Shortsightedness & Greed Killing Part of the Music Business?

It seems like issues that have plagued the music industry leaders, keep coming back to haunt them. Two financial revealings this week point to just that.

The first comes from the RIAA, which is essentially a lobbyist for the major record labels. It's no secret that they've been suing people who shared music over the Internet. Now it's no secret how much they spent on lawyers to do it in 2008. There's a document circulating that the sum is $16 million. TorrentFreak has an article on why the RIAA think it was worth the money even though they only received about $391,000 as a result of their lawsuits. Go figure. I see it as $16 million dollars to alienate your audience/consumers. Give them something they want, at a price point that makes sense and they will pay for it.

The other piece of news is concert promoter Live Nation announcing yesterday that tickets sales for the top 100 touring acts are down 12% in the first half of the year and they expect the numbers to be worse in the second half of this year. Per Encore: Executive Chairman Irving Azoff, who presented via video conference, chided investors for the sell-off.
"I'm hoping that what I'm seeing as all you guys e-mail back to your offices to dump the stock isn't indicative of the fact that we have a group of investors that are so shortsighted," Irving said.

In this case not only have ticket prices confused and angered ticket buyers, but now the chairman is chastising investors. Is this a house of cards waiting to fall? I don't think that will happen, but in order to prevent it, it seems like some serious rethinking/restructuring needs to take place.

They say you can't teach an old dog new tricks. There has got to be a trainer out there who will come in and show them how it's done.

All Things D interview with Irving Azoff

The WSJ's D7 Conference covered a lot of ground. Kara Swisher interviewed artist manager, Ticketmaster CEO and soon to be head of Ticketmaster/Live Nation's new endeavor, Irving Azoff. Irving stated what seems obvious to most, except those at the major record labels: Labels have always lagged in embracing new technology, in fact they fear it. Rather than use it for their best interests, they'd rather sue consumers. Irving, as it is with any manager, believes in the live experience. That is where a manager's bread and butter has always been. He also stated that branding will be a big factor for musicians and that Madison Avenue has been a even better source of revenue for recording artists now.

Jill Sobule performed. She recently asked fans to donate money via her website so she could record her new record. She received over $80,000 in donations and the album came out three weeks ago. She wrote and performed a song inspired by attending last year's conference. She was never a fan of Rupert Murdoch. He came up to her at the D6 conference and said he liked her song, gave her a hug and she said he was nice. Inspiration comes from many places.

After watching several of the interviews from the conference, I'd love to know who chose the red chairs. They don't look comfortable. They give the impression that it's a matter of minutes before the dentist will enter the room to do a root canal.

Live Nation Ticketmaster

Here they go again. History has not been good to music industry mega-mergers. The latest involves Live Nation and Ticketmaster for an all stock offering. No cash would be exchanged. Live Nation just launched it's ticket service and from the postings on message boards, it did not make those purchasing U2 tickets happy. The site couldn't process orders, etc. A lot of people were left without tickets. Live Nation also has taken on Madonna, Jay-Z, etc to promote tours, release records, sell merchandise, etc. They do not have the infrastructure to do it. Tickemaster bought Irving Azoff's ever growing management company. On paper, the merger would help Live Nation on the artist and ticketing side. Ticketmaster gets the benefit of the extensive Irving Azoff roster.

I'm skeptical that this sum is greater than the parts. What does this mean for artists outside this circle? There is an alternative in AEG, the other big promoter. Most of the local promoters who had non-compete agreements when they were bought by what is now Live Nation, have expired. The concert promotion business has vastly changed since the SFX/Live Nation creation, comprised of many, many local promoters. Can these promoters still compete and make money? It used to be that artists would forge relationships with the promoters, which lead to artist development. Start out at a small club and as the career builds, you move up to bigger venues with the same promoter, everyone was happy. The artist and the promoter knew each other which made for good promotions and well run shows. It is such a DIY world for the artist now. They not only have to make music and perform it, but they have to be creative directors, graphic artists, videographers, editors, web designers, merchandisers, distributors, bloggers, accountants, booking agents and promoters.