LOS ANGELES (CelebrityAccess MediaWire) — After making a splash with a series of big-dollar 360 deals with artists such as Jay-Z and Madonna that include album distribution rights, Live Nation is taking a second look at their plan.
According to a report by the New York Post, Live Nation's CEO Michael Rapino is now considering outsourcing the marketing, promotion and distribution of records on an artist-by-artist basis. Thus. Madonna may end up having her records shipped and shopped by Warner records, the label she defected to Live Nation from last October..Tres awkward.
"Rapino wants to outsource everything," an unidentified source close to the matter told the Post, "He doesn't want to build an infrastructure or carry any overhead."
These latest rumors come on the heels of last week's departure of industry veterans Bob Ezrin, Bob Cahill and Bill Hein from Live Nation's artist division, Artist Nation. The trio had come aboard with Michael Cohl to assist in creating label infrastructure, so after his ouster, their departure now is perhaps unsurprising.
This change in strategy would mean that Live Nation would not be in line for all of the profits from the sales of any albums produced but would instead, pick up a smaller royalty payment that would between 25 – 35 percent, the Post reported. The promoter would then need to cover artist royalties out of their slice, an obligation that with the top shelf performers that Live Nation has recruited, would likely consume a majority of the promoter's percentage.
The Post also suggested that several other options may be under consideration, one of which was bypassing the labels and signing deals with retailers like Wal-Mart, a move that while risking the artist and the label's cachet, would lessen the promotional burden for the promoter. Still, with no album on the horizon for at least 18 months, Live Nation's decision-makers have a generous portion of time to consider their options.
Meanwhile, if anonymous sources reporting to the Post are to be believed, it appears as if Michael Cohl may be hoping to spin off with the Rolling Stones and several other acts to form his own business. If this would be an independent entity, collaborate with Live Nation in some fashion or yet another unconfirmed rumor is a matter of some contention. – CelebrityAccess Staff Writers