Following British band Radiohead’s proclamation of independence from record labels, closing its affiliation with EMI Group, it is now Madonna who is giving the cold shoulder to its recoding company of 23 years Warner Music.
Radiohead decided to go solo, releasing its latest album Rainbows through its own Web site and let fans decided how much to pay for the songs. Madonna is about to sign a 10-year deal, worth of $120 million, with Live Nation. The deal involving cash and stock give the the concert promotion company three albums, still to be produced, and exclusive rights to promote the Material Girl’s concerts and market her merchandise.
Here are the general terms of the possible agreement: $17.5 million and advance payments for three albums of $50 million to $60 million and $50 million in cash and stock for the right to promote her concert tours.
Reported first on The Wall Street Journal’s Web site yesterday, the deal signals how tides are shifting in the music industry. Tanking CD sales alone no longer cut in the music industry. Recording labels and concert promoters are now striving for deals that include everything that can bear the artist’s brand – from albums, to publishing to merchandising to endorsement fees.
Following to The Wall Street Journal breaking the news, major publications followed the story, which was rumored first over the summer.
Now, others music artits are following suit, putting record labels, already hurting, in an even more dangerous zone. According to The New York Times, the band Eagles is selling its new album directly to Wal-Mart stores. And the Telegraph reported that band Jamiroquai and Oasis are considering doing the same. Last month, Warner’s stock fell as low as $9.41 –– almost 66 percent bellow its high mark of $27.24 in November 2006.
Meanwhile, Life Nation, a spin off from Clear Channel Communications, is trying to morph into a full service music company since getting just 10 percent of ticket revenues will make ticket sales alone a hard bet to generate return on the investment, even considering that Madonna makes more money on her tours than on her albums (her 2006 “Confessions” tour grossed $194 million).
Wait and see a horde of Madonna branded products might be the way to make it out for the investment. Get ready for a batch of ringtones, fragrances, concert video downloads, features on wireless carries, etc…
Undeniably, though, there is no shortage of optimism around the music industry, and why not mention, aging-effect reversing techniques. Keep in mind that when that marriage between the protein blonde and Life Nation ends, she will be pushing 60!
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