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Near Truths
DOES ANYTHING ELSE MATTER?: With cases multiplying, panic churned up on the news and socials, the market highly volatile, runs on toilet paper at Costco and civilians donning surgical masks, it’s official: COVID-19 is the issue of our time. After a wave of festival and concert postponements, Live Nation and AEG have pressed pause on their whole schedules, all major labels are closing their offices in New York, L.A. and London and will enforce telecommuting, and U.S. municipali- ties follow the rest of the world in entering lockdown mode. For the foreseeable future, though, the biz will be working from home.
The decisions by L.A., Seattle, San Francisco and the entire state of Oregon to ban large gatherings (and a similar proposed ban for all of California, if enacted) will take the concert business out at the knees. Managers, agents and artists are still waiting to learn how widespread the impact of the pandemic will be on the fundamen- tals not only of the concert business but all of their business. Every major and tour and festival is vulnerable to government sanctions. The Trump administration’s chaotic, gaslighting response—and Trump’s own botched speech—have sent pundits scrambling for a term to capture this scandal: Coronagate? MAGAvirus? Online, Trump himself has earned the sobriquet “The Infection.”
With the NBA and NHL already putting their seasons on hold, the NCAA Tournament kiboshed and the pending Major League Baseball season in doubt, we could see crowds north of 1m per day disappearing from venues. Wonderers are wondering what shoes will drop next.
Artists and promoters alike stand to lose substantial sums; bands will have to pay out-of-pocket for production costs, including crews, while promoters lose revenue that would have offset the tens of mil- lions for salaries, rent, building leases, real-estate taxes and more that is part of their fixed overhead.
Meanwhile, it’s said that talks are underway in some circles to find creative ways to deliver the festival experience virtually. Could a mas- sive pay-per-view event provide access to the performances in a man- ner consistent with public-health concerns, while generating revenues instead of refunds? Could this be a new-model Live Aid, raising funds
for response to the crisis while providing a safe (or safer) concert expe- rience? Could a VR component or some other added value persuade fans to pay for a remote viewing experience? Could the participation of a few major tech sponsors make this a viable alternative amid dicey conditions? One thing’s for sure: Whoever takes the initiative to devel- op this option first is the likeliest to win, as it’s highly unlikely consumers will pony up for multiple PPV festival packages.
In any case, we are likely due for at least several months of seri- ous disruption (a situation not helped by a grossly incompetent and cynical federal response).
LEVELING THE PLAYING FIELD: Once upon a time, success in hip- hop culture appeared to be the province of a couple of majors and forward-looking indies. Now the secret sauce appears to have been bottled: Every major label has a boiler room filled with 20 or so kids doing analytics and jostling for real estate on DSPs and socials. All of the majors have taken pages out of the innovators’ playbook and seen mega-success in turning analytics into streaming hits. Look at how suc- cessful Interscope and Atlantic have been in this lane, and how Ron Perry’s Columbia is now moving the needle with new acts.
In addition, Empire has pivoted from distribution to label as the majors compete with them for the next big thing. Meanwhile, Sony’s indie-label structure has been aggressive in dealmaking, its recent pact with Bad Bunny continues the company’s strong foothold in the Latin market (with a commanding 47% marketshare).
No other major has developed a pipe like Steve Barnett’s Caro- line—overseen by Jacqueline Saturn—which gives them dealmaking flexibility as a distributor or quasi-distributor by upcharging for label services. Quality Control, the hottest indie label in the biz, and 10K’s indie success show how the model can be so effective.
Def Jam once led the field with hip-hop. But as the form grew in stature and then exploded with streaming, the label was surpassed by the competition. Everyone who’s anyone has been panning for the same gold in the same waters. Will Jeff Harleston be able to navigate this conundrum and come up with a plan to make Def Jam matter
STEVE COOPER
MICHAEL RAPINO
SIR LUCIAN GRAINGE
ROB STRINGER
18 HITS March 16, 2020