Labels now want a piece of the touring pie

[Veracohr]

http://abcnews.go.com/sections/business/Entertainment/forbes_concertcash_030711.html [quote] Labels Seek Slice of Concerts The concert business has never been bigger, in dissonant contrast to the recorded-music business. While music sales have dropped for three years in a row, from $13 billion to $11.5 billion in 2002, hurt by Napster-style digital piracy and a lackluster flow of hot new acts, the tour business has climbed for four years straight, from $1.3 billion in 1998 to $2.1 billion last year. Thus musicians increasingly rely on road shows for their income. Performers frequently moan about never seeing a royalty check from their record label, no matter how many discs they sell. But a top concert draw can take home 35 percent of the night's gate and up to 50 percent of the dollar flow from merchandise sold at the show. The labels get none of it. "The top 10 percent of artists make money selling records. The rest go on tour," says Scott Welch, who manages singers Alanis Morissette and LeAnn Rimes. [b]Now the music labels, hungry for revenue from any source, are mulling over whether to make a grab for a piece of the tour biz. One company already has: In October EMI Recorded Music signed a deal with Brit singer Robbie Williams that gives the label a cut of the pop star's merchandise, publishing, touring revenue and sponsorship.[/b] Williams, unknown here but huge everywhere else, is a former boy-band star who has sold 26 million records since 1995 and regularly sells out concert crowds. His current European tour includes three nights at England's cavernous Knebworth Stadium, where he will cavort in front of 150,000 people each night. Hence EMI's willingness to pay him an estimated $20 million for a 25 percent stake for his nonmusic revenue, in addition to hefty per-album advances. EMI officials say they are pursuing similar deals with other musicians, both superstars and new acts. Other label executives are eyeing the idea, albeit less openly. Vivendi's Island Def Jam may create a tour division. At Sony Music, before he left the top job earlier this year, the embattled Tommy Mottola is said to have asked several top acts to share the wealth; they demurred.[/quote]

[offramp]

How much longer are we going to let this shit go on? It's getting to the point where something almost violent needs to happen to the labels to wake them up.

[Midimonk]

Further proof that labels are coming to an end.They are scrambling to get that last drop of blood before the industry has been sucked dry.Then what happens next will be very interesting indeed.

[Jotown]

It really isn't any big deal. An artist stupid enough to sign such a deal deserves what he gets. :confused: Or doesn't get. :D

[Jode]

The big deal is that the labels would even broach the subject of reaching into an artist's pocket for his concert take. The Big Business portion of the musical world has become too topheavy and will fall, and it is all of their own doing. I'm looking forward to the day I can download an album and all the cover art and make my own CD for about five bucks, without a dime going to the labels.

[Joachim P. Dyndale]

I don't quite understand why Robbie would sign such a deal... Maybe he got threatened or something? Robiie Williams is coming to try and make it in the U.S. this year I think. He's really, really good. I'm going to his concert in Stockholm two weeks from today. Man, I can't wait! Who'd have thought. A boy-band guy who is actually a VERY good singer/song-writer!

[Apophis]

[quote]Originally posted by Joachim P. Dyndale: [b]I don't quite understand why Robbie would sign such a deal... Maybe he got threatened or something? Robiie Williams is coming to try and make it in the U.S. this year I think. He's really, really good. I'm going to his concert in Stockholm two weeks from today. Man, I can't wait! Who'd have thought. A boy-band guy who is actually a VERY good singer/song-writer![/b][/quote]hehe that's subjective

[Jotown]

[quote]Originally posted by Jode: [b]The big deal is that the labels would even broach the subject of reaching into an artist's pocket for his concert take.[/b][/quote]All I am saying is that the idea that a buisness person would want to take advantage in a business deal should come as no surprise to anyone. That is what business people do. No one makes any artist sign a deal. It is a choice. If any artist is stupid enough to make such a pact; so be it. And as far as getting that CD for 5 bucks, none going to the label. That 5 bucks will go to the artists label. Labels are still important whether its your own, or MCA. We shouldn't be so eager to throw out the baby with the bath water.

[fantasticsound]

You guys seem to have missed a key point. EMI paid Robbie Williams [i]20 million[/i] (I assume we're talking dollars or British pounds.) for a [i]percentage[/i] of his touring profits. If the deal is that simple, he could make zip, nada, zilch, nothing in profit from touring and merch and [i]still[/i] walk away with the 20 million. If he does profit, he's made a gamble that the percentage EMI receives will be less than 20 million. I actually think this could be a good thing for performers, if their lawyers are intelligent. For one thing, the artist can now have their own accountants be creative with the numbers and screw the labels out of the full potential of the contract, just as labels have been doing to artists for years on their record royalties. The beauty of this arrangement, again if the contract is written well, is that the label has little or no control of how things are done. They're simply investors. I'd have several lawyers peruse the contracts before they're signed, however. ;)

[spokenward]

this really needs examination. Williams is a big draw on the other side of the Atlantic. Williams drew fabulously fat contract offers when his contract was up. how fat? 40 million GBP, 55 million plus in USD at the time for a 5 album deal. The label doesn't come out unless he is a worldwide star during the run of the deal. He is deciding whether to go into to business with the label. I think that he did decide. He decided that this was the right deal and the right time for him. The US market was worth it. For him it probably is. Like Jotown says - make your own choices.

[techristian]

LABELS WILL TAKE ANY PART OF THE PIE THAT THEY CAN GET ! This sort of reminds me of my first experience with a recording studio here in Windsor. The owner recorded my 45 rpm (in 1982) and told me that his recording time was worth $80 an hour back then. After the record was finished , he invited some AR people from a major label to take a listen. They liked what they heard. He then told me that I OWED IT TO HIM TO GIVE HIM 1/2 THE PUBLISHING RIGHTS ,and if so he in turn would give me the studio time for 1/2 price. After haggling back and forth for more than an hour , I told him that I would start my own publishing company and I was able to get him to agree to take only 33% of publishing. After that, I was told that my music would "end up in the toilet" because he wasn't going to promote it anymore. He then charged me the FULL $80 per hour PLUS 33% publishing. I made up my mind after that that I would never pay another studio EVER ! These guys are in business to make money. I would also like to add that this was a TIMELY music piece. He bought the finished vinyl from some place down in MIAMI and the workers in MIAMI could barely speak english. To make a long story short, he had $2000 of my money in his hands 2.5 months before I received ANY OF the 1000 records. Now if he would have handed me some substantial UP FRONT MONEY, for my song, this story may have had a completely different ending. Dan http://musicinit.com/pvideos.html

[Biggus]

[quote] Further proof that labels are coming to an end.They are scrambling to get that last drop of blood before the industry has been sucked dry.Then what happens next will be very interesting indeed. [/quote]They're desperate. How many established artists like this Robbie whatshisnmame will come along that will sign a deal like this. Do you think established acts that kick ass in ticket sales and merch, like Dave Matthews, for example, will agree to this. I'd laugh in their faces. How do these people at the labels keep a straight face doing this. :confused:

[fantasticsound]

[quote]Originally posted by Biggus: [b]Do you think established acts that kick ass in ticket sales and merch, like Dave Matthews, for example, will agree to this. I'd laugh in their faces.[/b][/quote]Again... lots of businesses, entertainment acts included, already have investors who foot the bill for production, then are reimbursed plus extra from profits. You guys are making something out of nothing. If it's in the best interests of an artist (in their own opinion), they'll sign a deal like Robbie Williams' with EMI. Alan Jackson is still raking in the bucks over a decade after hitting the charts. He's written many of his own hits, plus many for other big acts. Several years ago, he made the decision to sell off his catalog of songs for $8 million. I don't know if he still received songwriter's royalties. Probably. But decision regarding the use of his songs are in someone else's hands now. Would I have done the same thing in his position? I'll never know. He obviously felt the immediate payoff was more advantageous than sitting on the catalog forever. The point is, he was offered a significant payoff for rights to his catalog, and decided to take it. No one had to force him, and he wasn't taken advantage of by the buyer. Blood sucking as the labels can be, this does not appear to be anything but an equitable arrangement between Robbie and EMI. Go back to ranting about the many [i]real[/i] ways the labels are screwing their artists, the public, and themselves. :rolleyes: As the police officer says... "Keep moving. There's nothing to see here." :D

[Jotown]

[quote]Originally posted by fantasticsound: [b]You guys seem to have missed a key point. EMI paid Robbie Williams [i]20 million[/i] (I assume we're talking dollars or British pounds.) for a [i]percentage[/i] of his touring profits. If the deal is that simple, he could make zip, nada, zilch, nothing in profit from touring and merch and [i]still[/i] walk away with the 20 million. ;) [/b][/quote]I hear you. I have been waiting by the phone all week long for a major label to offer me 20 million dollars against my touring profits. :confused:

[martianrebel]

[quote] All I am saying is that the idea that a buisness person would want to take advantage in a business deal should come as no surprise to anyone. That is what business people do. [/quote]Now this is where I have a problem... If an artist wants to be an artist for the sake of the art, then that artist will not care about the $$$$. However, if the artist is interested in sharing their art as a commercial enterprise, then the artist is a "business person." I don't agree with the record companies trying to get money from non-recordings (!!? :confused: ??) however, the basic reason for any company being in business is to SURVIVE. In order to survive, a business must make money. blah blah blah. In short, if an artist decides that it is worth 25% of their merch & concert revenue to take $20million, more power to them. Hell, I'd take $20,000 right about now! :D

[Saint Johnny B]

Well if the labels are as broke as they are always claiming they are, then how come they can drop 20 mill on guy who is unknown in the US? Makes you wonder.

[fantasticsound]

[quote]Originally posted by Johnny B: [b]Well if the labels are as broke as they are always claiming they are, then how come they can drop 20 mill on guy who is unknown in the US? Makes you wonder.[/b][/quote]Uh... EMI is based in the U.K. They apparently think he'll do well here, although I don't see where they're investing in his U.S. tour (when there is one) alone. It only mentions, [quote]His current European tour includes three nights at England's cavernous Knebworth Stadium, where he will cavort in front of [i][b]150,000[/i][/b] people each night. [/quote]Let's see... {450,000 people x $40 (and I'm pretty sure he gets at least that per ticket) x 35%} x 25% = {18 million x 35%} x 25% = 6.3 million x 25% = close to 1.6 million dollars for EMI, for [i]3 shows![/i] Sure, they're probably the largest shows, but I'm betting they'll come out ahead in the end. Remember, this doesn't even take into account EMI's 25% stake of the merch profit, which is 1/4 of a 100% markup from cost, or an 1/8 of the gross sales of merch. Let's see... $25+ for a shirt x ___ people x .... Besides, the labels haven't claimed bankruptcy, just extreme hardship. No one said they couldn't find $20 million to invest in as near to a sure thing as I can imagine.

[Saint Johnny B]

Neil, I'm just teasing. But not for a moment do I believe that the companies have not used every dirty accounting trick they can against the poor musicians, just like Auther Anderson and Enron cheated California while Bush and his people stood by and helped the fraud proceed. One of the industry reforms would be to rewrite the Federal Accounting Standard Board's (FASB) way of allowing the record companies to calculate and report royalities. I think it is FASB Rule 221, but it may be another rule number. If you'd like to read more about musician's reforms and initiative you can go to Don Henley of the Eagles site. It called the Recording Artists Coalition. Here's a link: [url=http://www.recordingartistscoalition.com]www.recordingartistscoalition.com[/url] Hope this helps. :)

[fantasticsound]

I'm right with you on their other dealings, especially with new artists. :rolleyes: I read Henley's testimony before Congress, so I'm well aware of his efforts to even the playing field. Thanks for the link, though, for those who are unfamiliar with attempts to change the old, inherently crooked and stacked in favor of the label system.