Led Zeppelin was reviled by the critics.  Garnering little mainstream press, the band’s first album built momentum over the spring and summer of 1969 and then in the fall, the band released the less than creatively entitled "II", "Whole Lotta Love" blistered onto the airwaves and suddenly, Led Zeppelin was the biggest act in the business.

How did we know?

Ticket sales.

This is very different from today.  Where GaGa sells out venues and is lauded by the press as a genius.  We can debate whether GaGa is, but one thing’s clear, she’s not changing the business.  Nothing she’s doing is helping other artists whatsoever, except for maybe proving that expensive videos have a home online.

But Zeppelin was different.  Managed by an old wrestler, it soon became apparent that every gig would sell out, that tickets would be unavailable.  This was not the fake sellout of today, where media gives the impression tickets are unavailable.  You really couldn’t get a ticket to see Led Zeppelin, and if this was so, why was the promoter being paid so well?

Go to the racetrack.  The favorite pays poorly.  Because it’s easy to bet on the favorite, based on previous races you know the odds are good.  So, if a promoter was booking Led Zeppelin, why should he be compensated as if he promoted Joe Wannabe, when it was evident that all tickets would sell out?

Suddenly, the split went from 50/50 to 90/10, in favor of Led Zeppelin.  And ever since, stars have garnered the lion’s share of the box office.  Thank Peter Grant.  Unafraid of the old school promoters, he demanded almost all of the money.  Sure, a promoter was entitled to a profit, but only a slim one, since it was a no-brainer to promote Led Zeppelin.

Record labels have stated forever that they’re necessary.  That they must take the lion’s share of the money, since they’re taking all the risk.  But this didn’t work for superstars, no matter how well they were paid, the label did better.  But the label pointed to its failures/costs and there was no other way to sell music and get paid than to utilize the major label distribution system.

Until today.  You might need a major label’s marketing and promotion division (even these can be hired independently), but you certainly don’t need their distribution.  Anybody can distribute product online.

So how did the major labels react?

By asking for more money.  Signing their death warrant.

The only way for the major labels to survive is to put in place more equitable deals, with transparent accounting.  As for the hit to shit ratio, they’ve got to spend less on new acts, and make sure more hit.  If Pixar can succeed with each and every movie, why does a major record label only succeed one out of ten times?

In other words, talent has all the power.

You must read Malcolm Gladwell’s story "Talent Grab" in the October 11 issue of "The New Yorker".  It chronicles the inflation of talent pay, using baseball as the primary paradigm.  Used to be the owner made all the money.  Now it goes to the players.  And what changed?  The injection of Miller, who convinced the players that the owners were not benevolent dictators, but adversaries who were ripping them off.

You see the last forty years have been about talent getting the lion’s share of the dough.  And that’s what killed the major labels.  As soon as there were alternatives, the superstars went elsewhere.  And will continue to do so.  Unless the labels make fair deals.  But if they cut fair deals for stars, they’ll have to cut fair deals for wannabes, and unwilling to set a precedent, they’d rather stand on ceremony and fade away.

Talk to lawyers.  And so many managers.  They complain about the labels, but they say their hands are tied.  But not Irving Azoff.  He rants and raves, squeezing more money out of the labels.  Which makes the other managers look bad.  Then Irving rolled up a lot of managers to become more powerful than any label.  But Irving is no longer solely in the management business, he’s in the promotion business now too.  And as the "Wall Street Journal" so eloquently put it, concert promotion is a river of nickels.  How can Irving turn the behemoth around?

Any new product Live Nation invents, Front Line is going to want the lion’s share of.  If Irving doesn’t deliver this, the acts will bolt. The modern history of the touring business shows the promoters trying to create new revenue streams outside the agent/act’s purview just to eke out a living.  Hasn’t Michael Rapino stated that the extras, parking and ticket fees, food and beverages, are the only profitable area?  That Live Nation breaks even, at best, on the talent/gate receipts?

Then again, only superstars sell out.  And few of them do anymore.  And many old acts, long in the tooth, don’t come close to selling out.  And new acts can barely draw anybody.  So, are the wheels about to turn?  Are stars still going to get their 90/10, in the case of Jimmy Buffett, sometimes over 100% of the gross?  Yes.  Because promoters need them in their buildings.  They know they’re gonna make a profit.  A thin one.  But a profit is guaranteed.  But mid-level acts?  New and developing acts?

In this case, the promoters have it all wrong.  Rapino has said that Live Nation has to pay the acts or someone else will…AEG, casinos, JAM, IMP…  But AEG is not about risk, it’s about paying for superstars.  Casinos have pulled back.  And JAM and IMP are not everywhere.  What if Live Nation/Rapino suddenly stopped overpaying developing and mid-level talent?

Sure, other promoters could swoop in.  But a bad deal for Rapino is a bad deal for everyone.  In other words, promoters could wise up and start paying all acts not guaranteed to sell out less.  They’re going to have to, to stay in business.  When are they going to begin?

Is Irving Azoff so powerful, is talent so powerful that it can dictate in all facets of the business?

Maybe not.  If that paradigm plays out, there will few left to pay.  Or there will only be stars.  Or, new acts will use new promoters, who will end up owning the business.

We’re at a turning point.  No act that can sell records is going to make a major label deal.  Only wannabes will.  But the deals are so heinous, new entities are arising that are partners with the acts as opposed to adversaries.

Suddenly we need promoters to invest in acts, to develop acts.  And they must be able to make more money along the way.  The SFX roll-up resulted in a vacuum.  No one would go into concert promotion because they knew that once a developing act made it, they’d go with Live Nation or AEG.  So, will new promoters enforce loyalty via contract, if I build you you must continue to play for me, like Doug Weston famously did at the Troubadour?  Will Live Nation start building new acts to ensure its survival?  Because he who owns the new acts owns the future, and Live Nation is getting out of the new act business.  Live Nation did not promote the Electric Daisy Festival, Insomniac Events did.

Music is going to resemble America.  Winners and losers.  Winners will make a fortune, like A-Rod, but journeymen may only make a minimum salary.  In order to survive on the business end you’ve got to bring more to the picture than your money, and you’ve got to deliver results.  A promoter must promote if it wants to keep the act, just not put tickets on sale.  But for this activity, a promoter will be better paid.

The major labels ran into the rocks.  They’re essentially unsavable.  Their proprietors keep bitching that the old days won’t come back.  Will Live Nation execute the same game plan?  Living in the past at the sake of the future?  We’ll see.