Warner Music Will Only Do 360 Deals

TechCrunch summarized the interview with Edgar Bronfman Jr at the Web 2.0 Expo last week. Bronfman said that any new artist on the label will have to sign a 360 deal, which means the label would receive a percentage of not only music sales and master use rights, but any stream of revenue the artist might receive: This includes touring, publishing, licenses, merchandise, etc. It is usually management that gets a % of all income the artist receives in exchange for management services. Note that about 95% of the managers, never see a dime in commissions from record sales and this is not a recent development. What will Warner's be offering in exchange for that all encompassing %? Will they offer management services, music publishing, book tours?

I used to think that having management and record company under one roof would be a good thing. In the case of major labels, I no longer hold to that belief. In all cases, both the artists and management have the same goal as the record label: to sell records. How they both want to achieve that goal is usually very different. The one who might be hurt the most in a 360 deal is the artist. The scenarios could be endless. That is of course if every aspect of their career is carried out under one roof.

Having a separate management company who knows the artist well and is willing to fight for what the artist believes in is invaluable to the artist. Having a publishing company that knows how to get a song placed in an indie film even though it might mean making less money for the record company, but more exposure and money in the long run for the band would be a no-brainer for an artist, but might run counter to the labels immediate bottom line. The label wants the band to open for a completely incompatible artist who might be selling tickets, but the audience is wrong. The band might sell a few records on this tour, but doesn't gain fans for life. It would make more sense for the band to break even on a small club tour opening for the artist whose audience would love the band and staying true to their roots. The conflicts would be immense.

Bronfman says it takes a long time and money to develop and artist and he's right, so maybe this in the only way the labels can generate money to survive. The artists that are most successful are those that know what they want and surround themselves with a diverse group of people that are in their corner and help them get there. Team of Rivals, the book by Doris Kearns Goodwin has been cited lately as Barack Obama is an admirer. It's an amazing study on human nature. Lincoln when compiling his cabinet, decided to fill it with people who were his opponents during the presidential race and didn't always agree with him, but he thought they were the best candidates for the jobs. Initially hating him and disparaging him,they learned to appreciate and respect Lincoln for who he was. There is no reason that recording artists shouldn't look at their team the same way. Having one opinion, one option, one voice, one company doesn't seem like it would be in any one's best interest. Setting aside some time to read Team of Rivals is in every one's best interest.

StubHub and Madonna Deal to Resell Tix

I guess any news that is music business related should not surprise me, but it still does. Years ago you would not see the artist getting into bed with the scalpers, but I guess Madonna feels if you can't beat 'em, join 'em.

According to an article in today's Wall St Journal, Madonna will get a a percentage of sales as well as a flat fee from StubHub. This is her first tour under her new $120 million deal with Live Nation. She is doing 18 dates in the US this fall. Several of them will be stadium shows including Dodger Stadium. I've only seen Madonna once and it was at Radio City. It might have been the Like A Virgin tour. I can't image her show translating to a big stadium where she has to connect with at least 45,000 people. Even though Madison Square Garden isn't intimate by any means, you can still see the dancers. I could be wrong, but I have a feeling her fans will not want to see her in a major league ballpark. So Madonna plays bigger venues than ever, gets into the scalping business and is releasing her last record on Warner Brothers. It was also reported in the Journal that the Warner Music Group's losses widened. Some things will still surprise me, others won't.