Since reporting Monday that Nine Inch Nails had dumped its record label and was to offer future albums direct to the public, Oasis and Jamiroquai have also joined the move away from the record industry, but the biggest announcement of all is news today that Madonna has dumped the record industry.
According to reports, Madonna has signed a $120million deal with L.A. based concert promotion firm Live Nation to distribute three studio albums, promote concert tours, sell merchandise and license Madonna’s name.
Whilst the deal differs from Nine Inch Nails in that Madonna is not offering direct-to-public albums, Live Nation isn’t a record company. 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.
The only real question now is how fast will the music industry model come tumbling down. When Radiohead led the way in offering their music directly to fans many predicted that the move was the beginning of the end; Madonna may well be the tipping point from where we will now see a flood of recording artists dumping record labels and where todays model will shortly become a footnote in Wikipedia.
I love her music! … amoung other things.
http://fakestev...er.blogspot.com
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.
The record labels won’t go away. Artists still need the financial support from the big guys.
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.
Alaska
they still aren’t a record company, no matter how much you want to spin the news.
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.
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.
@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.
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…
@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.
Radiohead didn’t lead the way. This lot did: http://www.xfm....e.asp?id=485685
Doesn’t Madonna own her own record label, Maverick?
Wait, didn’t she already release an unprotected MP3 before?
http://www.thes...lash1.html?yhnw
My how times do change.
Alaska
) 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.
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?
@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.
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.
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
Stupid!
I hope Radiofed can pull it off. F clear channel – wont listen to any artist affiliated with the communist regime.
Its not the people downloading illegal files the RIAA has to worry about, its their own artists
Is it really a sign that the industry is crumbling down if the leaders are bands that were all popular ten years ago?
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.
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…
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.
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.
Madonna – Radiohead = Its all a numbers game.
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.
sounds like a record label to me.
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 ?
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
@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.
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.
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.
Duncan – I don’t see it in this case.
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.
Duncan – You are fired!
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…
@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.
@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.
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
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.
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.unsp...hat-stupid.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.
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.
… along with Radiohead releasing their online only album today and allowing listeners to pay whatever they want for it.
Can anyone say R A D I O H E A D? Geez, they started this whole thing!
The labels are dying, times are changing, help us keep track of it all…
http://www.reco...ryfreemusic.com
Thanks
Tai
The record label castle is gonna get crumbled pretty soon. The question is what’s the next castle gonna be like?
Information wants to be free and music is just another type of information.
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.
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.
1929 stock Market crash = 2007 music artist defection from “record labels”