Sooner or later they said, 'I’m not going to go on the road for 200 shows because you tell me so. An important distinction to make is between active and passive rights. So in this case, the artist can sign with a separate publisher but the record label will top-slice a percentage of the publishing revenue. Most obviously, the amounts of money involved were very high. We should share in all the businesses we help build for you. CD sales may have declined by roughly half in the last 10 years, but they were still worth $12bn in 2010 (Peoples, 2011b), with the major labels accounting for the majority of that total. EMI were still leading the way when in 2005 they signed a deal with Korn that bears more resemblance to a 360 deal. Given that Korn received 70 percent of net profits from their record sales (far in excess of any conventional royalty rate achievable by even a superstar artist), profitability relied heavily on Korn’s touring schedule, and it was expected that Korn would perform roughly 100 shows per tour (Garrity, 2005). First, as a leading advocate of independent labels, Silverman is arguing for the value of record labels per se, not just the major labels. "If Live Nation and Ticketmaster merge, they may need to make cutbacks and there are no obvious duplications.". The record dominates our sense of popular music and this affects how we hear live music, with live performances generally heard as crude interpretations of the recorded experience, as variations from the record (Eisenberg, 1987). Then, thanks to our rocket launch, you make tons of money by touring, songwriting, selling your face to teenagers on T-shirts etc. FundingThis research received no specific grant from any funding agency in the public, commercial or not-for-profit sectors. 3.The rights specified in the press release announcing the deal are touring, tour sponsorship, tour merchandising, VIP packages, secondary ticketing, recorded music, clothing, licensing and other retail, non-tour sponsorship and endorsements, DVD and broadcast rights, fan club/website and literary rights. Artists from The Beatles to Metallica have signed licensing deals with games makers such as Activision, which produces Guitar Hero, as consumers imitate their favourite bands in the comfort of their living rooms. Second, Silverman’s view is not uncontroversial. The same situation exists under a 360 deal, only now cross-collaterisation can occur from income sources other than recorded music. This can be easily illustrated by comparing 2010 data: in the USA there were exactly 300 million more album purchases than concert ticket purchases (326.2m and 26.2m respectively; of the 326.2m albums sold, 225.8m were physical rather than digital purchases) (Branch Jr, 2011; Christman, 2011).8 Worldwide, the most popular live act in 2010 was Bon Jovi, who sold just under 1.6m tickets (Waddell, 2010). We couldn’t even get the deal done. It is not clear that this deal was as successful for EMI as the Williams deal. Going forward, that is going to have to change. Figure 2. It was submitted to Atlantic Records for the rock band Paramorewhile Hanson, Marcus and Zumwalt were employed by the label. When Roger Faxon was appointed head of EMI in 2010, he circulated a memo to staff in which he outlined his vision for the company, stating that the company would have a ‘more diversified revenue base’ in the future, becoming a service company in partnership with its artists which ‘we cannot continue to view … as being limited to selling records’ (this was the only use of the words ‘record’, ‘recording’ or ‘CD’ in the whole 3000-word memo). In this instance ‘the deal’ was actually two separate deals, the first of which was a fairly standard recording contract, albeit one with an advance and royalty rate befitting Williams’ superstar status: Williams received £25m to £30m in advance for his next two albums (the already-recorded Escapology and a ‘Greatest Hits’ package), with another £25m to £30m advance for a further four albums (including one more greatest hits). The means that the media through which we access recorded music may change, but YouTube hits, Spotify streams and ringtones are still recorded music. Labels are having to develop alternative revenue streams and generally have become persuaded as to the merits of the 360 approach. One thing this does mean is that the major live industry is to some extent parasitic on the recording industry. In it, rather than the record industry being at the centre of the music industry, live music (and thus Live Nation) will now be the core (Figure 1). Toynbee (2006), for example, discusses how the dissemination of records has structured the very sounds of popular music (what he refers to as ‘phonographic orality’) but, for the present article, the more significant factor is the impact that the record has had on the listeners of popular music. Create a link to share a read only version of this article with your colleagues and friends. Old Slaves: Entertainers Who Signed Bad Record Deals. Piracy levels indicate that records remain important. The ivory tower sends an edict to start signing merchandising rights, but the poor business affairs guys haven’t been educated in those deals. Lee Marshall is a senior lecturer in sociology at the University of Bristol. One repercussion is that Live Nation will have to license records to one of the major labels for distribution. Financially, their strength comes from the fact that the major labels own a lot of the most popular music recorded over the last 70 years or so. So, what do 360 deals usually entail? The company was part-owned by Williams and EMI on a 75/25 basis. The overall picture painted by some commentators is that having tied their fortunes to the CD format, record labels, for decades the biggest fish in the music industry pond, are in terminal decline (e.g. However, the most publicised 360 deals have been made not by labels but by Live Nation, the world’s largest live music promoter, and some have argued that the emergence of the 360 deal reflects a shift in the balance of power within the music industry. Hanson has said there was strong resistance to the deal by both label and band and that he had to fight to make it happen, but believes his efforts were vindicated by the band's subsequent success, sayi… At least on the surface, the major labels have rethought their mission statements completely in the last few years.
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