Jun 08, 2009
Posted by: Hitsville

Sonic Youth, whining

Via Twentyfourbit.com and the Daily Swarm—a rant in the Guardian from Kim Gordon against Radiohead’s In Rainbows pay-what-you-want model:

“[Radiohead] did a marketing ploy by themselves and then got someone else to put it out,” Gordon told The Guardian’s David Peschek. “It seemed really community-oriented, but it wasn’t catered towards their musician brothers and sisters, who don’t sell as many records as them. It makes everyone else look bad for not offering their music for whatever. It was a good marketing ploy and I wish I’d thought of it! But we’re not in that position either. We might not have been able to put out a record for another couple of years if we’d done it ourselves: it’s a lot of work. And it takes away from the actual making music.”

Gordon, like other artists, obviously hasn’t really thought about what it was exactly that Radiohead did. Community had nothing to do with it.

The idea was that, since the music was going to be available online anyway, why not try to get in front of the issue and make it as easy to pay for as get for free?

Did it work for Radiohead? It looks like it. In the end, the band’s publisher claimed three million “sales” for the album, which I guess is reasonable when you take into account foreign tallies, its own offering, and iTunes, which the group finally broke down and joined.

Since Radiohead released the thing on its own, taking far more from each transaction than the $2 or $3 it might have gotten from EMI, the financial take should have been correspondingly breathtaking, notwithstanding the fact that some fans paid less than they would have otherwise. (The group is also said to have unloaded 100,000 $80 special editions of In Rainbow on fans, representing another chunk of change.)

What does that total? $25 million?

Anyway, back to SY. Leaving aide Gordon’s double-reverse ironic/not-ironic patois, which I bold-faced above, Radiohead wasn’t devaluing its music. It was just dealing with reality, which, unfortunately or unfortunately, has devalued music period.

The question is whether the same opportunities are available to Sonic Youth. The answer is, mutantis mutandis, yes and no. Sure they can do it, but no, they’re not going to make as much money out of it.

Why? Because they’re Sonic Youth.

The real irony here is that the group is one of those bands who probably did better than they should have with its major-label deal, in this case with Geffen; it’s hard to imagine they ever made money for the label. The band seems to have left it amicably—i.e., without any money owing, though its hard to see how it could have recouped its advances from the heady Nevermind era. On the other hand, there’s been this or that re-release of things like Goo, which would presumably bring the band a little bit of money.

Then as now, one of Sonic Youth’s selling points has paradoxically always been its uncommerciality.

Today, on Matador, they would probably benefit from higher royalties, but get much smaller advances and of course benefit from less marketing, the corresponding fewer sales and, inevitably, much less interest from fans. That why it’s gotten on the “We’re gonna play one of our old albums in its entirety” bandwagon—and why it made that ludicrous deal with Starbucks.

Here’s Lee Renaldo, incidentally, explaining that little deal to the Guardian, which deserves credit for bringing it up:

“It didn’t take a lot of blood and sweat from us. We thought we’d try it and see what happens. There’s a certain side to this group that likes perversity, and that’s a pretty perverse concept. At that time, Starbucks were selling records when no one else was. The majors were throwing up their hands. The irony is, for all the spewing it caused on the blogs, it is our most rare record. I have never seen a copy in a store, and I’ve never met anyone who’s seen a copy in a store.”

Funny how Renaldo pats himself on the back for the creepy association, trying to spin it as being radical. (“I threw a drink in this woman’s face. I wasn’t being an asshole; I was being perverse.”) He’s just rationalizing doing a promo deal with a coffee shop trying to look hip. The fact that it wasn’t successful after the band pocketed its fee underscores again the fact that Sonic Youth has done pretty well in its career from the kindness of strangers.

The idea of the old-fashioned major keeping major artistes on board even when they didn’t make any money was always overstated; in the end, its difficult to separate out them from those to whom the labels just paid too much for, given their sales records.

But in the world we live in today cozy homes for the likes of Sonic Youth will be very rare; all it really has, in the end, is that cool factor, which will decline with each Starbucks deal. Gordon’s snipe at Radiohead, which after all is just doing its best to make its own place in that new world, is perhaps a sign of the pressure getting to them.

Apr 17, 2009
Posted by: Hitsville

The money train

Val Kilmer’s been in about three big movies (The Doors, Willow, and Batman Forever) and failed in an attempt at his own superhero franchise (The Saint).

What do you think his net worth is?

The Journal today ($) has a squib about Kilmer’s sticking his New Mexico ranch up for sale. (Recap from the NM Independent here.)

Asking price? $30 million.

Kilmer seems to call New Mexico home; he’s even been considering a run for the governorship. So maybe he’s sunk all of his earnings over the past twenty years into it. Still, based on his oeuvre, you wouldn’t think he’d have assets like that.

Like Lenny Kravitz, he’s a reminder that even second-tier stars are making enormous amounts of money.

Jul 21, 2008
Posted by: Hitsville

Those poor starving artists (One in an ongoing series)

Factoids from the latest Billboard Boxscore:

  • That weird Kenny Chesney-Keith Urban-Sammy Hagar tour grossed $3.2 million from a single show at LP Field in Nashville. It’s not a small place—50,000 capacity—but the total gross shows that ticket prices for country shows (traditionally reasonable) are heading into the stratosphere. Seventy bucks a ticket for a stadium show for a hat act!
  • Tom Petty made $5.5 million from five shows in a twelve-day period, and that doesn’t include two sold-out NYC-area dates, which would have increased the total to $8 million or so. The tour comprises some forty shows in all; you do the math.
  • Neil Diamond is raking in $1.2 million a show.
  • The decline of the dollar is great for stars touring overseas; Dolly Parton made $1.5 million from two shows in Ireland. And Diamond made almost a million from a single show in a smallish 9000-seat hall in Munich.
  • A million dollars a night is just about the norm now for all sorts of acts: R.E.M., Jack Johnson, Barry Manilow, Dave Matthews, Pearl Jam and Iron Maiden (!) among them.

This is part of the reason Live Nation, which was Clear Channel’s concert production arm before splitting off, is making those so-called “360 deals” with artists. This is where the money is!

The economics of a big stadium concert are complicated, but remember that the gross is just the beginning, and the vast part of it goes to the artist*.

Ticketmaster fees (and remember that Live Nation is making moves to supplant that company’s hegemony) can total $5 to $10 a ticket.

Parking is another nice money stream, though some of it goes to the venue.

The promoter or venue typically gets a piece of the merchandise, as well; that’s part of why t-shirts cost $40 in an arena. The money stream here varies wildly depending on a show, but might be $10 to $20 per concertgoer.

Which all means that ancillary spending at a typical concert begins, conservatively, at about 25 percent of the gross and goes up from there—totalling hundreds of thousands of dollars, or perhaps even a million, at certain shows.

So remember that the problems in the music business are affecting the labels, not touring acts and concert promoters.

Here’s the top ten tours from the first half of the year, from Billboard:

  1. Bon Jovi, $112.4 million.
    Spice Girls, $70 million
    Police, c. $60 million. (Billboard didn’t give the six-month figure, but said that the band will conclude the 2007-2008 tour in August with grosses of about $360 million, the third-highest-grossing tour of all time.)
    Hannah Montana,  $45.3 million
    Trans-Siberian Orchestra, $44.8 million
    Bruce Springsteen, $42 million
    Van Halen, $40.2 million
    Michael Buble, $36.6 million
    Take That, $32.5 million
    Jay-Z/Mary J. Blige, $30.3 million

Again, with the exception of the Police, there are figures from just a six-month period from November to May.

* I’m always surprised by people who say, “Well, the artist doesn’t get all of that!” The artist gets 90 or 95 percent of it. They can do the math: 17,000 seats times an average ticket price of 80 dollars is $1.36 million. Why should they show up for less?

Jun 22, 2008
Posted by: Hitsville

Catching up with Michael Jackson’s finances

From the Wall Street Journal and elsewhere, noise that the company holding one of the smaller financial reins on Michael Jackson is trying to persuade him to create some sort of long-running performance or show, à la the Las Vegas residencies of Celine Dion and others.

As usual with Jackson, the story raises more questions than it answers. From the Journal:

Colony Capital, which owns the Las Vegas Hilton and is a major shareholder in closely held Station Casinos, is in discussions with Mr. Jackson to get him back onstage and in the spotlight via a long-term stand in Las Vegas. It also wants the singer to sell his Neverland Ranch, the home of his private amusement park and menagerie and site of his controversial sleepovers with young children.

Colony and its executives aren’t working with Mr. Jackson as managers or personal advisers. But they may nonetheless have a better chance of succeeding with Mr. Jackson than the many figures who have served in those capacities, thanks to Colony’s major leverage with the pop star. The private-equity group in May bought from hedge fund Fortress Investment Group a $23 million loan backed by Neverland, in Los Olivos, Calif. Mr. Jackson, 49 years old, was in default on the loan and Fortress had initiated foreclosure proceedings. After buying the loan, Colony negotiated some short-term breathing room for Mr. Jackson. Under discussion is a scenario in which he would be allowed to put off making payments for a while, in exchange for more money further down the road.

You’ll recall Jackson was on the verge of having the ranch sold on the courthouse steps in March. This embarrassing scene was staved off, apparently by Colony. Besides the disgrace of his little pleasure palace’s being sold to the highest bidder, Jackson also, by some accounts, would have been facing a steep tax bill, as much as $5 million, had it been sold off at a good price. It was also reported at the time that Havenhurst, the Jackson family manse in Encino, had been mortgaged and that Jackson had regularly been faced with default on that loan, said to be $4 million.

Those numbers, however, may just be a sideshow next to the main Jackson money issue. The big debt is said to amount to several hundred millions dollars and is supposedly backed by his music publishing holdings, specifically his half interest in Sony/ATV. The NYT in 2006 reported that Sony, which owns the other half, had agree to advance him $300 million, guaranteed by half of his interest in Sony/ATV.

Nothing further has been heard about this deal, but if in the end it went through successfully, in crude terms it seems that Jackson, rather than living off the income from the holdings, has in effect paid for his crazily profligate lifestyle by selling off the holding itself. (Note that this is all as an alternative to actually working and earning more money as well.) If it did go through and the numbers in the stories were correct, Jackson now holds the equivalent of 25 percent of a company he used to own all of, and which a few years ago was said to be worth $1 billion.

Even that would keep most folks in the necessities, but Jackson’s idea of them is different from that of most people. At the same time, he may have other, unknown debt obligations—there were mentions of multi-million-dollar tax obligations during his trial, for example—that may deplete even that income.

All of which may or may not explain why a guy who settled hundreds of millions of dollars in debts recently is still having trouble dealing with the demands of a couple of smaller ones amounting to just a few percentage points more.

Back to Colony and Jackson and Las Vegas. The question here is why Jackson needs Colony to set him up with a performance situation. He’s a big star, and has performed live in the past and knows how to set up a tour. The Journal story tiptoes around this:

Since Mr. Jackson’s 2005 acquittal on child-molestation charges, various entertainment-industry executives have pursued some kind of splashy comeback for him. For the most part, the singer hasn’t played along. In February he backed out of a planned performance during the Grammy Awards telecast. Around the same time, he also declined a proposal to perform for 10 nights at a London arena. People who have spoken to Mr. Jackson say he has simply not felt up to the rigors of performing after his lengthy legal ordeal.

That’s bullshit, because Jackson stopped making public appearances, with rare exceptions, long ago. During that time, the money available to him from touring has grown extraordinarily. Jackson knows that artists nowhere near his stature have tours grossing in the nine figures.

I think that if Jackson were capable of touring he would have already. As Hitsville has written before:

The touring issue brings up perhaps the saddest factor of all in the Michael Jackson story. As Springsteen, U2, the Eagles and the Stones know, a big-ticket A-level star tour is a tonic for the troops. Jackson could launch a $100M- —or $200M- —grossing tour whenever he wanted to. He could also take home $10M or $15M with just a two week run at MSG or Meadowlands. He’s also had comparable offers from promoters in Las Vegas and London.

Jackson’s history with tours is checkered, of course, but this seems an obvious way to stave off financial problems. (And he could make even more if he kept his ambitions reined in and did a disciplined greatest-hits show with a minimum of spectacle.) The troubling question about Jackson is this: Is a tour or a series of performances the trump card, deep down inside, he knows he can put on the table when the need arises? Or is his mental or physical condition such at this point that it’s out of the question? If it’s the latter, Michael Jackson’s last years may turn out to be truly unpretty.

p.s. : I was just looking up the derivation of the name “Sony/ATV” on Wikipedia and came upon this little bit of internet ineffability on that page, under the heading “Notes”:

As of June 2008 With Michael holding 50% of the Beatles catalog and Sony/ATV investing in new music publishing’s Michael makes a yearly earnings of $350 million dollars a year. Michael owns 50% of Sony/ATV catalog, the only reason Michael is not paying off the loans is because the Sony/ATV company is reinvesting in new music and buying small publishing companys up. like last year Sony/AVT brought the ‘Famous Music’ publishing company for $370 million. This all add to the value and income of the comany. Remember Sony/ATV was value at over $900 million in 1999 (9 years ago), before they brought a Country catolog for $140 million and before they brought the ‘Famous Music’ publishing company for $370 million and before tens of thousands and news track were added to the comany. now Sony/ATV has an estimated value of between $6 to $7 Billion and Michael still owns 50% and the media keep writing how broke he is. As of 2008 Sony/ATV is valued at 6 billion dollars more then any other music Publishing.

Michael will continue to hold on to his 50% share of the company and the company will continue to reinvested and buy other publishing companys up. Michael will continue to extend his loans and give it less than 5 years, Michael will probley have loans of over $500 million and the media will continue to make out he’s close to bankruptcy, but the company then will be worth between $7 to $9 Billion.

Jun 17, 2008
Posted by: Hitsville

Getting the Stones story even wronger

Yesterday (“Getting the Stones story wrong”) we saw transcontinental confusion, from London (The Observer) to San Fransisco (Wired News) about rumors that had the Rolling Stones working on a 360 deal with Live Nation.

Today, Reuters has a story saying the Stones are denying the reports. Well, sort of:

“We are not in talks with Live Nation in connection with any record deal,” London-based Rolling Stones spokesman Bernard Doherty said on Monday, reading from a brief statement.

If the denial is to be believed, the Observer was talking through its hat. The story included this assertion: “It is understood that Universal will have a role, with Live Nation licensing new versions of the [Stones’] catalogue to the American label, which would sell them online and as CDs.”

Whether the comment was designed to smooth ruffled feathers at EMI or just to keep attention focused on the band isn’t clear. A touring deal between the Stones and Live Nation will at once be more and less significant than Madonna’s or Jay-Z’s. It certainly won’t be a long-term set-up; Mick Jagger is 65, fifteen years older than Madonna, and sooner or later exhaustion or, sad to say, death is going to catch up with the band.

On the other hand, the Stones’ tour grosses are in a class by themselves; if Live Nation signed the band tomorrow just for touring (not even merchandise) and gave the group an advance equal to the gross of its last tour, that figure ($550 million) would be bigger than that of the Madonna and Jay-Z deals combined.

Meanwhile, Wired corrects itself for a mistake it didn’t make. Originally it repeated the Observer, which said the Stones had been with EMI for 31 years; Wired now says the band had only been with EMI since the conglomerate bought Virgin. But this is true only for U.S. releases; the group did have EMI distribute Rolling Stones Records for the rest of the world since the late 1970s. (My source is Old Gods Almost Dead.)

Wired doesn’t correct its figure for the group’s last tour grosses (“nearly three quarters of a billion dollars”) and displays its unfamiliarity with the concert-ticketing industry as well:

When the company’s contract with TicketMaster runs out next year, it will hopefully bring more competition to the online ticketing market, though we’re not holding our breath.

The company isn’t going to compete with Ticketmaster; it’s going to take the exorbitant and unnecessary fees the company collected for itself!