low level of internet penetration when compared to developed countries and many don’t have fast internet connections.
    For such areas the good old cd’s and yes at times even tapes is the way forward. It will be years before easy digital downloads become reality.

    I think the best way forward will be for the artist to have a buy album link on their websites and the artist’ company itself create and send the music to the comsumers house. (They can have a deal with a local logistic company and even a company that will print and burn cd’s cutting down on cost of having to send the cd all the way from the US). This way you don’t need a fast connection and you have a cd which you can play in your audio player or car.

32. Duncan Riley
    

    October 11th, 2007 at 2:17 am

    Alaska
    why exactly? the tech barrier has been broken, and for a long time this has been the driving force behind the record industry. This might be a deal with a big corporation, but its a deal that is outside the record industry: that in itself is proof that the record industry monopoly is being broken.

33. Michael Arrington
    

    October 11th, 2007 at 2:27 am

    Duncan - I don’t see it in this case.

34. Duncan Riley
    

    October 11th, 2007 at 2:45 am

    Michael
    It’s not a record label: if you follow the Live Nation lead you could be a music distribution company via TechCrunch: the message is that anyone can now be a music distribution point, not just dedicated record labels.

35. Michael Arrington (Fake)
    

    October 11th, 2007 at 3:23 am

    Duncan - You are fired!

36. Washer
    

    October 11th, 2007 at 3:38 am

    Funny how it took years of a HUGE record label pushing these artists into the public space for them get to a point safe enough to consider leaving “the industry” (but I agree they are actually just tweaking themselves a bit and are still going to monster companies)

    We act like these artists are heroes but the industry has made them famous (and rich). They owe their notoriety to the big bad label. Big promotion and marketing is still needed and they are going to sign on with someone to do that.

    I wonder what Madonna’s royalty percentage is for album sales…

37. Wil
    

    October 11th, 2007 at 4:20 am

    @Duncan

    The major difference between WB and LN is that LN is WB w/out the record label part. WB is both a record label and a distribution company. To say Madonna is dumping the old model is not completely accurate. The 1/2 old model is still there; she is basically taking the music production (i.e. recording, mastering, hiring writers) in house, and outsourcing the distribution (i.e. sales and marketing).

    What Maddona is doing is a positive step forward, but definitely not as dramatic as what Radiohead did.

38. amorson
    

    October 11th, 2007 at 4:58 am

    @Duncan
    You can call the company producing and promoting the 3 albums a pudding factory, that doesn’t mean it’s not acting as a record company.

39. Jon
    

    October 11th, 2007 at 5:07 am

    For established acts, as you mentioned, this makes sense but for those trying to break into the industry… I believe the record labels may still be the only way for many to achieve any level of success. Just being able to download music for free doesn’t mean you will be successful globally like these acts have been. If anything, this will make it that much more difficult for bands in the future because the number of fish in the pond will grow exponentially.

    Jon

40. anu
    

    October 11th, 2007 at 5:17 am

    Actually, in some ways, this seems even worse than signing for a record label. An oft-heard justification for the existence of record labels is that they use (some - proabably tiny percentage) the money generated by successful acts to pay for al the acts that don’t make it (and for A&R etc).

    I’d be surprised if Live Nation spends any money on A&R or subsidising upcoming bands. Cherry picking the top (selling) talent, and the rest can go rot.

    How this has *anything* to do with Radiohead and NIN is beyond me. Duncan Riley says in comment 34 than ‘anoyone can now be a music distribution point’. Which is pretty much the same situation as yesterday, last week, and last year. Of course, to be a successful distributor, it helps if you have channels (radio stations and stadiums) to market the product (Madonna in this case), and some money ($120 million) to convince the product that you are the right guy.

    So the idea that barriers to distribution have disappeared overnight is a little silly and naive.

41. Bruce Warila
    

    October 11th, 2007 at 5:56 am

    I have actually been bullish on Warner. I thought they had the secret sauce to move forward. Warner should have been able to match this deal with revenue coming from other sources.

    Over the last month, I have written on my guesses for Warner’s direction..

    In my post “Buy Warner Music - They Are Not That Stupid” I talk about how consumers are spending more time than ever listening to music, and record labels need the machine that reconverts time back into green money.”
    http://www.unsprungartists.com.....tupid.html

    Madonna should have been an important cog in the new Warner machine. Look CBS just paid $35 per pair of eyeballs for DotSpotter. How much is a Madonna Fan worth? 30 Million fans (at least) worldwide times $35 each - that’s a billion dollar acquisition.

    Warner’s failure, and the failure of all of the majors to convert their rosters into revenue is mind blowing.

42. Andy Roberts
    

    October 11th, 2007 at 5:59 am

    I think the head will contiinue to re-adjust itself in the way that Madonna has found, but the body of the beast is in the process of being eaten alive by its own long tail.

43. juliaroy
    

    October 11th, 2007 at 6:52 am

    … along with Radiohead releasing their online only album today and allowing listeners to pay whatever they want for it.

44. Self Proclaimed Music Business Expert
    

    October 11th, 2007 at 7:04 am

    Can anyone say R A D I O H E A D? Geez, they started this whole thing!

45. Tai Kahn
    

    October 11th, 2007 at 7:20 am

    The labels are dying, times are changing, help us keep track of it all…

    http://www.recordindustryfreemusic.com

    Thanks
    Tai

46. Richard Miller
    

    October 11th, 2007 at 7:24 am

    The record label castle is gonna get crumbled pretty soon. The question is what’s the next castle gonna be like?

47. Robert
    

    October 11th, 2007 at 7:25 am

    Information wants to be free and music is just another type of information.

48. PJ at Knowing Art
    

    October 11th, 2007 at 7:32 am

    Madonna is annoying. Anyway, when you think it over the Radiohead stuff is no big deal, especially when you consider we have downloaded free music online since the 1980’s, 20 years late to the party. Also you got to give Myspace some credit for connecting the fans and keeping them informed.

49. Peltaire
    

    October 11th, 2007 at 7:34 am

    People are another type of information. The sooner we recognize each person as a company, a shared stock holder in many others, I predict that we will see this trend socially and inside the realm of medicine and education.

50. Todd
    

    October 11th, 2007 at 7:48 am

    1929 stock Market crash = 2007 music artist defection from “record labels”

51. Pierre Col | UbicMedia
    

    October 11th, 2007 at 7:50 am

    madonna is just moving from a label company to another, nothing comparable with Nine Inch Nails or Radiohead moves !

52. Record Industry Insider
    

    October 11th, 2007 at 7:53 am

    LiveNation is a concert producer and promoter. The money is an advance against future sales (over 10 years). They have a return on capital of 1%, deal like this increase it to over 100%.

    Artisits will be giving their music free to lure in fans to pay for concert tickets which will be their primary source of income by doing this LiveNation is thinking ahead and making the money on back end.

53. PJ at Knowing Art
    

    October 11th, 2007 at 7:59 am

    “the industry has made them famous”

    Depends on what you listen to.

    I’ve never heard Radiohead played on the radio, or at a concert, yet I’m familiar with Tom Yorke and Radiohead. Another popular band I enjoy sometimes, Ladytron, I found through Myspace. But the best music I find through Last.fm. The last time I heard anything surprising on the radio was when I was a kid and I heard Thriller.

54. Generic Guy
    

    October 11th, 2007 at 8:02 am

    @(fake) Michael Arrington. LOL

55. Universal Constructors
    

    October 11th, 2007 at 8:06 am

    Hey, we Universal Constructors have been giving away our trip-hop and ambient dub music for free online for nearly 10 years now…

    Yeah, we’re not world-famous, nor have we had a huge record deal to tear up but our mp3s have been downloaded in their tens of thousands over the years and we get plenty of people who take time to let us know they’ve enjoyed our tunes. That’s enough for some musicians …admittedly, ones with day jobs…

    Sorry if this comes across as self-promotion, but it’s not like we’re doing it for the money. Just our egos.

56. Record Industry Insider
    

    October 11th, 2007 at 8:08 am

    This is model of the future for the music (recorded) industry.

    1. Put the FREE music on GRUUVE http://www.gruuve.com.
    2. Let users syndicate and build a user base.
    3. Monetize user base by signing deals with a touring company like (LiveNation).

    Backdrop
    1. Declining costs of production and distribution (less capital required upfront)
    2. The web is more efficient at identifying the gravitational points in the long tail. Use those metrics to build a touring base.
    3. More people will be served and more money will be made by the touring companies.

57. Andrew
    

    October 11th, 2007 at 8:12 am

    There is something here - Live Nation produces concerts, this is where the overwhelming bulk of revenue comes from for artists. Madonna has agreed to a 3 record deal - with DRM free music? we don’t know yet, but if they use the music as a tool to promote the live events this could be a pretty big deal. We could be seeing Madonna music bundled with everything in the near future for free.

    Duncan is right.

58. Rob Blatt
    

    October 11th, 2007 at 8:21 am

    It doesn’t say how they’re going to distribute the music. That could be very important. Very easily Line Nation will make back it’s investment in Madonna in their first tour together, so the studio albums are only promotion for the tours.

    Live Nation could easily turn around and say “We’re going to distribute the records online for free”. If they pay $80 million per album recorded and recoup nearly $200 million from the tour, the album’s sales are nothing in comparison. They could promote, distribute and manufacture millions of CDs and still come away with over $100 million per album/tour.

    Live Nation might not be creating a record label in the traditional sense, they might be redefining what a record label is.

59. Rob Blatt
    

    October 11th, 2007 at 8:23 am

    @myself.

    That doesn’t count licensing Madonna’s songs and non-tour related merchandise either. There are more millions to make there.

60. Matt
    

    October 11th, 2007 at 8:39 am

    Duncan, sorry you got pwned by Alaska. I read every comment in this thread and it’s clear he’s right, you’re clinging to a silly shred of your original argument in the original post. Sorry just giving some constructive criticism, you don’t want to hear it but he’s right. There’s no applecart being upset by Madonna’s announcement today. On the contrary there there ARE a lot of bloggers going for exaggerated Armageddon headlines to pull in readers without the context.

61. Louis-Eric
    

    October 11th, 2007 at 8:43 am

    @47: People like you always raise that half-quote as mantra and implicit conclusion; how about you go read Brand’s actual quote ? It goes like this (and is far less absolute and conclusive than you make it out to be):

    “”Information Wants To Be Free. Information also wants to be expensive. Information wants to be free because it has become so cheap to distribute, copy, and recombine—too cheap to meter. It wants to be expensive because it can be immeasurably valuable to the recipient. That tension will not go away. It leads to endless wrenching debate about price, copyright, ‘intellectual property’, the moral rightness of casual distribution, because each round of new devices makes the tension worse, not better.”"

62. Pierre Col | UbicMedia
    

    October 11th, 2007 at 8:59 am

    Information does not want anything by itself, guys.

    What do we want the information to be ? free or controlled ? free or paying ? closed or shared ?

    Music is art, cinema is art, it is far more than “information”…

63. Ricardo
    

    October 11th, 2007 at 9:01 am

    don’t forget the Smashing Pumpkins, they’ve released an album only online

64. Bill
    

    October 11th, 2007 at 9:19 am

    Like Radiohead, Madonna is an artist who has had the benefit of years of those “evil” major label dollars promoting her music. She used their resources and connections to build a brand. Unlike Radiohead, Madonna is on the tail end of her hit making career and is more of a live act than a sensational recorded artist. This deal makes sense for her.

    Very few artists have the resources or acumen to build a career to this level on their own. So as “talent incubators” labels still have a place- they provide the money and the bodies necessary to create brand ubiquity for an artist.

65. Robin Barooah
    

    October 11th, 2007 at 9:21 am

    The recording industry is obviously losing mindshare amongst the public, because people are recognizing how antisocial some of its activities are and major artists are now setting the example of doing without it. Clearly the artists mentioned don’t need financial support, so an interesting question to me is - what about those who do need financial support?

    Isn’t a band very much like a modern internet startup? In the old days (of 20-30 years ago), if a young person wanted to write software, it was hard to do so without the financial support (and equipment) of working for a major corporation. Now, a few credit cards, 6 months of savings, or someone like Paul Graham can be enough to make a hit.

    I can imagine something similar emerging within the music industry - perhaps some established artists will mentor and (financially) support talented newbies, with the responsibility for distribution staying with the artists. Obviously musicians can do ‘consulting’ in the form of live performance and session play as another way to pay the bills incrementally.

    I think this could bode well for the ultimate quality of available music because of the potential for mentoring relationships between actual artists rather than newbeis being groomed by marketing execs.

    On the other hand I’d also expect to see a lot of ‘me too’ stuff produced because it’s easy and cheap (just like we see in web2.0).

66. phenom
    

    October 11th, 2007 at 9:35 am

    she is old, and her style does not appeals to most of the younger generation….who cares

    http://vidsonly.blogspot.com

67. Record Industry Insider
    

    October 11th, 2007 at 9:39 am

    Royalty & Licensing model are broken. Music is a commodity business today.

68. Gary King
    

    October 11th, 2007 at 9:40 am

    I think the smart thing here is that Duncan didn’t call Madonna a washed up act But seriously, this is a great move for the industry. I don’t know why some of the comments here call Madonna as unappealing to a younger generation, but as part of that generation myself, I think that her music is still popular among us today. Her latest album, released in 2005, broke the world record for the number of #1 debuts in the most countries, so I think the market has pretty much spoken.

69. Isaac
    

    October 11th, 2007 at 9:57 am

    This blows my mind.

    Does this mean that the RIAA wont have any Record Companies to represent in lawsuits against piracy?

    Will Madonna and others Join the RIAA individually?

    With no big shot record execs, who will young singers date/marry when they want to boost their careers?

70. Chris
    

    October 11th, 2007 at 10:18 am

    If you go over to their website under careers, it is apparent that they are gearing up to distribute music digitally.

    No, artists would not join RIAA individually.

    It is almost as if live nation is going to be acting as a surrogate record company, which I think is a mistake. From a consumer stand-point, I don’t want to have to remember that Madonna is signed with Live Nation to purchase her music. Either sell it direct from her site or through the number 3 music distribution point, iTunes.

71. Marcello
    

    October 11th, 2007 at 10:26 am

    Yup, I gotta agree with Alaska and other comments on this site. If LiveNation is going to distribute Madonna’s albums and give her $120 Million for the privilege, then LiveNation is now a record company.

    There’s no question that the music industry is evolving, as it always has been. But the vast majority of the music sold in the marketplace is still manufactured, promoted and distributed by trans-national multimedia conglomerates. It doesn’t look like that will be changing anytime soon.

72. Louis-Eric
    

    October 11th, 2007 at 10:38 am

    #70 That’s a good point; balkanization of sales points making it harder to find content. That’s one thing megasellers like iTunes and large brick & mortar stores have going for them; finding the latest album I want (say, Bjork), isn’t a project unto itself; I can just go in on my way to work, take a few minutes to pick it up, and be back on my way in no time. Same with iTunes. Acquisition isn’t frictional; my time is worth more than the eschewed savings, so I’m happy to pay more for the convenience. If I need to google an artist to find out who is selling their wares, I also have to wonder which of these companies I never heard of is the real thing, and which are scams. Store brand recognition and trust association matters.

73. Jeffrey Alexander Brathwaite
    

    October 11th, 2007 at 10:42 am

    I commend both Radiohead and NIN and I do hope more artist will by pass the Mega Record companies. Remember how some of the Rap Artist like Too Short and Master P started by selling their tapes out of the back of their cars. Master P became a millionaire selling both his tapes and his videos through direct channels. Just think if he had used the power of the Internet back then. Oh an please don’t forget the girls from TLC who sold 10 million records one year and because of the deal they signed with the record company they were still BROKE.

74. m3mnoch
    

    October 11th, 2007 at 10:42 am

    hmm. i thought musicians paid record labels to distribute their music. to that same thought, musicians pay promoters to promote their music.

    this sounds like they are hiring madonna to perform in concert to me. kinda like how movie studios hire actors to perform in movies.

    m3mnoch.

75. Stacey Ross
    

    October 11th, 2007 at 10:50 am

    Can we meet somewhere between Alaska and Duncan? This isn’t revolutionary, but it’s hard to deny that it bears some subtle news for those of us who are eagerly awaiting the downfall of the RIAA.

    People keep harping on whether or not this music deal suddenly turns Live Nation into a record label. The implication being that, if they are just a label, this is no different from the status quo. I think this implication is false, or at least could reveal itself to be false in the near future.

    What is important is whether or not this “fledgling record label” becomes a member of the Culture Cartel that is the RIAA, or even begins to behave like a member.

    For instance, if Madonna is able to retain full copyright ownership as a part of this deal and is merely licensing her music for distribution (a question I have not seen an answer to yet), then that is worth noticing. It would be even more interesting if such a deal were obtained by a less noteworthy artist, but this is still moving in a good direction.

    This doesn’t have to be a matter of “it’s all over” or “it’s status quo.” There are interesting things happening here regardless.

76. Matt Wright
    

    October 11th, 2007 at 11:19 am

    The post states: “The deal shows that even for a world famous act, a record company is no longer required in the days of digital downloads and P2P music sharing.”

    I would change that “even” to “especially” — Madonna, Radiohead, NIN are in a wholly different position than most other artists out there, seeing as they’ve already benefited hugely from the traditional record label machine. Your “even” here implies a fundamental oversimplification and misunderstanding of the situation, as is evident in so much of the vague and giddy music industry analysis the tech world seems so eager to hand out right now.

    I also agree with other commenters’ observation that what Madonna is doing is entirely different from what Radiohead and NIN are doing (mainly, she’s not self-releasing).

77. mdnet
    

    October 11th, 2007 at 11:42 am

    Why is it important? Because a major artist is showing that there is no money to be made in the traditional ’sell records’ sense. Her true money is going to be made during tours now and Live Nation is foremost a tour company. Hell they could give the music away, it’s all pirated now anyway, they are going to cash in on selling Madonna tickets to her tours.

    Remember, she set a record for her last tour as the highest grossing female act ever, in the 100’s of millions. When was the last time selling an album made that kind of money?

    It is a house of cards, and Duncan is correct. If selling tickets to a live show can generate 100 million+ dollars, and selling a record label album can generate 20 million dollars and that number is going down down down, it makes sense for an artist to leave the labels and sign to live promotion companies.

78. Fran Taylor
    

    October 11th, 2007 at 12:04 pm

    First!?!?! Negativland was giving away music on the Internet before most of you even heard of it. Get your facts straight.

79. Andrew
    

    October 11th, 2007 at 12:34 pm

    Whether Madonna hires a professional company to help her with distribution of her music, or she does it herself like RH, NIN, BareNakedLadies etc., is irrelevant. She is using her music/art/IP as a tool to generate a community to market to rather than for revenue. This is a fundamental shift in the industry. I am surprised there are so many naysayers her, especially since this is a web 2.0 blog where most of the companies features are in a give a free version monetize the userbase model. It remains to be seen if Madonna is going that route as well.

    If this music is DRM free, and freely available through indirect channels there is an inarguable trend emerging that artists are going it alone.

80. sputnick
    

    October 11th, 2007 at 12:37 pm

    In countries with a lot of piracy, such as the Philippines or India, where you just can’t make money from record sales, this has been the standard model for entertainers for a looooooooooooooong time. The developed world is finally catching up with the real world.

81. Mitch Reisendorf
    

    October 11th, 2007 at 1:02 pm

    The Internet has challenged the whole notion of paying for music. The main reason for buying a record was to hear your favorite songs whenever you wanted to as oppose to only when it came on the radio. The Internet allows you to do so with the endless amount of options from the artist page on myspace to the music blogs, music message boards, internet radio, etc…At no cost. If you leave your computer then the I-Pod serves as your ultimate “interchangeable, interactive compilation album”. The Internet has also broken the marketing monopoly (radio/mtv) that was dominated by the major labels so the hype machine is there but has little effect on the targeted audience. The majors will still be around (mostly due to their valuable catalog) but will not lead the way in creating the new stars and classic records as their business model is in direct conflict of the “do-me” era the Internet has ushered in. Soon things will calm down (after one has access to all his favorites but find it difficult to get their hands on good NEW music) and the demand for the proper online business infrastructure will increase and then we will see the right innovation needed to finally push the music business into the 21 century

82. Rod
    

    October 11th, 2007 at 1:41 pm

    It’ll be a long time until the model crashes, too much of a norm to change, and too much shit pop/rnb music making big bucks for them to lose money anytime soon.

    http://roddotnet.blogspot.com

83. mark slater
    

    October 11th, 2007 at 2:16 pm

    If that is not a record label deal then i dont know what is.

    Live has become increasingly important to artist in the wake of the explosion of the ‘record label’ model. What live nation is doing is leveraging their newly imposing position in the value chain to impose a label model on the consumer of that womens content. they will be doin frictionless scrobbling of your Itunes to learn what music you like, inform you of the next show of the artist (just like tourb.us) try and impose some social tools on you and hope you end up buying the content (which ofcourse will be DRM’d) and that is their achilles heal.

84. Erick Schonfeld (fake)
    

    October 11th, 2007 at 2:41 pm

    @35 — I second that. Why do we still have this joker on the payroll? This is the reason Business 2.0 went down the tubes. Lousy stories, not related to topic, with faulty premises.

85. David
    

    October 11th, 2007 at 3:01 pm

    Can we just agree that this article is much to do about nothing?

    Yes it is amazing that a major artist elected to bypass the labels but, we are only talking semantics here.

    Radiohead and NIN are P2P and that is interesting. Madonna is just newsworthy because of the $$$.

    Also, Live Nation’s live concert margins are terrible. They desperately need to re-develop their strategy. And, as this deal indicates, becoming a label is one way to do that (although margins are not much better here)

86. Gig Production Industry Insider
    

    October 11th, 2007 at 6:15 pm

    I earn much of my living as a lighting tech, sometimes working in ClearChannel venues and I’d back everything the Recording Industry Insider has posted.

    Oh, and bear in mind that the total value of ticket sales has to cover the cost of ticketing agencies, hire of venues (nice one, CC!) let alone the cost of shipping huge quantities of expensive kit around the world. And the wages of, erm, the family of crew to make it all work.

    LiveNation is not a record company. But they’re still a bunch of b*stards.

87. James
    

    October 11th, 2007 at 7:18 pm

    Duncan, Michael et all…

    We all seem to believe this is the begining of the end, made all the more delicious by the fact that, at least on the surface, the labels have been caught napping on this issue and will now reap the consequences.

    But the truth is, the labels have most definately not been napping. Instead they have been simply fortifying the areas of music where this new movement will have very little impact… namely hip hop (or rap or whatever you may want to term it).

    You see, for acts markets such as this, where image is just as important as musical content (in some cases even more!) the record industry is still an all important and feared god. In these genres, the labels act as more of a bank or credit facility to the artist. Take 50 cent, without his exotic cars, giant houses, pimped out tastes and impossibly prosthetic bimbos attached what is he? Nothing! And where does all this finery come from? You cant seriously believe that, whilst he may make a fairly decent pay day from royalties, he could afford even half of all the accoutrements we constantly see surrounding him. No, he doesnt own jack! The label does (or in this case the parent label of the label that owns his own label, confused?).

    So, bearing this in mind tell me, how do you remove the labels from one of the most popular forms of music worldwide and still maintain the image that has brought it to this position in the first place? The “bling” would dry up pretty damn fast!

    Recording labels are ready for this, as much as we are ready to tear them down (and rightfully so!) it cannot be said that the end is nigh. Just a slight change in course for a few well established rock monsters.

88. Alice C.
    

    October 11th, 2007 at 9:16 pm

    I live in the USA, am the same age as Madonna. I haven’t heard a single pop song I would pay one penny in the last ten years.

89. Richard
    

    October 11th, 2007 at 10:14 pm

    The Record Companies came to power by controlling the means of reproduction, and more importantly the distribution channels for their physical goods. Then the distribution channel changed. Now they have lost power because they have not tried to build a new distribution channel, leaving that up to others like Apple. They deserve their fate.

    The interesting idea from this discussion is that Record Labels still have a role in marketing new music. While that may be so, it will be a very different, more difficult and less profitable business than the old one.

90. Arch Stanton
    

    October 12th, 2007 at 11:16 am

    Let me just say that NIN, on their brilliant new release Year Zero, put the entire new release on nin.com in streaming format to listen to, to your heart’s content before purchase. How many ‘artists’ out there (including Madonna if I may stretch the definition of ‘artist’ ) would be willing to do that? To me that was the beginning of the end(pun unintentional…really), as the modus operandi of the recording industry has been one or two good songs to get you to purchase…then you find out those are the only 2 good songs on the damn thing.

91. ex-employee
    

    October 12th, 2007 at 11:59 am

    Good luck Madonna, if it wasn’t for leftover Clear Channel money and ozzfest, Livenation.com would have sunk under the weight of its VP’s ego’s by now.

    They think they’re going to be able to take on Ticketmaster in a year or two (when their ticketing deal with TM expires) but it took them over a year to implement user registration and profiles. What a joke!

    On the other hand, Live Nation ticketing and promotions own a bunch of venues so that side of the business will remain profitable.

92. Negativland
    

    October 13th, 2007 at 12:02 am

    To partially quote Shakespear: The fault is not in our stars, it’s in ourselves. If music consumers now can and will acquire the music they want by bypassing any form of payment, all artists are in trouble, but especially the grass roots emerging variety and all those who happen to pursue artistic innovation rather than mass popularity. If we scare away this ocean of potential artists and innovation by expecting the music to be free for the taking, we will be left with only corporately produced art of one kind or another.

    Touring is NOT the answer for many - I HATE touring! Studio work is where the creation occurs and studio work is what needs to be economically supported in the life of independent artists, or there wont be any except for the already independently wealthy. Music becomes a great hobby for the rich.

    Any obsession with who is desparately exchanging one multi-million corporate deal for another is irrelevant to the main cultural problem at hand - HOW CAN WE SUPPORT THE PRODUCTION AND ENCOURAGEMENT OF NEW, INDEPENDENT, AND UNKNOWN MUSIC WHEN THE RESULTS ARE NOT BEING PAID FOR?

    The Internet has miraculously solved half the problem (the potential for independent distrtiuubution) but the situation is only half baked to date. Voluntary donations simply don’t cut it because the vast majority of consumers simply wont do it. Try it and see. We desparately need new ideas on how to get efficiently paid on line for making music. Itunes’ pennies per track can only actually benefit those already mega-famous artists who can sell several hundreds of thousands of tracks there. For emerging unknowns and the experimental, a few sales on Itunes wont even pay for the electricity used to make the work.

    I yearn for a more useful discussion here and everywhere concerning how to actually set up the Net to support the economic viability of an individual’s independent music.

    Here’s one idea: The Net can be made to track anything. All music put up on line might be registered with a new ASCAP/BMI type Internet royalty organization. When every computer user pays their server fee, a miniscule “art usage” tax is included. All music downloads on line are free, but the net tracks ALL registered music downloads (only that a track has been downloaded, not who does it) and the server “art usage” tax is distributed to those who have been downloaded according to these individually tracked download numbers. Very similar to what BMI now does for radio play (now accomplished with far less accurate radio play tracking than the Net could do for downloading). A tiny tax on all worldwide server users would be a huge amount of money to distribute for the “use” of all music on line, and pay per track could be significantly more than pennies.

    One remaining problem if we attempt to keep the downloading privacy of the user: How do you prevent an artist from downloading his/her own work a million times?

    Time is wasting. More actual ideas and less rich celebrity gawking, please!

93. Tom
    

    October 13th, 2007 at 2:15 am

    My mouth waters as I consider the demise of Hilary Rosen and her ilk, the RIAA mafia who decided that suing twelve-year-olds for “theft” was a good idea. Now, finally, the content providers (musicians) are coming on board. It’s time to find a new distribution mechanism that leaves the middle men in the mire of shit they have themselves excreted.

94. Ti Piace - Madonna
    

    October 22nd, 2007 at 11:27 am

    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!

95. David
    

    October 22nd, 2007 at 5:05 pm

    Interesting move by these artists. It seems like they’ll be the ones to benefit from the changing music industry, not the labels. They understand that they should be the digital trend, but ride it.

96. Rae Dawn
    

    November 3rd, 2007 at 12:05 am

    Madonna will forge ahead regardless of trends and opportunists that cling to her she has been doing this for a long time and will probably always have the last say to her next move …she is one off the top 6 richest music makers on the planet and is speedy and up to date on all the latest high tech.She also came up hard on the streets of New York and plans to stay in touch with what is going on …Music is a tough industry and I admire some of her gut and bouncing back and facing the critics the way she does.And she has stayed pretty clean I wish her well I hope she remembers her fans and the the other musicians out there who paved a way for her to keep jumping…

97. A.P.
    

    November 5th, 2007 at 8:05 am

    As pointed out this move may boil down to nothing more that clear channel was the only company to give Madonna the money she thinks shes worth - after all anyone with half a mind can see all the shallow platitudes she made to hype and keep her career alive in the past were blatant lies since she is arrogant,greedy,selfish and materialistic as she ever was.Since she lives most of her life in upmarket London now she has long lost any touch with the street and as she still values her opinions over others this has been blatant in her music for years - “Ray of Light” will easilly be remembered as the last good record she ever made. I imagine her comercial decline worldwide will follow that in the US - and not a moment too soon for such an anachronistic POP dinosaur.

    RE Radiohead as usual with this band they are the essential “Emperors New Clothes” idea put into practice. The whole download their new album for your choice of price was just the usual cynical sad promotional stunt as any teenyboper boy band.Why? The very album that was available for exclusive download is now going to be given a full priced physical conventional release after all the promotion via media hype from the novelty of the download… :rollseyes:

    @94 Ti Piace . Excuse me but what has your opinion about Madonna as a singer got to do with this thread?

98. eric gaultier
    

    November 9th, 2007 at 8:55 am