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01.02.13 MusicWeek 13
commercially for 10 years. Hopefully it’s hit the bottom of that now and is on the way back up. I left that - a business that was a lot to do with cost-cutting - for a business that isn’t about cost- cutting but is still about growth and being a little bit more progressive in that direction. That’s obviously the major difference. The live industry is… how can I put this? A loose group of federal republics [laughs]. It’s big business and it’s full of very entrepreneurial characters. Decision-making is quicker and company structure is flatter - record labels are still very hierarchical over a lot of levels. Decision-making at a record label is definitely slower. In the live business, you’ll get a very quick yes or no to an idea.
Do you think the live music business has been smarter in some respects than the record business in recent years? I don’t know about that - both the record business and the live businesses are full of very smart people. There are different ways of making deals; the live business is a deal-making-orientated business - the record business has that but perhaps it’s more creative. They’re both risk takers to different degrees, but each requires a slightly different skillset. The record companies have been faced with a bigger strategic problem than live has faced - digital distribution. That hasn’t affected the live business as much, although it’s definitely doing so in ticketing now. There are a lot of parallels you can draw between the ticketing problems we in live face and the piracy problem the record industry has faced.
I didn’t mean to draw battle lines there… No, it was a perfectly reasonable question. Lots of people say: “If the record companies had all licensed
ABOVE
The Boss, bumped: Reid is sceptical that AEG will be able to overcome the sort of pressure from local residents that led to Bruce Springsteen having the plug pulled at Hard Rock Calling last summer
“Decision-making at a record label is definitely slower and more hierarchical than it is at a live company - but both industries are full of very smart people” JOHN REID, LIVE NATION
Napster it would all have been fine!” Anyone with any sense knows that’s bollocks.
Hasn’t there been a historical issue around labels and the live business not working well enough to market an act together? Has that relationship improved of late? Yes, and it definitely has improved. We all pay due reference to each other now. I wouldn’t say the recorded music business was arrogant towards the live side, but there was an element of, “We’re doing this and you follow.” That was just the business model back then. The tour stood behind the record, now it’s a bit more the other way round. People are starting to get their head around the fact we’re all in the same business. But here’s the bottom line: without recorded music underpinning it, the music value chain has no value at the top end. Now, it’s true to say recorded music has become a smaller part of the value chain and live has become bigger - but without recorded music, you don’t have headliners in five years’ time. We help a bit, certainly more these days, as Live Nation in terms of investing in [new artists] than we used to, and we will do a lot more. But that wasn’t historically the case.
That’s a quandary for the whole industry. The newest bands who could headline festivals now are
getting old fast… Kasabian, Muse, Arctic Monkeys, maybe Mumfords or Biffy... Yes. We have a very strong set of festivals lined up this summer, but you have to constantly think about where the next Bruce Springsteen - who’s still one of the biggest headliners in the world, by the way - or Arctic Monkeys or Coldplay are coming from. Here’s what I think has happened: record company margins have been eroded for 10 years, so record companies are investing less into new talent. We all know this. They might say they’re not, but the reality is their margins are getting crushed, so by definition labels are taking fewer shots per year, and probably spending less on each one. That’s not a shock - that’s the life the industry’s been leading. Therefore, we all need to be doing more. Where that manifests itself for live is that these rock bands are getting investment in terms of tour support [from promoters] to build an audience without selling any records. My view of Live Nation is, why don’t we help? We can do that in three ways for artists - who are now actually starting to knock our door down: (i) we can lend you a few thousand without taking 20% of your rights forever. I’m happy to lend them the money, but there’s only so many of those punts we can take or else we’ll be bankrupt; (ii) we can offer to help with infrastructure around the world, marketing and selling shows in different territories - especially doing a bit more for the support acts under the big guys; (iii) we’re talking to the agency and management community about this one now, and that is we can pool all our festival real estate; brand- sponsored stages that we can offer to agents or managers. We could possibly do a better job of co-ordinating the six, 10 or 20 festivals they want to
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