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LIVE NATION CHATTER OFF TARGET
-- Pop music critic De Rogatis is stretching when he tries to link this summer’s spate of cancelled concerts and weaker-than-expected ticket sales to a pending financial collapse of Live Nation. From his blog:
During half a dozen chats that I had with concert industry insiders last week at the Event and Arena Marketing Conference, and in numerous other conversations with people in the business of late, the recurring prediction about the recently merged concert-industry behemoth Ticketmaster/Live Nation has been that recent layoffs, rivers of red ink on the profit statements, and the general unwiedlyness of the massive corporation that many of its own employees call the Death Star will inevitably cause it to crash and burn, much as many in the oil industry are predicting that the disaster in the Gulf will lead to the demise of BP.
DeRogatis follows with an excerpt from the Bob Lefsetz email that contained an unsourced claim that CAA artists alone have cancelled 200 shows. The bottom of the blog post has a picture of the Death Star from “Star Wars.” Cute.
In case you didn’t know, Live Nation’s income statement has had red ink for years. Revenues are in the billions, but profit margins are miniscule. In the near term, the company can survive a bad summer: It has refinanced its debt, has plenty of cash and still has the faith of investors (its share price is at about $12, equal to its level when the merger was completed and Liberty Media bid for a larger stake in the company) .
The ability of a merged company to work efficiently is a topic unrelated to this summer’s concert softness. In the next three to five years – if not sooner – Live Nation will have to show it can overcome its many executive departures and has the right leadership to effectively coordinate the operations of its three distinct divisions. But just because the jury is out doesn’t mean a bad summer will wreck the company. (blogs.vocalo.org)
NAPSTER GENERATION MAY NOT BE LOST
-- Young people are connected, more tech savvy and watch less television. But as they age, young consumers spend more time watching television. As Nielsen notes, “much of this is driven by economic necessity and lifestyle choices, and is likely to change as the younger becomes the older generation. Young people’s media habits seem to have more to do with their specific life stage than with their particular generation.” As people age, finish school and settle down, “they finally have the time, opportunity, and financial ability to control (the TV).”
Is there a parallel to how young people buy and listen to music? It would not be surprising. As consumers pass their teen years, they have more income and less free time than they did in the past. What cash-poor, time-rich teen isn’t going to seek out free music? Today, a 27-year-old is more likely to buy music than a 16-year-old. But 11 years ago, a 16-year-old kid wasn’t expected to buy much of anything – today’s 27-year-old was 16 when Napster went live and supposedly turned a generation away from buying music. Even someone who was a 21-year-old college senior when Napster arrived in 1999 is over 30 now, more likely than a current college student to be an iTunes customer and less likely to use P2P.
So, the Napster generation may not have been totally lost as music consumers. Some may simply grow out of file-sharing as they age. Labels and music services need to keep this in mind. Just because some young consumers don’t buy music doesn’t mean they’ll never buy music or pay for a music service. (NielsenWire)
QUE INKS WITH EMI
-- Que Records has inked an exclusive distribution deal with EMI Label Services. Hip hop artist Huey will be the first to release an album under the partnership. (Press release)
CAA TO SELL STAKE TO EQUITY FIRM?
-- Private equity firm Kohlberg Kravis & Roberts is in early talks to buy a $250 million, minority stake in Creative Artists Agency. Speaking at the Summit on Luxury Goods in Los Angeles on Tuesday, CAA managing partner Bryan Lourd confirmed “there have been conversation” with outside investors but did not mention KKR by name. (Wall Street Journal, The Hollywood Reporter)
-- As the graph shows, family and friends are far more trusted than influential bloggers and discussion forums. (NielsenWire)
-- Live Nation’s Fillmore venue in Silver Springs, Maryland has one more hurdle before construction begins. (Gazette.net)
-- Chris Anderson and Malcolm Gladwell debate on the topic of free. (NielsenWire)
-- How Terra Firma resembles Forstmann Little & Co. (Wall Street Journal)
-- Scottish singer-songwriter King Creosote is “retiring from anything online, and digital music entirely.” (Evening Times)
-- Thom Yorke is wrong to write off the music industry. (The Guardian)