Who's going to win the music business war?
It certainly won't be Sony, or
BMG. Sony wants out of the music
business. As does BMG. Unfortunately, no one can meet their price,
so they're holding for now. But they want to get out. Oh, there's an
expansion into music publishing, but no non-traditional ventures are being
contemplated. It appears they're going to run the ship until Clive Davis
dies or becomes too frail to work, then they're going to freak out. As for
Rick Rubin's recent deal with Columbia? If only you could sell CDs, if
only online weren't about singles. If only revenue were growing instead of
Then there's Universal Music. With
the biggest market share, operating in a vacuum. Doug Morris and Jimmy
Iovine wanted to be innovators at the turn of the century, with the Farm Club
and PressPlay, but after being burned they've changed strategy. Now it's
all about the check. They're sitting upon a huge copyright asset, if you
want to distribute music in the new world, you've got to go through them, and
you've got to pay for the privilege. Planning for the future, insuring
their place in the coming landscape? Not really an issue. Especially
since the OWNER of the operation wants out, but like Sony and BMG can't find
anybody to sell to, not at a reasonable price.
Then comes EMI. EMI has Ames, but
not much else. Roger Ames knows where every dollar in a record deal is
buried. He's what Warner needs. But EMI does not have the assets of
Warner. EMI is in survival mode.
And then there's Warner. Unlike his compatriots owning major labels,
Richard Parsons decided to get out, he didn't want to weather the storm, he
wanted his money now, before the asset went down in value even further.
So, the company was sold to private equity interests. Although
Warner is embracing digital strategies, there's no overall music business play.
Oh, they want to strong-arm their artists into giving them rights, but
there's no desire to truly get into the touring or management businesses.
Hell, their interest in Azoff's company was just sold to Barry Diller.
Is it now his time? Is this his David Geffen moment? Now that
DreamWorks has failed, now that Geffen is a billionaire without portfolio, is
Irving plotting to take over the music business?
Well we read that Jeff Kwatinetz was taking over the music business. But
Firm clients come and go, as do their managers, Jeff's always striking up
innovative record deals that generate no heat. His moment appears gone.
And then there are our friends up north, Terry McBride and his Nettwerk crew.
They're the ones talking innovation, but that's all in service to their
artists, they're managers through and through. As are their east coast
counterparts at Q Prime. Cliff and Peter experienced a debacle in venue
ownership, they've now got Snow Patrol and Jimmy Page, but they're hands-on
managers, they're not interested in the tectonic plates, tilting the world at
But Michael Rapino is.
Michael Rapino is younger than most of the household names. He hasn't made
his fortune yet. This is his time to make a move. He's sold what
doesn't interest him, and bought what does. He's got not only Trunk, but
MusicToday. And suddenly, he's in ticketing.
But isn't that the domain of TicketMaster?
The coming music story is how new players akin to Microsoft will enter the
sphere and eat up market share. Computer-savvy tots with their ears to the
ground, who know what the public really wants. No deals will be made with
majors, if there are record companies at all, you presently don't know their
names. But these acts WILL have to play live. And who will control
Yes, right now we've got a giant struggle over the live business. Who will
be the gatekeeper, who will cash the check. The record companies are
also-rans. And the online distributors? With licensing so
complicated, on such onerous terms, smart money is staying out, there's no
movement in that world, it's been ceded to iTunes.
But in the physical world, we've got a jockeying for position heretofore unseen.
And it all comes down to Irving.
Is Irving just in it for the check? Or does he want the power?
Who knows. But if you want to know what happens in the future, watch him.
Irving assembled a management powerhouse to neutralize the labels, to prevent
them from dictating to him. FRONTLINE'S policy would be of equal weight to
the label's policy.
But you've got to look back further. To AEG. Irving Azoff built AEG.
By resuscitating ConcertsWest. Eventually Irving sold his interest
to Anschutz, and Randy Phillips took the day to day reins, but Irving's got a
special place in their board room. He's entitled to favors. And he
returns favors. That Live Nation doesn't get.
But Live Nation needs Irving's acts. Irving's partner Howard Kaufman has
kept the sheds alive for years. Albeit at high prices, but you've got to
have SOMEBODY to bring in the customer.
Can you say Def Leppard/Journey? Can you say Chicago/Earth, Wind &
Fire/this year's oldie? Can you say Fleetwood Mac?
Michael Rapino cannot afford to piss off Irving Azoff. Now more than ever,
Irving's got the biggest stable of acts, and concert promotion is all about the
But now Irving has made Rapino's life even worse. He's gotten in bed with
the thorn in Rapino's side, TicketMaster.
Oh, there's been a link forever. With the name Larry Solters. Yes,
Irving's positively old school, he knows it's about relationships, and
information, and he's got both.
So now what?
Well, IAC/TicketMaster bought the Thomas H. Lee/Bain stake. But Warner's
still got a piece of Frontline. Is this significant? Well, maybe to
the point that Irving's got a special relationship with Warner. At least
until he gets frustrated and makes their life hell.
But it's Irving who controls the landscape now. Suddenly, Irving's a
linchpin in Warner, Live Nation, IAC/TicketMaster... Suddenly, the
brilliant poker player has more cards than anybody. How's he going to play
them? What does he WANT?
Warner, Live Nation and TicketMaster are fighting for their lives. Good
idea to line up with TicketMaster, kind of like Sirius buying Howard Stern.
If Rapino sells his own tickets, TicketMaster is fucked. But if
Irving's in between, does TicketMaster keep its deal?
And Irving controls the only thing that counts. The talent. It's not
like movies or TV, you can't create a new roster out of thin air.
Maybe Irving just wants a check. He's certainly sold for a price in the
past. Or maybe he wants to control the business. If not in name,
One thing is clear. The wagons are circling, we're in the final throes of
consolidation. Everyone thought it was about the labels, but really it's
about the gig. Who controls the gig. Right now, Irving Azoff
controls the gig.
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