From 360 to 300 (Deal)?

08.13.08 9 years ago 6 Comments

Looks like while Live Nation was busy plucking away major artists from seemingly every genre of music, they forgot one thing – they don’t know how to service and promote albums. After years of dealing strictly with promoting concerts and tours, they’ll now be faced with the task of marketing these albums as well as working singles for radio/video play. Not that it’d be hard to promote a new Madonna, Shakira, Nickelback, or Jay-Z album. You see how much Def Jam’s been involved with all The Blueprint 3 news we’ve heard within the last week. With artists like this it’s easy to get the word out about their projects.

It’s when it comes to the behind the scenes work that has Live Nation considering working with the record labels to handle the marketing, distribution, and promotion of the albums. On one hand it saves them money from having to create their own departments to handle these costly tasks. It also instantly gives them contacts with radio programmers, MTV, BET, and securing prime placement in retail. But on the other hand, it could severely cut into what they once thought to make in profit from these deals:

“Instead of banking all the upside on album sales, as was once envisioned with these so-called “360 deals,” Live Nation would likely collect a less lucrative outsourcing royalty of between 25 percent and 35 percent, based on other industry licensing deals.”

Along with the fact that a bad (or archaic) business model is the reason that opportunities like these even became a possibility for Live Nation, this is a decision that will have to be weighed heavily. Luckily for CEO Michael Rapino, he’ll have time to come to a decision as the first album won’t be released for at least 18 months.

It’ll be interesting to see what they decide on as they’re basically navigating this without a map with everyone watching to see if it works. No pressure.

Live Nation May Be Forced To Lean On Labels [NY Post]

Previously Posted — “Roc Nation”

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