Live Nation, Korn Form Unprecedented Joint Venture & Bob Lefsetz On The Korn Deal

(CelebrityAccess MediaWire) —
Live Nation and Korn, in a first of its kind for the music industry, are teaming up in a unique, exclusive joint venture, that expands on Korn's unprecedented partnership it created with EMI Music last September.

Under the agreements, Live Nation, EMI and Korn will partner in and share in the results of the band's overall career — including their recording, publishing, touring, merchandising, sponsorship, and other activities. All parties are incentivized financially and creatively to work with Korn's management company, The Firm, to take a long-term approach to building the Korn brand. Each will use its expertise and resources in bolstering Korn's worldwide presence and value.

"This is about shifting power back to artists by finding strategic partners who are the best in their respective businesses and incentivizing them to work in unison to attain common goals consistent with the band's goals," said Jeff Kwatinetz, CEO of the The Firm. "We are thrilled to be in business with Live Nation and especially with its forward-thinking new CEO Michael Rapino. Not only is Live Nation a superb concert promoter, it is a stellar marketing, promotion and production company. This deal allows them to focus not just on selling concert tickets, but on fully investing in the Korn brand. We believe this venture will pave a new way of doing business for musical artists in the future."

"Creating a fan-focused industry will require new approaches and unconventional deals," said Rapino. "In this new era, we're bringing our branding, concert industry expertise and resources and collaborating with the best partners for one clear objective — to foster long-term artist development. Korn's years of success in touring make them a natural partner for this kind of initiative."

Korn's Jonathan Davis opined: "Our partnership with EMI really opened our eyes that there are other ways to succeed in the music business that don't involve always fighting with our record company. They want what we want and we couldn't be happier with Virgin, EMI and David Munns. We expect that adding Live Nation to our team will also have a real impact on our careers."

"EMI was first to recognize the logic and potential of going beyond the traditional record label/artist relationship and creating partnerships that allowed us to be part of an artists' overall career," added David Munns, chairman and CEO, EMI Music North America. "We are delighted that Live Nation is also breaking the mold and joining with us. Live Nation's interests will be completely aligned with ours, and because Korn is one of the most electrifying live acts performing today, having Live Nation's concert expertise in the mix makes complete sense."

Live Nation's interest in the joint venture does not dilute EMI's investment.

Jerry Mickelson, owner of Chicago-based Jam Productions, who recently settled a legal battle with former Live Nation parent Clear Channel, told the New York Times that, "Any promoter already has plenty of incentive to work hard to sell tickets because of the guarantee." Live Nation's investment, he added, "is just a way for the promoter to attempt to monopolize the live entertainment industry and cut out competitors."

Rapino strongly disputed Mickelson's claim in the paper, saying that the corporation's investment was aimed at exploring new business models, not squeezing out rivals.

Kwatinetz explained the situation to the Times.

"We've taken the biggest promoter and one of the biggest record labels and incentivized them to think long term and to think career about our band," he said. "We believe long-term career planning is what's been lacking in the business. We believe that's part of the solution to the woes the music business is experiencing." — Jane Cohen and Bob Grossweiner


POINT/COUNTERPOINT:


The Korn Deal
Bob Lefsetz Responds

Enough already!

This isn't about a new business model, this is about ADVANCES!

That's what Jeff Kwatinetz, fading music manager, specializes in,
GETTING THE CASH!

Yes, I've got a has-been band with a brand name. How can I tantalize
entertainment companies into laying out a ton of cash for them? By
creating a new business deal.

They made a record with the Matrix, so David Munns and the
backward-looking people at EMI would pick up the record. Also, by
giving up road and merchandise income it would give EMI a wedge to use
against OTHER acts, to get them to cough up bread.

Then, to make sure they don't lose the band to AEG or some other
promoter (yeah, like Kwatinetz didn't play hardball and threaten)
Michael Rapino coughs up dough for an exclusive, tying up the band for a
long term, which HE couldn't do previously, also helping establish a
paradigm to use as a blunt instrument on other acts' heads.

God, if you want revolution, let's go back to the Police. Let's take a
LOWER or NO advance and a larger share of the upside.

With this one band, Kwatinetz has set back the plight of the artist
community YEARS!

God, you already can't squeak a royalty out of a major label. Rather
than fight this battle, Kwatinetz has INSTITUTIONALIZED the advance
system.

Two desperate companies. EMI and LiveNation. In the crosshairs of a
mesmerizing dealmaker. Come up with a plan that should receive NO
press, unless it's in the comics.

God, ever been at a show settlement?

Tell me this works. With these three poker players holding their cards
and respective pots of money. Yeah, that's what the business is famous
for, accurate accounting.

Makes me puke.

Industry Response:

Dan Kennedy:

Here's some free marketing advice to the music business from a guy who's shifted a few hundred million units of several brands of flavored vodka, bottled water, cough drops, and just about anything else Madison Avenue calls me in to work on as a hired gun:

Lose the fucking 'R'. You're supposed to be developing bands, not brands.

To review, from Jeff Leeds' New York Times piece:

"How do we maximize the Korn brand?"
" advances the band's strategy of turning itself into an investment vehicle."
"Fans can expect to see more elaborate marketing tie-ins that involve multiple products…"
"I just want a piece of that income."

Jesus, no wonder the fans have run for the hills.

_______________________________________________

Jeff Balke:

"To review, from Jeff Leeds' New York Times piece:
'How do we maximize the Korn brand?'"

I spit out my soda when I read this at lunch today in the Times
article. What brand is that exactly? Del Monte?

_______________________________________________

Tom Golseth:

Brand. Ha. Yeah, perhaps a "Korn Flakes" derivitive.

_______________________________________________

David Basskin:

Korn without the "R" is just a Kon.

Contact Bob Lefsetz | View Lefsetz Letter Archives

NOTE: The views expressed in this editorial do not necessarily reflect the opinion of CelebrityAccess, Encore or its employees.

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