Slashdot Mirror
Record Labels Looking for a Cut of Tour Revenues
Anonymous Coward writes "As many a Slashdotter has pointed out, musicians make their money not from selling records but from going on tour. Now record labels are trying to get a piece of the action. '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.'"
This is what many slashdot users have been suggesting they do, so I don't understand the negative attitude all of the sudden. Remember the "they're going to have to change their business model" speech everyone was giving a couple of years ago? This is that change. Mind you, in typical record label fashion, they aren't going to mark down CDs any or ease off of the filetrading litigation, because that would still cost them *something*. That is the part everyone should criticize, that there is no quid pro quoa (spl?). Sure, they don't have to give their customers something in exchange no the markup on ticket prices we will no doubt see, but it might hurt them in the long run if they don't...
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Crudely Drawn Games
I found this interesting from the article:
... just have to be seen on a big screen.
> 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
So in total, money spent on music has gone down from 14.3 to 13.6 billion. A small change in a time of economic uncertainty. I imagine people will always spend a similar amount of money for entertainment, just the patterns of expenditure change. Ripping an MP3 off the net will never compare to a live performance.
Similarly, movie studios don't have to worry. Seeing a decent movie on DivX makes me want to go to the cinema for the proper experience. LOTR, Matrix,
Anyway, the studios should make money where the consumer wants to spend it, and stop whinging when their lack of innovation stops them from earning.
Ponxx
I mean come on, there's a way for them to bilk the artist out of more of their earnings, and they didn't do it? Robbie Williams signed an 80 million pound ($130,000,000) contract with EMI (bbc link: http://news.bbc.co.uk/1/hi/entertainment/music/267 3983.stm).
For an artist who is virtually unknown in the US, that's enormous! I can only speculate that part of the contract included 'advances' on expected revenue from his tours...
I know I'd rather have cash in hand than gamble on the vagaries of teeny pop tastes...
This is not news. Labels have been digging their claws into concert revenue for years. When I was with the first Warped Tour, Sony was taking a 20% (if I remember accurately) cut from all Merch sales which dramatically reduced the artist's share since they didn't want to raise T-shirt prices for the fans. When you add a Bill Graham (west coast promoter) fee of 35% on top of this at the former Concord Pavilion, it was enough to cause all the performers (except Sublime) to pull all their merch from the booths for that show. Fans end up paying regardless.
"You know Myra, some people might think you're cute. But me, I think you're one very large baked potato."
As many a Slashdotter has pointed out, musicians make their money not from selling records but from going on tour.
Correction: As many a misinformed, incorrect Slashdotter etc., etc...
Writing royalties are where artists make the big bucks.
The idea that concerts and touring are the big money-makers is quoted fairly frequently, although it is the fantasy/excuse created and embraced by those who want, want WANT to believe that downloading free music has no ill effect on artists or performers.
Yes, this is a bit of a digression, but let's keep the facts straight.
RTFM; please, I beg you.
At some point they are going to piss off all the consumers, who will stop buying anything.
They will also piss off all the musicians who will no longer join the *AA in the first place.
This is just one more step towards that 'apparent' goal.
---- Booth was a patriot ----
(emphasis added)
Mariah Carey was paid $21 million when she signed with EMI... and another $28 million to walk away. I think that qualifies as "rich." I don't think she has to worry too much about money.
Source: http://www.foxnews.com/story/0,2933,43736,00.html
Only Women Bleed (Sex, Sharia remix)
Ten years ago, Metallica's original contract with Elektra (signed in 1984), expired and there was a lot of competition from every label in the business to sign them to a new contract (after all, their untitled 1991 album was well on its way to being one of the bestselling albums of all time, and its predecessors were storming off store shelves). Metallica and Elektra reached an agreement that basically made Metallica completely independent of the RIAA. The arrangement that was reached was the creation of a corporation E/M Ventures, with the four members of the band, their management (Q Prime), Elektra being the sole shareholders (IIRC, the breakdown was something like 22% Lars Ulrich, 22% James Hetfield, 16% Kirk Hammett, 10% Jason Newsted, 15% Q Prime, and 15% Elektra). Elektra transferred the copyrights on all the catalog recordings (1983-1991) to E/M as their investment, along with a record deal that would pay E/M Ventures royalties equal to 50% of the wholesale price (in other words about $4 to %5 per album, or $7 to $8 per double album), with no deductions for anything (all record production and promotion expenses would be handled by E/M). This deal only expires when a simple majority of the voting shares decides to terminate it and buy back Elektra's share.
Elektra basically makes little to no money (apart from their share of E/M's profits) on the sale of a Metallica CD... all costs related to manufacturing and distribution are eaten by them. However, they're making this money with little risk; Metallica can put out basically anything and it will go platinum, simply on the strength of a rabid fan-base (much like Rush's, but probably at least twice the size).
E/M owns all aspects of Metallica's business interests. The tours are done by E/M (or subsidiaries thereof). The merchandising revenues are to E/M. Thus, Elektra gets a cut of all those revenue streams, which are actually even bigger than the recording streams. Elektra also gets a cut of international record sales by Vivendi and Sony. Metallica gets out of this what effectively amounts to total independence from the system. Even if Elektra doesn't want to release something, they're obligated to manufacture and distribute it, otherwise they forfeit their share (for no compensation, through breach of contract).
On the other hand, there were stories about how the artists would occasionally score a victory. I think it was Dean Martin, beholden to his label for seven more albums, who showed up, dropped seven albums worth of shit tracks on the desk, and said "Ciao!"
You only get away with crap like that once.
I hear the standard boilerplate has now evolved to the point where it's the label that gets to decide what counts as a "marketable album" and they base your contract on a certain number of "marketable album".
Hence the whole Prince thing. He wanted to go more experimental, but the record companies weren't having it, and his contract prevented him from putting out anything for anybody else until they got what they wanted.
So much for the "creativity" that the RIAA purports to protect.
That Jesus Christ guy is getting some terrible lag... it took him 3 days to respawn! -NJ CoolBreeze
True, if the guy makes more than $80 million he'll have to give some of his profits to the record lable. But he gets $20 million dollars to invest as he pleases right now.
Both sides win because the needs of each side are different. One side needs/wants cash quickly while the other side prefers more cash but is willing to wait for it.
Instead of insurance you might want to think of it like an IPO. You're giving away some of your potential profits in exchange for instant cash; something not easily come by.
TW
Or maybe they offered him $80 Million upfront to sign a seven record deal and agree to take a cut of his future non Record label earnings as well as pay record promotional expenses out of their own pockets whilst Robbie agreed to produce the music in his own studio?
Economic Left/Right: -0.62
Social Libertarian/Authoritarian: -3.69