Led Zeppelin was reviled by the critics.\u00c2\u00a0 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.<\/p>\n
How did we know?<\/p>\n
Ticket sales.<\/p>\n
This is very different from today.\u00c2\u00a0 Where GaGa sells out venues and is lauded by the press as a genius.\u00c2\u00a0 We can debate whether GaGa is, but one thing’s clear, she’s not changing the business.\u00c2\u00a0 Nothing she’s doing is helping other artists whatsoever, except for maybe proving that expensive videos have a home online.<\/p>\n
But Zeppelin was different.\u00c2\u00a0 Managed by an old wrestler, it soon became apparent that every gig would sell out, that tickets would be unavailable.\u00c2\u00a0 This was not the fake sellout of today, where media gives the impression tickets are unavailable.\u00c2\u00a0 You really couldn’t get a ticket to see Led Zeppelin, and if this was so, why was the promoter being paid so well?<\/p>\n
Go to the racetrack.\u00c2\u00a0 The favorite pays poorly.\u00c2\u00a0 Because it’s easy to bet on the favorite, based on previous races you know the odds are good.\u00c2\u00a0 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?<\/p>\n
Suddenly, the split went from 50\/50 to 90\/10, in favor of Led Zeppelin.\u00c2\u00a0 And ever since, stars have garnered the lion’s share of the box office.\u00c2\u00a0 Thank Peter Grant.\u00c2\u00a0 Unafraid of the old school promoters, he demanded almost all of the money.\u00c2\u00a0 Sure, a promoter was entitled to a profit, but only a slim one, since it was a no-brainer to promote Led Zeppelin.<\/p>\n
Record labels have stated forever that they’re necessary.\u00c2\u00a0 That they must take the lion’s share of the money, since they’re taking all the risk.\u00c2\u00a0 But this didn’t work for superstars, no matter how well they were paid, the label did better.\u00c2\u00a0 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.<\/p>\n
Until today.\u00c2\u00a0 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.\u00c2\u00a0 Anybody can distribute product online.<\/p>\n
So how did the major labels react?<\/p>\n
By asking for more money.\u00c2\u00a0 Signing their death warrant.<\/p>\n
The only way for the major labels to survive is to put in place more equitable deals, with transparent accounting.\u00c2\u00a0 As for the hit to shit ratio, they’ve got to spend less on new acts, and make sure more hit.\u00c2\u00a0 If Pixar can succeed with each and every movie, why does a major record label only succeed one out of ten times?<\/p>\n
In other words, talent has all the power.<\/p>\n
You must read Malcolm Gladwell’s story "Talent Grab" in the October 11 issue of "The New Yorker".\u00c2\u00a0 It chronicles the inflation of talent pay, using baseball as the primary paradigm.\u00c2\u00a0 Used to be the owner made all the money.\u00c2\u00a0 Now it goes to the players.\u00c2\u00a0 And what changed?\u00c2\u00a0 The injection of Miller, who convinced the players that the owners were not benevolent dictators, but adversaries who were ripping them off.<\/p>\n
You see the last forty years have been about talent getting the lion’s share of the dough.\u00c2\u00a0 And that’s what killed the major labels.\u00c2\u00a0 As soon as there were alternatives, the superstars went elsewhere.\u00c2\u00a0 And will continue to do so.\u00c2\u00a0 Unless the labels make fair deals.\u00c2\u00a0 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.<\/p>\n
Talk to lawyers.\u00c2\u00a0 And so many managers.\u00c2\u00a0 They complain about the labels, but they say their hands are tied.\u00c2\u00a0 But not Irving Azoff.\u00c2\u00a0 He rants and raves, squeezing more money out of the labels.\u00c2\u00a0 Which makes the other managers look bad.\u00c2\u00a0 Then Irving rolled up a lot of managers to become more powerful than any label.\u00c2\u00a0 But Irving is no longer solely in the management business, he’s in the promotion business now too.\u00c2\u00a0 And as the "Wall Street Journal" so eloquently put it, concert promotion is a river of nickels.\u00c2\u00a0 How can Irving turn the behemoth around?<\/p>\n
Any new product Live Nation invents, Front Line is going to want the lion’s share of.\u00c2\u00a0 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.\u00c2\u00a0 Hasn’t Michael Rapino stated that the extras, parking and ticket fees, food and beverages, are the only profitable area?\u00c2\u00a0 That Live Nation breaks even, at best, on the talent\/gate receipts?<\/p>\n
Then again, only superstars sell out.\u00c2\u00a0 And few of them do anymore.\u00c2\u00a0 And many old acts, long in the tooth, don’t come close to selling out.\u00c2\u00a0 And new acts can barely draw anybody.\u00c2\u00a0 So, are the wheels about to turn?\u00c2\u00a0 Are stars still going to get their 90\/10, in the case of Jimmy Buffett, sometimes over 100% of the gross?\u00c2\u00a0 Yes.\u00c2\u00a0 Because promoters need them in their buildings.\u00c2\u00a0 They know they’re gonna make a profit.\u00c2\u00a0 A thin one.\u00c2\u00a0 But a profit is guaranteed.\u00c2\u00a0 But mid-level acts?\u00c2\u00a0 New and developing acts?<\/p>\n
In this case, the promoters have it all wrong.\u00c2\u00a0 Rapino has said that Live Nation has to pay the acts or someone else will…AEG, casinos, JAM, IMP…\u00c2\u00a0 But AEG is not about risk, it’s about paying for superstars.\u00c2\u00a0 Casinos have pulled back.\u00c2\u00a0 And JAM and IMP are not everywhere.\u00c2\u00a0 What if Live Nation\/Rapino suddenly stopped overpaying developing and mid-level talent?<\/p>\n
Sure, other promoters could swoop in.\u00c2\u00a0 But a bad deal for Rapino is a bad deal for everyone.\u00c2\u00a0 In other words, promoters could wise up and start paying all acts not guaranteed to sell out less.\u00c2\u00a0 They’re going to have to, to stay in business.\u00c2\u00a0 When are they going to begin?<\/p>\n
Is Irving Azoff so powerful, is talent so powerful that it can dictate in all facets of the business?<\/p>\n
Maybe not.\u00c2\u00a0 If that paradigm plays out, there will few left to pay.\u00c2\u00a0 Or there will only be stars.\u00c2\u00a0 Or, new acts will use new promoters, who will end up owning the business.<\/p>\n
We’re at a turning point.\u00c2\u00a0 No act that can sell records is going to make a major label deal.\u00c2\u00a0 Only wannabes will.\u00c2\u00a0 But the deals are so heinous, new entities are arising that are partners with the acts as opposed to adversaries.<\/p>\n
Suddenly we need promoters to invest in acts, to develop acts.\u00c2\u00a0 And they must be able to make more money along the way.\u00c2\u00a0 The SFX roll-up resulted in a vacuum.\u00c2\u00a0 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.\u00c2\u00a0 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?\u00c2\u00a0 Will Live Nation start building new acts to ensure its survival?\u00c2\u00a0 Because he who owns the new acts owns the future, and Live Nation is getting out of the new act business.\u00c2\u00a0 Live Nation did not promote the Electric Daisy Festival, Insomniac Events did.<\/p>\n
Music is going to resemble America.\u00c2\u00a0 Winners and losers.\u00c2\u00a0 Winners will make a fortune, like A-Rod, but journeymen may only make a minimum salary.\u00c2\u00a0 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.\u00c2\u00a0 A promoter must promote if it wants to keep the act, just not put tickets on sale.\u00c2\u00a0 But for this activity, a promoter will be better paid.<\/p>\n
The major labels ran into the rocks.\u00c2\u00a0 They’re essentially unsavable.\u00c2\u00a0 Their proprietors keep bitching that the old days won’t come back.\u00c2\u00a0 Will Live Nation execute the same game plan?\u00c2\u00a0 Living in the past at the sake of the future?\u00c2\u00a0 We’ll see.<\/p>\n
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