Live Nation's Michael Rapino Talks Streaming and Madonna-Like 360 Deals

[Brendanlovesu1 12,010]

http://www.billboard.com/articles/business/7385849/live-nation-michael-rapino-upselling-360-deals

 

 

Ten years and one merger with Ticketmaster later, Live Nation has grown its concert business to 25,000 shows and 73 million customers annually. At the helm of that now-global live-events empire is president and CEO Michael Rapino, who sat down recently with Recode’s Peter Kafka to talk shop -- and explain what he means when he says "we’re closer to a travel company than we are to a record label."

 

ON WHY ARTISTS HIT THE ROAD:

 

"For the first eight years, Wall Street would say to me, ‘Oh my god, what's this summer gonna be like?' -- they wanted to equate it to the movie studios. ‘Where's your Spider-Man?' And I would always say that I have no supply problems this summer. I am not worried that there's not gonna be enough great artists. Why, because 95 percent of the revenue any artist is gonna make is on the road. And artists have bills just like you and me. So artist need to go on the road… It's really good economics."

 

ABOUT THAT BUSINESS MODEL:

 

"We're gonna promote 25,000 shows this year. The reason that we've been able to deliver that kind of growth and also be in the artist management business is the artist does believe that we are artist-centric. We're gonna put the artist where ever is best for the artist. So what we do, our biz model is once we have the consolidated content, it's to figure out whatever venue will pay us the best economics to bring that scale. So it could mean the Barclays Center or MSG is better economically for me than Jones Beach. Because they're gonna pay me an ongoing fee and rebate to bring content there. So our job is to figure out where the best economics are to put the content."

 

 

ON THE ART OF THE (UP)SALE:

 

"At the core, we’re closer to a travel company than we are to a record label. 73 million fans will come to a Live Nation show this year and an average customer goes to two-and-a-half shows a year… So our business, if we can get that customer to three shows a year… or quite honestly, whether 73 million people if I sell them one dollar more a year right, if I can upsell you. If I can get you to buy the VIP package versus the P1, if I can get you to buy the upgraded t-shirt, if I can enhance your experience… my business will do very well if we can just continue to figure out how to superserve 73 million fans, grown 73 million fans by incremental shows, incremental events, and incremental spend."

 

ON TICKETMASTER’S FIGHT SCALPERS/SECONDARY MARKETS:

 

"It’s an $8 billion industry… That’s like cocaine money. That's going to attract a lot of good people."

 

ON 360 DEALS (AND THAT TIME THEY ADDED ALBUM DEALS TO THE MIX):

 

"It's an insurance policy for the band. That motive to us is the best. We're fully vested, we've got sponsorship, we're trying to bring deals to the table to build the pot. At that point, what happened is, when we started talking to the U2's and the Madonna's about this kind of deal, they'd say ‘geez, to buy my rights to touring for ten years, that's 85 percent of my value… why don't I just throw the record on top of that. It's almost like a cherry on top of the… We didn't wake up thinking we wanna be a record label but we went, ‘I get it,' because that's their leverage, so let's do it. Now, we didn't do it with U2, which was smart — we just stayed to our knitting. Madonna, we ended up taking the cherry."

 

ON WHY IT DIDN’T WORK:

 

"We're not in the rights business. Back then we didn't have any secret sauce on how to distribute that record than somebody else. That's why we thus sold Shakira and Madonna back to the label to recoup our record investment."

 

ON WHETHER THEY’LL DABBLE IN STREAMING:

 

"I think we'll leave the streaming arms race to the big boys right now. I think Spotify's done a fabulous job. Apple has the scale and muscle to keep getting it better and better and… obviously we're partners with Jay Z and our non-investors but huge supporters of Tidal."

 

 

Listen to the full interview here:

 

 

http://www.recode.ne...teen-disneyland

 

[Fighter 28,798]

IDK. Hopefully after her last interscope album she'll go back to a real record company, this whole thing didnt really work out.

[groovyguy 63,856]

Wow. Depressing read but very enlightening. Explains a lot. So this deal turned out to be a bad decision. Live Nation does not seem to care about their artists or music.  Madonna needs to get out as soon as she can. 

[danrom 89]

maybe now she will work through tidal instead of record companies.

[dance2nite 34]

She still owes Interscope one more album. The Touring contract is complete now though after RH. 

[IconicQueen 315]

Horrible business, treating her like shit. She owes interscope one more album, either compilation or studio. Just put together a damn compilation then get out of there. Do not ruin yet another studio album on them or soon her career really will be over and she'll be making toothpaste commercials like Shakira and all the other artists who have become hitless under them. GET. OUT.

[Enrico 15,823]

Can the Rebel Heart Tour cd be considered an album? In this case this will be her last one.

 

How sad the old way of making records and buying records physically doesn't exist anymore.

I miss the album booklets with lyrics and dedications: the RH one was horrible, with many pages full of... nothing, just song titles (with no credits!!).

I like it when you used to have radio premieres and video premieres.

O God I feel so old.

[Madame Madonna 4,107]

I think that this is the reason why this era has such a lack of chart hit songs.

 

For example Bitch I'm Madonna has 191,351,088 youtube views now but it even didn't on Billboard top 10.

 

I also thinks that she needs some change.

 

Make a Rebel heart tour CD or Tears of crown whatever CD then get out of there as possible as soon!

 

And no thanks with tilda. Don't even think about it as a one of option.

[Enrico 15,823]

I still can't accept the fact that Ghosttown and Bitch didn't make it in the chart, while there is so much crap around.