[lulamishka]

Originally Posted by myles hie

Cool find!. After posting in this thread yesterday i was chatting with some friends about this very same thing. With artists deciding to ditch the traditional major's, something will need to fill the void and provide the same services. It will be interesting to see what new companies are formed to accomadate what will be needed.

With the Madonna situation it sounds like she is leaving 1 company (WB) to test the waters with a new company which is made up of a a bunch of other companies who want to put everything ( recording, touring, merch, endorsements) under one roof, which at that point would have control over pricing of said things. Which could turn out to be "Major record label 2.0." right?

Not sure. I'm not well versed in the record industry. But for a superstar like Madonna, it sounds like she's getting a much better deal. Here are some more details from the article:

The package includes a general advance of $17.5 million and advance payments for three albums of $50 million to $60 million, according to people briefed on the deal.

Live Nation also is expected to pay $50 million in cash and stock for the right to promote her concert tours. If and when she does tour, though, the promoter will only get 10% of the gross, with 90% going to the artist; that is the standard split for music superstars in the concert industry these days. Income from licensing ventures such as the use of Madonna's name on fragrances or other products would be divided evenly with Live Nation.

Madonna's representatives have been negotiating for months with both Warner and Live Nation. Warner took the unusual step of enlisting IAC/InterActiveCorp, the parent of ************, as a partner to try to counter Live Nation's proposal for a deal that covered both touring and recorded music. IAC and ************ would likely have brought concert-industry expertise to the table, though it is unclear precisely what role they were proposing to play.

The deal carries significant risks for Live Nation. People in the music industry estimate that at current recorded-music prices, the promoter would have to sell about 15 million copies of each of its three albums to make back its investment on that piece of the deal alone. But an artist manager not involved in the deal said that with prices for CDs and downloads alike falling, that number could increase.

Warner Music would retain the rights to sell Madonna's catalog of albums dating back over 20 years, and her last studio album for the label will likely arrive next year. It isn't clear when her first album for Live Nation would be delivered, nor is it clear how the promoter would distribute and promote the album, since the company has limited infrastructure to do so. Under the terms of the deal, ownership of Madonna's three Live Nation albums would revert to her after a period that couldn't be determined.

People briefed on the deal speculated that Live Nation would enter a licensing arrangement with one or more traditional labels to release her albums. A spokesman for Live Nation declined to comment. Madonna's manager, Guy Oseary, couldn't be reached.

Most major labels have struck at least a handful of "360 deals" with new bands, where they share in multiple revenue streams. Superstar deals are more` expensive and riskier, and therefore much more rare.

------------------------------
It's a long article. There's even more: http://online.wsj.com/article/SB1192..._us_whats_news