Tuesday, April 01, 2008

U2 latest to sign on with Live Nation

U2 is one of the rare acts today that doesn't need the music industry to survive. They might not sell as many records as they used to (no one does), but they can sell out any tour they put on sale. They must sell lots of merchandise. In other words, they do not lack for financial resources. An article in the WSJ yesterday laid out the terms of what Live Nation will be handling for U2. The monetary compensation was not announced.

Live Nation will not have a stake in the band's recorded music or publishing. They will be promoter of record for tours for the next 10 years, handle merchandise and the band's website. For the same portion of her deal, apparently Madonna was paid $70 million by Live Nation. As WSJ points out, this deal keeps the status quo. Live Nation or it's predecessors have produced and promoted every U2 tours since 1997, a subsidiary, already manages their website and deals with their merch.

I scratch my head as to why U2 made this deal. Is it a monetary windfall? Does that even matter to them? The ability to control your own destiny, the ability to go where you want, when you want seems to be synonymous with U2. After the debacle of their fan club members, who paid a minimum of $40, not being able to buy choice seats for their tour, you think they would want to rethink the whole thing, not make a 10 year deal. Do they want want to be beholden to a behemoth?

Live Nation is acquiring at break neck speed. They own merch companies, website/fan club administers, recording contracts (Madonna)-but no label, as well as being promoters. They are starting an in-house Ticketmaster type service. Is Live Nation becoming an otopus with a few too many arms? Are they spreading themselves too thin? Are they the future of the music business?

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