The Art Of Speculation
Jillian Cohan has written a piece for The American, “The Show Must Go On”. In her opening, she addresses a fundamental issue that many aren’t catching on to.
Aging acts account for most of the music industry’s live performance revenue. What happens when these acts are gone?
The music industry is banking on concert revenue. Live performance is the driving wheel of the “new business model”. The top dog concert promoter, Live Nation, is getting much press from it’s aggressive approach, spending huge money to tie up major acts and venues.
Even so, belief in the touring business was so strong last fall that Madonna signed over her next ten years to touring company Live Nation—the folks who put on megatours for The Rolling Stones, The Police, and other big headliners—in a deal reportedly worth more than $120 million. The Material Girl’s arrangement with Live Nation is known in the industry as a 360-degree deal. Such deals may give artists a big upfront payout in exchange for allowing record labels or, in Madonna’s case, tour producers to profit from all aspects of their business, including touring, merchandise, sponsorships, and more.
So, the various revenue streams are all tied to live shows.
While 360 deals may work for big stars, insiders warn that they’re not a magic bullet that will save record labels from their foundering, top-heavy business model. Some artists have done well by 360 contracts, including alt-metal act Korn and British pop sensation Robbie Williams. With these successes in mind, some tout the deals as a way for labels to recoup money they’re losing from downloads and illegal file sharing. But the artists who are offered megamillions for a piece of their brand already have built it through years of album releases, heavy touring, and careful fan-base development.
So, the key to the Live Nation model is established touring acts. How do you sustain that model? Obviously, these big concert promoters like Live Nation have some type of plan to develop new talent to carry the torch, after the wrinkle rockers all head to the happy hunting ground, right?
This is what Live Nation CEO, Michael Rapino said earlier this year.
“We don’t want to be in the business of pouring tens of millions of dollars into unknown acts, throwing it against the wall and then hoping that enough sticks that we only lose some of our money,” he said. “It’s not part of our business plan to be out there signing 50 or 60 young acts every year.”
So, the plan is; go with the sure thing and in a few years, if something else develops into a sure thing the, we’ll jump on the bandwagon. A hands off approach to development, to speculation.
I don’t know how this all washes out. My best guess is, the huge spectacle type of show that is the bread and butter now, will become a thing of the past.
Would that be a bad thing?
When you pay money to go see a performer, one reason you do is because you know they are going to put on a good show. Another factor is, the body of work. If a performer has a good batch of songs, that you are familiar with, you don’t mind spending a few dollars. But, if the act only has one song that you are aware of, even if it’s a great song that you love, you aren’t going to be nearly as willing to part with your dollars.
Back in the old days, a lot of concerts were package shows, where new artists would play the one song that people knew and, maybe another tune then, the next act would come on. But, those shows were generally put on by labels that were working with a number of new acts. Now, the concert promoter is the label and, they aren’t interested in signing new acts.
You can compare the old package show to the current festivals, to a degree. The festival can be the place where a new act with a buzz can find an audience but, usually there are established acts headlining. The festivals are seasonal.
The thing you hear a lot, concerning new acts, is that they use internet marketing and relentless touring to build that buzz. What I see is, a glut of new acts using the same internet, mass marketing schemes and a lot of shows where the bands aren’t breaking even. If you look closely at the bands that have made it via this route, somebody has speculated on them. Somebody has financed the hard work and promotion.
If the industry isn’t going to finance development, it’s going to be up to the individual. The band with more money in their pockets to start with, is going to last longer on the relentless and costly road. And who will be the individuals doing the speculation? Is up to dentists now, rather then record men and concert promoters?
The record sales, the tour revenue, the t-shirt sales, all of that stuff, has been a shifting paradigm throughout the history of the music business. One hand washes the other while robbing Peter to pay Paul. Whether the tour was a way to promote records or the other way around, there has always been artist development, there has always been speculation.
So, what happens when the money making acts are gone? No, answers here, I can only speculate.