Live Nation CEO Confident About Summer Touring Season

Live Nation CEO Confident About Summer Touring Season
May 07, 2009 - Touring

By Mitchell Peters, L.A.

Despite Live Nation's first-quarter loss of $102.7 million, due in part because of fewer music fans attending concerts in the North American market, the company's CEO Michael Rapino has assured investors that business will pick up this summer.

"Our first quarter results were in line with our expectations and reflect the season's slowest period of the year for us," Rapino said today (May 7) during a conference call with investors. "We have now entered the busiest season for concerts and top-line trends remain healthy."

Live Nation's first-quarter loss of $102.7 million compares with a loss of $37.2 million, or 50 cents per share, in the year-ago quarter, which had been bolstered by 42 cents per share of income from the sale of its North American theatrical business, motor sports division and a business related to producing and selling concert DVDs. See the full details of Live Nation's first-quarter results here.

Live Nation will have a busy summer in 2009, promoting international music festivals and tours for such artists as U2, Coldplay, Nickelback, Madonna and the Jonas Brothers, among many others. The live entertainment company is also developing strategies to stimulate ticket sales for concerts at the amphitheaters it owns or operates in North America.

"We're executing multiple promotions to provide low-cost tickets to fans in this tough economy," Rapino said. "This summer we have over three million lawn tickets priced under $30, and have expanded our four-pack to 70% of our shows. We're also running extensive price promotion with corporate partners such as Citi and 7-11, and working to expand the number of affiliate programs to drive ticket sales to our site."

The CEO also addressed dynamic ticket pricing for upcoming concerts. "In terms of dynamic pricing, I wouldn't say we've made a ton of headroom yet. I think that's still the low-hanging fruit that we have to get to," Rapino said. "We'll test some this summer, but by next year this will be an ongoing change on how we sell with all of the different options."

One of those tests will be the summer amphitheater tour by No Doubt, which begins later this month. "We priced the house very smartly, versus a traditional three-scale model," Rapino said of the tour. "And that's provided some great learning and increased revenue."

Rapino also addressed the status of Live Nation's proposed merger with Ticketmaster Entertainment, which is currently under review by the U.S. Department of Justice on whether the combined entities would be anti competitive.

"We're in the second review, as we've announced, which is just an extensive data collection, period," he said. "All indications we're getting from advisers is that fall is a very reasonable close and time period."

Additional reporting by Associated Press

THE 'FREE' DEBATE

THE 'FREE' DEBATE
Ad-supported music sites, file-sharing services
and a wealth of music posted online are
adding to the topic of "free" become a more common
talking point. As companies search for new
ways to monetize recorded music, expect free
music to be a common theme.
Chris Anderson, author of "The Long Tail,"
has a book on the topic coming out in July and
frequently posts about the concept of free at his
blog. "Free: The Future of a Radical Price"may
ignite interest - like Anderson's "The Long Tail"
- as well as fear in the music industry as people
ponder how to earn money if music is supposed
to be free.
Last February, Anderson's article on free for
Wired, "Free! Why $0.00 Is The Future Of Business,"
set the stage for much of today’s discourse.
"Once a marketing gimmick, free has
emerged as a full-fledged economy," he wrote.
"Offering free music proved successful for Radiohead,
Trent Reznor of Nine Inch Nails, and
a swarm of other bands on MySpace that grasped
the audience-building merits of zero."
But just as he did in "The Long Tail," Anderson
did not draw enough distinction between
marginal cost – which in the case of digital distribution
is zero – and average cost. When Anderson
writes that "the marginal cost of digital
information comes closer to nothing," what he
means is the marginal cost of distributing that
digital information. There are significant costs
in recording music. The cost of creating a brand
and inducing awareness, other considerations
Anderson understates, are both unavoidable
and considerable. An insignificant cost of creating
and distributing one more digital file does
not reflect the amount of investment to be recouped.
In theory, a company should set price equal
to marginal cost. Digital goods on the Internet,
though, are not akin to razorblades. In reality,
not all digital music can be priced at zero. The
information comes with real costs. Even if it
feels free (Nokia’s Comes With Music) it’s not
free.
But some digital music can be priced at zero.
Streams at MySpace are free to consumers.
Their value is promotional, not whatever scant
revenue share makes its way to the owner. Widgets
that stream an album can generate awareness
and, more importantly, harvest listeners'
email addresses.
Even some downloads can be free. Artists
may give away some downloads to raise awareness
and generate sales of the full release. Radiohead's
"In Rainbows" was given away for
tips, but its true value was the awareness it
raised; the album got an official digital and CD
release just a few months later. iTunes and Amazon.
com regularly give away free tracks and entire
label samplers.
Music industry blog Hypebot recently ran a
number of posts about how to use free music
to induce sales and build an artist. One post on
the subject was by Jim Mahoney of the American
Association of Independent Music. Mahoney
acknowledged the history of using free
music for promotional purposes, and he encouraged
artists and labels to use the strategy
wisely.
"Know why you’re offering your music for
free, get something tangible in return in terms
of special, unique, and focused attention (from
a select and limited group of partners who reach
your fans), and know your exit strategy (i.e. how
giving away your music is going to turn into real
profits) because the old model that says 'promotion
will result in sales' is now a fairy tale."
A post by The Orchard CEO Greg Scholl
touched upon the shortcomings of some free
models.
"The goal of the ad-supported services,
which make up the preponderance of new entrants
getting a lot of press lately, is to fill a
demonstrated market demand by giving consumers
a flexible, easy to use product that offers
good value. But, these services will only
survive if they find a way to do this while creating
new revenue streams that are accretive for
rights holders – just being something consumers
love is important, but not enough."
David Zaslav, CEO of Discovery Communications,
understands consumers want free content
but is trying to figure out if his company
will distribute either short-form or long-form
programming online. Suffice to say, Zaslav is
not just going to give it away. Quoted from a
post at paidContent:
"We don’t want to lose marketshare, but at
the same time, we don’t want to encourage free
content. Free didn’t work for newspapers. Free
didn’t work for the magazines. And it doesn’t
work for the broadcast companies. We have to
see how it develops. But ultimately, we all have
to follow the behavior of the consumer."
Before Anderson's "Free!" book comes out
in July, there is a conference in May called "The
Free! Summit." Anderson and TechDirt's Mike
Masnick are scheduled to speak.
—Glenn Peoples, Nashville

BUSINESS BRIEFS: YOUTUBE, ORIGAMI VINYL, TICKETSNOW AND MORE

- EMI has launched Your Soundcheck, "an exclusive
online research community of people with
a passion for music." It appears to be a continuation
of the mission to learn about consumer behavior
that was started with the consumer-facing
EMI.com. Hopeful registrants are taken through
a five-minute questionnaire. (Your registration
will be denied as soon as you indicate you work
in the music industry.) What will be learned from
Your Soundcheck that could not be gleaned from
the various Web sites of EMI artists, conversations
with technology partners or expensive market
research reports? Perhaps how valuable
consumers email addresses are to direct marketing.
(Your Soundcheck)

- A familiar refrain: digital site losing money,
artists demand better royalties. In this case, the
site is YouTube (estimated 2009 loss: $470 million)
and the artist is singer-songwriter Billy Bragg.
(Digital Music News)

- Echo Park in Los Angeles has a new record
store, Origami Vinyl. Vinyl-only stores are becoming
more commonplace. Sales continue to increase
and LPs offer better margins than do CDs.
For the first three months of 2009, vinyl sales are
up nearly 55% according to Nielsen Soundscan.
(LAist)

- David Harrell, who writes the excellent Digital
Audio Insider blog, was interviewed by Fingertips
about digital music, being an artist in the
Internet era, etc. An excerpt: "I'm not arguing that
musicians don't deserve a living wage, but it's a
simple fact that--and this is the case with any creative
field--you have more talented people than
the market for their collective talent can reasonably
support. And you've got more of them every
day, as it's easy for anyone to release music today,
even if it's just putting some songs up on My-
Space. The result is more and more competition,
not just for the dollars of music fans but for their
time and attention." (Fingertips)

- Regional Mexican artists are having success
with mobile phones. "In the Anglo market the
majority of digital sales take place online; in regional
Mexican music an estimated 85 percent of
digital music is purchased on cellphones." (New
York Times)

- MicroMu is a Chinese Web site that promotes
concerts by local independent artists and posts
live recordings that are free to consumers. The
artists get a share of the advertising revenue. (Beijing
Review)

- A broad coalition - some of its its members
usually sit on the same side of digital rights issues
- is urging President Obama to appoint "policymakers
who will protect new tools and new
artistic works" and create new positions at the
Patent and Trademark Office, the United States
Trade Representative and the Department of State.
The coalition includes the Electronic Frontier Federation,
Consumer Electronics Association, the
American Library Association, and the Wikimedia
Foundation. (Press release)

- Nearly half of Canadians polled by the Angus
Reid Global Monitor believe secondary ticketing
service TicketsNow should be closed because they
believe Ticketmaster is using the site to overcharge
fans. (Ticket News)
—Glenn Peoples, Nashville

Does file sharing reduce music CD sales?: A case of Japan

Does file sharing reduce music CD sales?: A case of Japan

Summary of research on netlabels

Summary of research on netlabels (por Patryk Galuszka)

Publish at Scribd or explore others:

BEFORE THE MUSIC DIES (B4MD)

BEFORE THE MUSIC DIES (B4MD) tells the story of American music as its future hangs in the balance. Filmmakers Andrew Shapter and Joel Rasmussen traveled the country, hoping to understand why mainstream music seems so packaged and repetitive, and whether huge corporations really had the power to silence musical innovation. The answers they found on this journey..ultimately, the promise that the future holds..are what makes B4MD both riveting and exhilarating.

"...the most important film a music fan will ever see."
- Lee Abrams, Chief Creative Officer, XM Satellite Radio

"A work of inspiration...certain to thrill..."
- Salon.com

"Exceptionally important, timely and affective..."
- Paste Magazine

http://www.beforethemusicdies.com/

Atlantic makes label history as digital sales surpass CDs

By David Chartier | Published: November 26, 2008 - 01:15PM CT

The music industry has come a long way from battling the threat of P2P and through the rise, and ongoing fall, of music DRM. Today, Atlantic has announced one of the most significant milestones in this transition, and one that many record label execs probably considered impossible just a few years ago: the last quarter was the first time in which Atlantic's US digital sales outpaced physical CDs.

The accomplishment, as Ars Technica readers know, was anything but easy, and it stands in stark contrast to the results of its own parent label, Warner Music Group. While Atlantic has reported that US digital sales accounted for 51 percent of its revenue in fiscal Q4 (ending September, 2008), Warner's digital sales made up only 27 percent of its US music revenue, according to the New York Times. But, thanks to lower income tax expenses and a digital revenue of $167 million (up 28 percent from the previous year), Warner's Q4 earnings were up 20 percent overall, reaching $6 million.

Atlantic hit its stride this year, surprising analysts by garnering the highest overall market share in the industry thanks to artists like Death Cab for Cutie, Led Zeppelin, and T.I. Achieving digital success no longer means just albums and songs, though. "I think we’ve figured it out," Julie Greenwald, president of Atlantic Records, told the New York Times. "It used to be that you could connect five dots and sell a million records. Now there are 20 dots you can connect to sell a million records." Greenwald is referring to the new revenue streams that labels can—or increasingly, absolutely need—to leverage, such as ringtones, merchandise, and concert tickets, most of which can also be offered online.

Of course, the dawn of Internet distribution and all the freedom it affords musicians is also giving labels a hard time, and reason to reconsider their methods. Artists like Nine Inch Nails and Radiohead areleaving the labels behind, while others are pressing for more control over their own work.

Overall music sales are still on a gradual decline, as well. Forrester Research predicts US sales to decline to $9.2 billion in 2013 from $10.1 billion this year. It's true that physical CD sales are still dropping faster than digital sales are picking up the slack, but the music industry also finds itself doing battle with the movie and video game industries for each consumer dollar.

Within the music sales ecosystem, however, it is far more likely that the digital single, and not P2P file sharing, is the culprit for a lot of the lost revenue, and the single may simply represent the demands of the market finally being answered. Consumers are no longer throwing down the cash for full albums just to get the two or three songs they want. They simply buy those two or three singles at the low, DRM-free price of 99¢ or less.

Still, Atlantic's sales milestone should serve as an indication that the labels can weather the digital transition. The survivors may ultimately be smaller, and they may have diversified into ringtones, t-shirts, and putting content on the web with partnerships like MySpace Music, but they will have to have evolved with the market. It's good to see the first of the labels begin to grow a new pair of legs.

http://arstechnica.com/news.ars/post/20081126-atlantic-makes-label-history-as-digital-sales-surpass-cds.html

WOMEX muda-se para a Dinamarca em 2009

WOMEX, the World Music Expo, is pleased to announce its next location
- Copenhagen, Denmark - for a three-year residence from 2009 - 2011.
After a total of four years in Sevilla, Spain (2003, 2006 - 2008),
WOMEX heads north to this hospitable Nordic capital.

WOMEX is partnering with key Danish players from the fields of music,
events and tourism, all with extensive experience in both culture and
production. First and foremost, the partners comprise the Roskilde
Festival, the Copenhagen Jazzfestival, and tourist organisation
Wonderful Copenhagen. Additional partners are events producers
Welcome, the Danish Center for Culture and Development, Global CPH
and World Music Denmark.

"Each year we seek enhancements and opportunities," says WOMEX
General Director, Gerald Seligman, "and the chance to team up with
Roskilde, who will be producing the showcases and lending their
experience to local event management and community outreach, was a
determining factor in the move. Add to that the expert teams
Copenhagen has assembled, and we can look forward to some thrilling
possibilities. As WOMEX matures and expands, these are the kinds of
partners we need to help us bring an ever-greater service to our
community."

http://www.womex.com/realwomex/news/copenhagen.html

Indie labels outraged as EU approves Sony BMG deal

Media News - Wednesday, September 17, 2008

Indie labels outraged as EU approves Sony BMG deal

The European Commission has given Japanese electronics giant Sony the green light to purchase outright the record label Sony BMG in an EUR 840m buy-out from German media firm Bertelsmann. The EU executive sees no competition worries resulting from the merger, but indie music labels say Brussels is missing the point - it is cultural diversity concerns that are under threat from the creation of such a music titan. On Monday (15 September), the EU executive said that after examining the deal, it was unlikely that the transaction would harm competition, over howls of protest from independent music firms. In August, Sony announced it intended to purchase Bertelsmann's 50 percent stake in Sony BMG, jointly owned by the two companies, for EUR 630m, as well as some EUR 210m in cash of Sony BMG revenues. Following the purchase, Sony will become the sole owner of Sony BMG, which will be renamed Sony Music Entertainment Inc. The Japanese firm would now become the second largest music company in the world. The commission said that the transaction would not lead to any 'horizontal overlaps in the music recording markets,' as Sony has no other music recording activities in Europe. The European independent music label trade association, IMPALA, however strongly disagreed, saying the merger threatens cultural diversity and that the commission did not carry out an in-depth investigation as to the consequences of the deal. (EU Observer)

Indústria fonográfica e as suas transformações...

How File-Sharing Informs the Industry
The classic case for how BigChampagne (bigchamgagne.com) supports a client –
who can range from struggling new artists to the entire roster of a major – is by
analyzing whether listeners have found a hit before radio. Let's say that in a given
market, a single hasn't broken onto radio, but BigChampagne discovers that listeners
in that city are swapping it in huge volume; the label can take that information to
radio programmers and urge them to spin the song to death, turning it into an
official hit.

“The majors will embrace any formula that sells records until it stops
working. As a result, the corporate machine cannot deliver an adequate
diversity of sounds, only a homogenized, prepackaged product.”
– Michael Roberts, in Rhythm & Business (2005, Akashic Books)

How fast will the sun set on the compact disc?
Quarter-size CDs that can float among compatible music players, computers, game
devices, digital cameras and personal digital assistants are already developed.
But a massive installed base of CD players means that the traditional recording
industry markets are not going to disappear or even be impacted by digital
distribution any time soon.

in Indie Marketing Power: THE Resource Guide for Maximizing Your Music Marketing by Peter Spellman

Digital formats, rights management, live performances

New Music Markets Digital formats, rights management, live performances

IDATE News 425 21 August 2008

The various segments of the music market are evolving under the impact of the shift to digital formats. This study analyzes the various online music distribution models and the associated pricing and business models using case studies. It describes the evolution in the music industry, both upstream (creating and producing music) and downstream (distribution, tie-in merchandise, live performances), and establishes the conditions for a new economic equilibrium. Finally, a five-year market forecast is provided.

The decline of the CD market in the context of the global music market

The global music market represents 67 billion USD, divided into three segments: recorded music (33.5 billion USD), live performances (25.6 billion USD), and music publishing (8 billion USD).
Directly or indirectly, the shift to digital formats affects all of these segments:
• The partial shift from physical sales to digital music sales impacts the associated revenue from music publishing;
• The increase in the number of Internet distribution services implies an increase in corresponding publishing rights;
• The decline in the global recorded music market increases the importance concerts hold in the music economy.

THE MARKETING OF BLACK MUSIC

James R. Mitchell¹

Abstract

Today's black musicians are challenged not only to master their art, but also the business side of what has become a multi-million dollar consumer market. The author argues that little has changed since the days when black talent was paid with liquor and Cadillacs. Some new groups and young performers have begun to learn from the mistakes of their elders and are managing to hold on in a treacherous marketplace.

Mitchell, James R. (1980) "THE MARKETING OF BLACK MUSIC," Contributions in Black Studies: Vol. 4, Article 3.
Available at: http://scholarworks.umass.edu/cibs/vol4/iss1/3

Music industry in the era of online delivery: Application of Differential pricing and flat rate pricing for songs with varying consumer valuations

Sidhu, Param and Midha, Vishal, "Music industry in the era of online delivery: Application of Differential pricing and flat rate pricing for songs with varying consumer valuations" (2004). AMCIS 2004 Proceedings. Paper 305.
http://ais.bepress.com/amcis2004/305

BMI Tops $900 Million Mark in Revenues

BMI has announced that it earned more than $901 million in revenues for its 2008 fiscal year, including its subsidiary Landmark Digital Services, LLC™. This is the first time any copyright organization has topped the $900 million mark for music performance revenues, and represents a 7.2% percent increase from the previous fiscal year. BMI also set a historic high in royalty distributions, and will disperse more than $786 million to the songwriters, composers and copyright owners it represents, an 8% percent increase over the prior fiscal year. With more than 375,000 songwriters, composers and music publisher affiliates, BMI is the world’s largest music copyright organization.

Royalty Distributions

Both figures represent milestones in royalty collection and distribution for the public performance of music. BMI President & CEO Del Bryant said, “BMI has been extraordinarily successful in signing the brightest and most popular new music creators across all genres, building upon a repertoire that already includes the most beloved songs of America’s legendary songwriters and composers.” Bryant pointed out that BMI has consistently embraced new media businesses that use music, and developed innovative licensing solutions to permit these companies to reach new audiences, while assuring that creators and copyright owners are fairly compensated. “Our pro-technology and pro-business attitude has made it possible for BMI to continue to grow our revenues more than 7% each year, on average over the past 10 years, almost doubling our income in that period,” said Bryant

.

Total Revenue

BMI generated an impressive $664 million in domestic licensing income, an increase of 8% or $51 million over the prior year. BMI’s leadership in licensing the explosive growth of music in cable, satellite radio and satellite television brought in revenues of more than $208 million, accounting for more than 23% of the company’s consolidated revenue. Traditional broadcast radio and television accounted for $340 million, or about 38% of revenue. Growth in revenues from the performance of music in retail and service establishments, including restaurants, bars and the hospitality industry, increased to a total of $97 million, accounting for approximately 11% of BMI’s revenue. BMI’s New Media revenues increased to a total of $15 million. Thanks to growth in the mobile, social networking and website categories, BMI now licenses more than 6,500 digital media properties, an increase of more than 50% over the prior year. International revenues were also an especially bright spot, accounting for $238 million, or more than 26% of BMI’s revenues.

During the year, BMI extended its eCommerce initiatives, significantly enhancing its business-to-business tools for songwriters, composers, and copyright owners, as well as its licensing customers. BMI added almost 30,000 new songwriters and composers to its rolls, with the vast majority joining online. The company launched new tools permitting licensees to initiate and renew contracts, report music use and pay license fees online. BMI also dramatically increased its royalty-processing infrastructure to handle the explosion of music reporting from its many digital licensees, processing more than nine billion feature audio performances during the year. The strategic use of technology in all of these initiatives permitted BMI to grow its business while lowering overhead to 11.7%, the lowest in the company’s history.

BMI’s fiscal year runs from July 1 to June 30. BMI’s consolidated financial information includes Landmark Digital Services™, LLC, a wholly owned subsidiary. Landmark provides advanced audio-recognition products and services to BMI, as well as third-party clients, including content providers, copyright owners and consumers of music and digital entertainment.

Industry “missed boat” on Blu-ray this year

10:27 | Wednesday August 20, 2008

By Kyriaki Karadelis

Music titles may have missed the boat in the short term, according to a leading consultancy.

Futuresources’ music and mobile specialist David Sidebottom describes music release sales as “currently relatively insignificant” in the total Blu-ray market, which is expected to hit around 4.5m unit sales by the end of the year.

Sidebottom suggests that music titles will account for no more than 3-4% of the total market this year and also warns that manufacture and supply issues could further hamper sales in the fourth quarter because products might not be ready in time for the key selling months leading up to Christmas. He says: “Blu-ray music sales are expected to gain momentum by the end of the year, as stronger, high profile titles are released. As in the Music DVD market, evergreen and strong live acts will provide the majority of sales in the sector, with a more mature buyer evident.

He adds that although selected Blu-ray music titles could see significant volumes, a repeat of the success of the early days of Music DVD is unlikely.

Vodafone abre loja de música virtual: Vodafone Music

Vodafone debuts mobile music store

13:54 | Wednesday August 6, 2008

By Ben Cardew

Vodafone today pushed the button on its new mobile music store, Vodafone Music.

The store, which is available on selected Vodafone Live! Handsets and also available to download, allows customers to preview songs for free, as well as download tracks to their phones.

Vodafone singles out the store’s “enhanced visual library”, which allows users to browse for tracks using a “Smart” search option.

Singles and albums cost on average £0.99 and £7.99 respectively

“With Vodafone Music, customers will be able to make the most of the Vodafone Music store as well as gaining an entirely new musical experience on their phones,” says Vodafone UK head of music Tom McLennan. “Our commitment to music and our handset technology allows for the ultimate user experience coupled with great value for money.”

Making Friends with Jarvis Cocker: Music Culture in the Context of Web 2.0

David Beer
York St John University, d.beer@yorksj.ac.uk

The movement toward what has been described as Web 2.0 has brought with it some significant transformations in the practices, organization and relations of music culture. The user-generated and web-top applications of Web 2.0 are already popular and widely used, the social networking site MySpace already having more than 130 million members worldwide. By focusing specifically upon the presence of the popular music performer Jarvis Cocker across various Web 2.0 applications, this article seeks to open up a series of questions and create opportunities for research into what is happening in contemporary music culture. This exploratory article lays out an agenda for research into music culture and Web 2.0 that is not only concerned with the implications of Web 2.0 for music, but which also attempts to understand the part played by music in making the connections that form the collaborative and participatory cultures of Web 2.0 and the flickering friendships of social networking sites.


Key Words: friendship • music • music culture • MySpace • social networking sites • Web 2.0 • Wikipedia • Youtube