Because the music industry is an even worse place to invest your money than the newspaper industry at the moment, everyone is looking for the next big thing. The closest they've come is "360 deals," where artists get a huge check in return for a big cut of all their different revenue streams. First, Madonna signed a contract like this with Live Nation for $120 million. Then Jay-Z signed a contract with Live Nation for $150 million. Live Nation wants to sign 15 more artists to contracts like this. Then everybody else in music can quietly retire. Hope you like the Jonas Brothers a lot!
The WSJ reports that there's an internal battle at Live Nation right now over whether to press ahead with more of these monster deals, or slow down. If they did 15 more at $100 million per (a lowball estimate), that's $1.5 billion. If the company lays out that much scratch, you better believe they plan to see their profits. Ultimately it could mean that the 99.9% of less-than-mega artists that get shut out of deals like this have even worse financial career prospects than they have now, if such a thing is possible.
Homogenization forever! The entire music industry is now riding on: Madonna and Jay-Z, along with the Jonas Brothers, U2, the Rolling Stones, and maybe Shakira—Live Nation's roster. Not everyone is a fan of the company's strategy, though. Their stock is down 44% since they started signing these deals. Also, "profit margins in concert promotion are perilously thin, and a bad tour could undercut the overall value of a package deal."
So if you don't want the Jonas Brothers to be considered cutting edge music by the next generation, please boycott the next Madonna tour. This has been a public service message.