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Live Nation is humming with activity, and behaving more and more like a major label start-up.
I.B. BAD ON WHO’S UP, WHO’S DOWN & WHO’S OVER
At the Quarter Pole, Our In-House Pundit Identifies the Haves and the Have-Nots, the Comers and the Goners
Q1 MARKETSHARE WINNERS: The Disney Music Group is experiencing its fourth straight year of upward movement and is presently commanding a 5% marketshare under the leadership of Bob Cavallo. In short, Disney has the marketshare of a major label but without the infrastructure.  The other big Q1 winner is Mel Lewinter’s Universal Records Group, up two percentage points to a hefty 6.5%, fueled by three of 2008’s biggest sellers in Jack Johnson (#1 on the year at just over 1m), Taylor Swift (#5 with 517k) and Amy Winehouse (#9 with 427k)... At the other end of the marketshare sweepstakes is EMI, which has stumbled to just over 8% in the company’s second full quarter since the acquisition by Terra Firma was finalized. That’s just one reason why morale has become such a major issue—one insider went so far as to call the situation there “a great malaise”—as the restructuring imposed by Guy Hands has many executives feeling untethered. Said execs confide to their associates that they see no concrete movement toward the activation of new model Hands has put in place, while employees around the world are left dangling, still not knowing whether they’ll be among the up to 2,000 Hands months ago announced would be getting pink slips… In marked contrast to the paralysis gripping EMI, Live Nation is humming with activity, and behaving more and more like a major label start-up. In recent days, the concert power has inked Jay-Z (who stills owes one album to IDJ) to a mammoth 360 deal for $150 million, 25% bigger than the last year’s precedent-setting arrangement with Madonna, while finalizing a non-record deal with U2. The next artist to bolt the major-label realm for a sweet deal with Live Nation will likely be Shakira, though she still owes two more records to Sony Music, while Beyonce is rumored to be contemplating an arrangement that does not involve records, a la U2. Meanwhile, on the executive side, Bill Hein, best known as the founder of ’80s indie label Enigma, has left EMI’s Caroline Distribution for Live Nation Recording Group, which will be the driving force behind the company’s foray into the record business. Hein rejoins famed producer Bob Ezrin (Alice Cooper, Kiss, Pink Floyd), his onetime partner in Enigma Digital and KNAC.com, who is now Chairman of LNRG. Observing this flurry of activity, and considering the several hundred million dollars they’ve poured into acquisitions, wonderers are wondering exactly what Michael Rapino and Michael Cohl have up their sleeves. Key questions include whether Live Nation will self-distribute (a possibility suggested by Hein’s arrival), and whether the company will handle its own marketing and promotion, which would mean hiring a staff of some size and expertise. The bigger question is, what is the company’s long-term plan? Will it confine itself to releasing superstar product, or does the strategy include picking up catalog and/or developing artists?… Edgar Bronfman Jr. and Lyor Cohen spent last week running around New York City trumpeting the consecutive #1 debuts of Bad Boy acts Danity Kane and rookies Day 26 (which would drop by 77% in its second week) as a way of justifying the $30 million they paid to go into business with Sean Combs, and to give the impression that Warner Music’s East Coast operation is not dead in the water, as many industry watchers long ago concluded. The two executives also hope that if they make enough noise, no one will notice that the recent follow-up to Gnarls Barkley’s hit album (which sold 1.35m) has gotten off to an extremely disappointing start, making the fat deal WMG renegotiated with the act look like another bad investment—a turn of events virtually identical to what happened with the follow-up of James Blunt’s debut (2.7m) last fall. These expensive missteps are playing out against the backdrop of an even bigger one—namely, WMG’s inability to re-sign Nickelback after spending $75 million for three quarters of Roadrunner last year, an acquisition that was made expressly to bring the mega-selling band in-house. Cohen made the deal without taking into consideration that the band owed Roadrunner just one more album, giving Nickelback the leverage to renegotiate what will be an elephant-bucks new deal… The prevailing mood has never been gloomier, especially at Warner Bros. Burbank, whose staff was aghast at the re-upping of Bronfman and Cohen, while marketshare, which has consistently been north of 5%, has dropped precipitously to 3.5%… Names in the Rumor Mill: Monte Lipman, Roger Ames, Benny Medina and Allen Grubman.
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