Irving broke the model.

Has there ever been a greater friend to the artist?  With this much power?

Geffen screwed Laura Nyro with the Tuna Fish Music deal, and ultimately sued Neil Young.  And Bob Dylan signed to Asylum and then abandoned Geffen, went back to Columbia.  But Irving’s artists stick with him.  Because no one can extract money from a corporation, no one can find more profit in a deal than Irving.  If Irving’s on your team, you’ve got Kobe, A-Rod and Lance Armstrong all wrapped into one.  Or, as Don Henley so famously said, "He may be Satan, but he’s our Satan."

Yes, you want Irving on your side.

And who was conventionally on the other side?

The label.

The way it worked was the label made the lion’s share of the money.  Forget the rationalizations, that they took all the risk, made the investment, for eternity, or the life of copyright in most cases, the label owned your records and profited from them.  Which is why Mo Ostin is richer than any concert promoter ever, and he worked for a public company!  Working for the label is where the money was.  Everyone who was a manager jumped ship in the nineties, for that huge cash.

Then it all imploded.  Not overnight, but gradually.  Took ten years for sales to go down 52%.  And the hubris of the labels was such that they dictated to Irving, saying it was "company policy."

So what did Irving do?  He rolled up all the managers and said it was FRONTLINE’S POLICY!  Frontline became bigger than any label.  And then the Eagles didn’t need a label at all, out of contract they went directly to Wal-Mart.  And not only were sales huge, profits were incredible!

Yes, Irving made it so the artist has all the power.

You people looking to make a 360 deal with the still extant major labels…  I’m scratching my head.  Irving fights your battle and then you concede after victory?  You give the label the lion’s share of the dough when you no longer have to?

But to play Irving’s way you need a few elements.  Talent.  And perseverance.  And Irving himself.  Easier to place faith in the crumbling monolith, then you have someone to blame when you fail.

But make a deal for music without a label and you keep almost all the money.  Not only at Wal-Mart, but with the newspaper, Prince got paid, and even Tunecore.

So when it comes to recorded music, the artist is in control, at least when it comes to profit participation.

And when it comes to concerts, an act with traction can easily get the entire gate.  In the case of Jimmy Buffett, more than the admission receipts.  Because the promoter is going to profit from parking, merch and concessions.

Nothing inherently wrong with this, but please note…the artist gets the big piece of the pie, everybody else fights for crumbs.

So I don’t see how Live Nation becomes hugely profitable.  Because they need the acts.  And Irving’s paved the way for the acts to get all the dough.  Sure, there’s money in concert promotion, when done right, but not big money, not Google money, not MTV money.  MTV benefited the artists, giving them exposure, but the profit was in the advertising, kept by Viacom…and ultimately MTV didn’t need the artists at all.  It’s different for Live Nation.  They can make sponsorship deals all day, but not if no one plays their buildings.  Live Nation is dependent on the acts, and always will be.

Rapino has to institute some discipline.  He has to take back some turf from the acts.  There’s a bit to be reclaimed, but not much.  Because where there’s profit, there’s Irving, saying there’s no show, no revenue without his acts.

Ticketmaster works…  Then again, Irving wants a cut of that for his acts too.

Synergies are Live Nation’s upside, new products that can be sold because all the elements are under one roof, ticketing, promotion and talent.  Used to be artists were skeptical of promoters, you could film the acts in concert, but you couldn’t do anything with the results, not unless you paid them exorbitantly.  Irving can broker new deals, new opportunities for revenue.  But, the lion’s share of the dough will always go to the acts.

So it’s the best of times and the worst of times.

It’s the best of times if you’re an artist.  Slavery has ceased.  Then again, it’s not that easy to get a job, to get a toehold in the new world.  Your master gave you work and food, but he also beat you.  You can sign up with the major label if you still want to be beaten, but that’s not too appealing.

The worst of worlds is if you’re on the business side of the equation, if you’re not the talent.  Because you’re going to survive on crumbs.

Irving should be able to make Live Nation work.  Then again, he’s best as an outside agitator as opposed to a chief executive.  That’s what a manager is, an outside agitator who prods other people to produce, results, both marketing and revenue.  Can Irving be the inside guy as opposed to the outside guy?  We’ll see.  But Live Nation stock is never going to be like tech…  Certainly not like Apple, with its double digit margins, in some cases approaching forty percent.  It’s more akin to a blue chip.  Assuming there’s discipline.  Can Irving get his house in order, instill discipline not only in Live Nation but the entire music industry, which he’s fundamentally changed and controls more than any other person?

We’ll see.

It all comes down to demand.  Can the act draw a crowd, is it someone people want to see?

Doesn’t matter how great the venue is, certainly doesn’t matter how great the promoter is, it comes down to the act.

Then again, people went to the Fillmores, the original ones, not the Live nation rebrands, for the Bill Graham experience.  But not everything sold out.  And business is better at the Hollywood Bowl, people like the experience at America’s number one outdoor venue.  But even the best promoter utilizing the best venue can’t fill the house for an unknown or has-been or just plain lousy act.

Concert promotion blew up in the late sixties and early seventies during the development and heyday of classic rock.  Analogize it to video games ten years ago, or Facebook now.  Music drove the culture, everybody wanted to participate.  Kicked the tires at Electronic Arts recently? Their numbers are no longer so rosy.  Video games are a mature business, and especially hit driven, just like the music business.

The music business was fading in the late seventies.  Corporate rock turned off the customer and disco didn’t fill the void and then died.  But along came MTV.  Nothing can make a star like television, when there are relatively few channels and everybody’s watching.  Sure, the MTV stars were instantly big and instantly over, but the channel just made new ones, the same way "Ally McBeal" is hot and is then replaced by "Grey’s Anatomy".

But then came the Internet.  And suddenly, everyone was no longer focused on the same thing, MTV, which had already reduced video airtime since it didn’t pay financial dividends.

The major labels and the wannabes continued to play the old game.  Let’s get that TV exposure, let’s get on terrestrial radio with its twenty two minutes of commercials an hour.  Broadcasting is king.  But suddenly, niche was king.  And a big story online lasts for days, not even weeks or years.  And the public was sick of being dictated to by rapacious corporations purveying whored-out "artists" only in it for a buck…hell, didn’t they all start clothing companies and do endorsements as soon as they gained some success?

So suddenly, it was much more difficult to build an act.  And those acts that did get traction were a poor imitation of the credible classic rock stalwarts.  They didn’t generate passion, people didn’t believe the words were their own, they’d go to the show to be a part of the mania, but the mania barely lasted.

Of course there are exceptions.  Lady GaGa for instance.  And certainly Taylor Swift, who sang from her heart so kids could connect (and adults too!)  But everyone else on the hit parade seemed to be produced by Timbaland or Dr. Luke, the acts were just a front.

The good news is bands like Arcade Fire and the National and yes, even the Hold Steady, could gain a toehold playing by the new rules. Making good music and allowing for online word of mouth to grow their audience, albeit not to stadium proportions.

Yes, stadiums.  That’s where the gig took place in the seventies.  Because Lee Abrams banded together the hits of the alternastars and turned it into a radio format that was the heartbeat of America.  And many of those bands are still out there.  Performing the same songs, unfortunately.  I mean you want to go to your high school reunion, but every year?  Can’t it be every five years?  But no, now the old acts have mortgages, they need the cash, they’re on the road incessantly, charging sky high prices to make up for the decline in record sales.

And Peter Grant turned concert promotion into a 90/10 split in favor of the artist and Irving Azoff and Howard Kaufman ramped the guarantees up into the stratosphere.

Live Nation, i.e. Clear Channel, nee SFX, helped.  It was a public company, with a ton of overhead and infrastructure, it needed to dominate.  It became like sports teams fighting over free agents.  Hurt me before I overpay again!  But, like EMI and Citi, Live Nation in many cases was bidding against itself.  But it all worked until all of the above took hold, there were few new acts and the old ones were too available and overcharged.  Isn’t rule one of dating to say you’re not available?  Unless it’s true love.  But true love in the music business went out with the twentieth century.  Sure, it has been rekindled in niches.  But how much money can you make off the niche?

And it all comes down to money.  Once upon a time, it was about the music, that was long ago.

But to the niche acts, that’s where it’s at.  And fans of music will go to the show, multiple times a year, for a hit of real music.  But they don’t want to see the old acts, nor the Top Forty wonders and they certainly don’t want to overpay.

So you can talk about the economy, all the external conditions in the concert promotion sphere, but they’re secondary to the acts, the music.

Will some of these niche acts blow up over time?

Yes, but to what degree, where we live in an on demand world where you experience only that which you want to?

Will there be ongoing demand for the old superstars?

Not at these prices.

Record labels are screwed.

And concert promotion is a river of nickels.

And the true profit in concert promotion is in the fees, which the public abhors.

Sound like there’s a problem?

Only if you’re a businessman.

Focus on the music and the road to salvation will not only appear, but will ultimately be paved with gold.

But want that cash now by throwing old and brand new against the wall and you’re living in dangerous territory.

So I’m sitting at the kitchen table, my feet atop it, searching for enough light to read my Kindle, thinking that this book has become generic, that it’s disappointing me and then…

Did you get that e-mail today?  The page everybody’s passing from Boing! Boing!, about the making of 10cc’s "I’m Not In Love"?

The Making of 10cc’s melancholy ’70s Moog hit, "I’m Not in Love"

I’m not in love with that song, but I’m a huge 10cc fan.  I heard "Clockwork Creep" on Sirius XM yesterday and it made my day, that someone else remembered, knew too.  Anyway, if you watch this video you’ll be impressed with the effort, the attempt to build something good and satisfying.  That doesn’t seem to be the goal these days, people just want to get famous and rich.

Rich.  That’s another thing that was addressed in "One Day".  How you reach a certain age and realize that’s where you are, you make peace with your surroundings, your economic status, you’re happy, assuming you’re in a relationship.  Are you in a relationship?  Or are you hobbled by your idiosyncrasies, convinced the lonely life is satisfying as you secretly yearn for companionship, and connection?

I didn’t start with "One Day".  I caught up on the newspapers first.  Two days worth.  Of course I read the highlights, the headlines online, but I was looking for the peripheral stories, the ones that make all the difference, like the one in yesterday’s "Times" about compilation Websites, like the HuffPo.  The new one is Techmeme.

Techmeme Offers Tech News at Internet Speed

I had the idea of doing one of these years ago, so it makes me feel good the concept is being verified.  Yes, I do feel left out, but is my core mission money or art?  Am I a writer or a businessman?

Maybe you’re both.  Maybe that’s the conundrum of life.  You’re everything in this imperfect world that’s become ever so much more incomprehensible.  You struggle to make sense of it, and you can’t.  Maybe that’s the younger generation’s advantage, they know it’s not supposed to make sense, that you can’t see everything and know everything and that it’s more about your core social group than individual achievement.

And this was all an intro to writing about Jennifer Egan’s "A Visit From The Goon Squad".  Can’t recommend it. Recommendations have to be so good that everyone will stick through the enterprise to get to the sweet, sticky center.  If you’re recommending something, it had better be instantly gripping, or you’ll endure the backlash.  Oh, don’t you know?  We’ve all got standings in our head, of credibility.  Push too many losers, push too much stuff at all and we start to ignore you, you’d have to lay fallow for years and come up with a killer rec for us to start paying attention again.

So I’m not recommending "Goon Squad", even though the framework is the music business.  But if you want to take a chance, the plot twists and the insights will creep you out and thrill you.

But that’s not really why I’m writing about it either.  I’m writing about it because of the two chapters at the end, where Egan writes in the future.  Or, as we used to say about Frank Zappa records, "How did he (she) come up with this shit?"  With one chapter done completely in PowerPoint.

All a long-winded story to tell you that we talk about that which takes risks, which pushes the envelope, to quote Chuck Yeager. Dr. Luke?  Katy Perry and "California Gurls"?  What’s there to say, they created a confection for radio play.

But Jennifer Egan…  She truly tried to do something different, she was shooting for the stars and there’s plenty to discuss.

I’ve had my Kindle for a little over fourteen months.  I’ve read over forty books.  That’s the digital era for you, change the format and we consume more.  Doubt me, just look at music.  People might not be paying, but they’re listening.

And now I’m way off point.

The point is the way David Nicholls described what happened to a character in "One Day", 88% of the way in, was so good that I was shocked, so good just like the elements of "I’m Not In Love".  Egan triumphed, she tests limits and creeps us out all the way through, Nicholls loses the plot sometimes, or it’s too much about plot, the structural device.  But when we experience truly innovative thinking, it stops us in our tracks.  Doesn’t matter if it’s books, movies, music, painting or sculpture.  The truly great shocks us and has us asking, HOW DID THEY COME UP WITH THAT?

That element has been lacking in mainstream music and films for far too long, no wonder they’re declining.  

Because it’s all about wonder.

We want a smile on our face.  We want to kick back and look at the ceiling, thrilled to be alive.  We want you to dig down deep and show us what you’re made of, shoot for the head and heart instead of the wallet.

The acts have to play to empty seats.

So Barbra Streisand decides to go back on tour.  Makes a deal with Michael Cohl.  You know the drill, he advances a shitload of money and you perform.  Only one problem, Barbra couldn’t sell the tickets.  Prices were too high, she’d already done her farewell tour.  But do you think Michael Cohl’s gonna lose all that MONEY!  Of course not.  So he asks Barbra for a reduction. America’s Movie Star Diva?  OF COURSE NOT!  So then Cohl whips out his ultimate trump card.  No problem, I’ll just let you play to an empty house.

Well, not truly empty, Barbra sold some tickets.  But half-empty?  Two-thirds empty?

Barbra Streisand caved.  She made less money, but her reputation remained intact.

Live Nation’s got to stop giving away the tickets, stop doing discount deals and let the acts play to half-filled houses.  Believe me, then the managers and agents will cave.

But Live Nation won’t do this.  Because they want the parking and concession revenue.  And it’s a public company.  Hell, are you scratching your head wondering why no fee shows were only available in June?  Live Nation had to get that money NOW, for its quarterly earnings report!

In order for Live Nation to survive, it has to exact some pain.  The acts have to play for lower guarantees.  You can say they can go elsewhere, but really?  Sure, GaGa doesn’t need Live Nation’s advance, she can get it from somewhere else.  But Styx?  The Doobie Brothers?  All those acts playing Live Nation sheds?

And it’s not only the seventies and eighties has-beens.  So many of the modern acts don’t earn their guarantees.  But all of them like the fact that Live Nation will buy the entire tour, guarantee a shitload of money.  What if Live Nation says NO!

Do you really think JAM and IMP are gonna pay those heinous guarantees?  And AEG is about creaming the top off the business.  And how much money is AEG making anyway, does Phil Anschutz want to take MORE risk?

It might hurt its stock in the short run, but Live Nation has to exact pain in the marketplace in order to not only cure its ultimate stock price/business, but the touring industry.  Overpayment must stop.

A hell of a lot of other stuff must stop too.  Check out this sales receipt:

A $20 ticket goes to $49.75.

The ticket was $20 and the ultimate price was $49.75, after fees.  That’s INSANE!  And you wonder why they hate Ticketmaster.  But the fees are about kickbacks, promoter profit, and the acts won’t go to all-in ticketing, they want to put the blame on the ticketing giant.  In other words, fighting amongst the inside players is hurting everybody.

The model’s got to change.  Guarantees have to come down, you’ve got to earn your keep.

And if Live Nation is not willing to take this tack, its concert promotion business could implode, without lower guarantees, the model does not work.  So either Live Nation fixes it, or Live Nation goes away.