NIN and Radio Head have put the nail in the coffin

[lulamishka]

Madonna Heads for Virgin Territory
Concert Promoter Lures Material Girl From Warner Music With $120 Million
By ETHAN SMITH
October 11, 2007; Page B1

In the latest seismic shift to rock the music industry, pop superstar Madonna is close to leaving Warner Music Group Corp.'s Warner Bros. Records for a $120 million deal with concert-promotion giant Live Nation Inc., according to people familiar with the deal. Madonna still has another studio album left to deliver with Warner Music.

The 10-year pact with Live Nation, of Beverly Hills, Calif., would give Madonna a rich mix of cash and stock in exchange for the rights to sell three studio albums, promote concert tours, sell merchandise and license her name.

The fact that a concert promoter like Live Nation is set to land the deal rather than a traditional record label like Warner Music is a sign of how quickly the landscape is shifting in the cratering music industry.

Traditionally, acts like Madonna would release their recordings through a major record label and then make separate deals for touring and merchandising with other companies. Now, however, a range of players in the music business -- labels, concert promoters and even managers and ticketing companies -- are eager to make broad deals that give them a larger piece of the pie by participating in revenue streams such as endorsement deals between artists and advertisers, as well as the sales of concert tickets and merchandise.

Promoters typically book artists and venues for concerts, dividing the door take with the performers. Live Nation appears to be gambling that by bringing virtually all of Madonna's ventures under one roof, it can make money by cross-promoting albums, concert tours and other merchandise.


For the rest of the article, click here: http://online.wsj.com/article/SB1192..._us_whats_news

[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?

[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.

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

[myles hie]

Originally Posted by lulamishka

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

She is getting a killer deal. This Live Nation company should go ahead and lube up now, its gonna be a long 10 years.

[JMT]

Radiohead Fans Feel Duped By In Rainbows' Poor Sound Quality, Possible Ulterior Motives

Statements from band's management seem to indicate that downloadable album was just promotional tool for physical CD.

Oct 11 2007 7:12 PM EDT

When Radiohead announced last week that they would be releasing their seventh album, In Rainbows, via their official Web site, there was much fanfare and some honest-to-goodness debate about the future of the music industry, the validity of major labels and just how people consume music.

But in the days since that announcement, a whole lot of that fanfare has curdled, thanks to moves by the band and its management that some see as dishonest, distasteful and, well, downright un-Radiohead. The sentiment among many fans seems to have gone from admiration for the group's willingness to let the consumer decide how much to pay for the new album to anger over the low quality of the downloads — and dismay over the band's manager's statement that the you-choose-the-price downloads were just a promotional tool for the release of the physical CD.



The first bone of contention arose October 9 — the day before Rainbows became available for download — when fans who ordered the album (either in its download-only form or as a deluxe, $81 "discbox" version) received an e-mail from Radiohead's official online store, announcing that "the album [would] come as a 48.4 MB ZIP file containing 10 x 160 [kilobits per second], DRM-free MP3s."

To the casual music listener, the e-mail would be little more than an order confirmation (if not, you know, totally confusing), but to a segment of Radiohead's fanbase — aand to anyone who frequents file-sharing sites — it was a call to arms for two reasons.

First and foremost, all of Radiohead's previous albums were already available as MP3s encoded at 320 kilobits per second — the highest-possible compression rate in the format (though still not nearing the quality of a compact disc) — and most file-sharers scoff at anything less than 192 kbps. (MP3 files encoded with a lower bit rate will generally play back at a lower quality — something not readily apparent on tiny iPod earbuds but obvious enough on high-end home stereos.)

Second, most took issue with when Radiohead chose to announce that In Rainbows would be available at 160 kbps — after the majority of their fans had already paid for the download. To be fair, however, the band did give potential customers the power of choosing how much they wanted to pay to download the album. It could be had for as little as the transaction fee of 45 pence, or roughly 92 cents. There was also an option on the Web site to cancel orders; though, given the timing of the bit-rate announcement, fans had less than 24 hours to do so.

"Most promo MP3s come at a higher bit rate," wrote the author of U.K. blog Kids Pushing Kids. "Worst pound and pence I've ever spent."

"Radiohead has such delicate music that requires detail and depth of sound. ... I for one CAN tell the difference between 160 and 192," responded one commenter. "[With] 160 you can't hear the finer details that make Radiohead so great. I have lost a bit of respect for Radiohead for this. I would never make people pay for 160. They may as well just stream stuff off MySpace."

No one seemed to understand why Radiohead decided to release Rainbows at 160 kpbs, though guitarist Jonny Greenwood told Rolling Stone, "We talked about it and we just wanted to make it a bit better than iTunes, which it is, so that's kind of good enough, really. It's never going to be CD-quality, because that's what a CD does."

That explanation didn't fly with some fans, who began speculating that the decision was made to keep the album off P2P sites or as a subtle way of making fans purchase either the discbox or the physical release of the album next year. The thought behind this theory was that if Radiohead fans were willing to split hairs over something as seemingly inconsequential as kilobits per second, then surely they wouldn't mind shelling out cash for the actual CD version of Rainbows.

And, as it turns out, the latter speculation seems to be true — especially after comments made by the band's managers, Chris Hufford and Bryce Edge, began to make their way around the Internet on Thursday (October 11) — which brings us to bone of contention number three.

In an interview with U.K. trade publication Music Week, Hufford and Bryce spoke at length about the downloadable version of Rainbows and how it plays into the larger plan of releasing a physical copy of the album in stores next year... (CONT'D)

FULL ARTICLE: http://www.mtv.com/news/articles/157...adiohead.jhtml

[myles hie]

Saw this today too.

Most people aren't audio files and probably wont care about the bitrate.But WTF people, you can't complain about a product that lets you name the price you pay for it.

I had read buried in the bottom of a few articles that they have another CD to be released more traditionaly next year via a regular record label. Was the great "experiment" really an experiment at all?