[Dixielandjazz] Big Business & Music

[Steve Barbone]

Here is the other side of the idea that Big Business is destroying music by
forcing garbage music down the public's throat. Now the music industry is
"forcing" all sorts of products down our throats. Which apparently we
willingly buy. Heck even the no talent Kevin Federline appeared in a
Nationwide Insurance Commercial this year, Motley Crue endorses a carbonated
drink and Coty Fragrances is looking for music artist endorsements. Check
out the rest of the story below.

Artist exploitation? Well, maybe not. Who is is forcing/exploiting whom?
Below is what's happening TODAY in the real world "business" of music.

Cheers,
Steve Barbone 


If It¹s Retail, Is It Still Rock?

NY TIMES - By JANET MORRISSEY - October 28, 2007

AS torrents of money streamed into his wallet from multiplatinum albums in
the 1980s and 1990s, Duff McKagan, then the bass player for the hard rock
band Guns N¹ Roses, had little interest in tracking his cash. Instead, he
relied on intimidation and his group¹s reputation as the ³most dangerous
band in the world² to prevent managers from ripping him off.

³We knew nothing about money, and so we had this sort of gang mentality
toward anybody who worked for us,² he recalls. ³It sounds funny now, but
that¹s all we had to rely on.²

But he didn¹t know the difference between a stock and a bond and lost money
in real estate. So at the height of his career, he gave up partying and went
back to school in 2000 to study business. Today, Mr. McKagan, 43, tightly
monitors the finances of his current band, Velvet Revolver.

Like other rockers easing into middle age or seniorhood, Mr. McKagan is also
experimenting with new partnerships in response to a music business in flux.
Amid plunging record sales and Internet file sharing, rockers are eagerly
plastering their names everywhere.

Their ³brands² are now found in television commercials, tour sponsorships,
and merchandise as diverse as cars, private-label wines and celebrity
cruises. The rock band Kiss has been among the most prolific merchandisers,
selling products ranging from condoms to the ³Kiss Kasket,² a
limited-edition coffin. The band¹s latest offerings include musical
toothbrushes, pool cues, window blinds and baby booties.

³It¹s a different ballgame now,² compared with rock¹s baby boomer heyday,
says Joseph Bongiovi, who handles merchandise and partnerships for the rock
group Bon Jovi. 

Others concur. ³Everyone is in agreement that taking advantage of the appeal
music has as a marketing vehicle is in their interest,² says Michael
Megalli, a partner at Group 1066, a strategic branding firm. Paul McCartney,
in his solo career, made a deal with iTunes and Starbucks to distribute his
music. That agreement was ³the most radical transformation when you think
about how the Beatles were so guarded about their catalog and the idea of
using it commercially,² Mr. Megalli says.

Even the rock icon Mick Jagger, whose generation embraced the
anti-big-business motto ³never trust anyone over 30² in the 1960s, toots the
corporate horn. The Rolling Stones have teamed up with the likes of Sprint
and Budweiser for concert tours, and the band hawks everything from bras and
panties to leather bomber jackets.

To be sure, some rockers, like Bruce Springsteen, still refuse to form
corporate partnerships. ³Bruce made a decision a long time ago that he
didn¹t want to rent his name or stage out,² says Jon Landau, Mr.
Springsteen¹s manager. ³It just wasn¹t something that was in his comfort
zone.²

But others who don¹t share that point of view say partnerships and branding
have to be part of their musical portfolios, especially for little-known
bands.

³The barriers are changing and we as artists are making less and less money,
and we have to get creative,² notes Mr. McKagan, whose new band has licensed
its music to a Victoria¹s Secret commercial and movie soundtracks, formed
partnerships with entities like the music video simulation game Guitar Hero,
and appeared in ads for the clothing designer John Varvatos. ³Fifteen years
ago, it would have been totally not cool. You would have been selling out.²

BAND branding appears to know no bounds. The Black Crowes market rolling
papers, Bon Jovi offers $1,000 signed canvas art prints and Mötley Crüe
peddled Mötley Brüe, a carbonated drink. Celebration Cellars, a California
winemaker, teamed up with several rockers, including Bon Jovi, Kiss, Madonna
and the Rolling Stones, to issue special-edition wines that feature band
logos and sell for $100 or more a bottle.

All of this has been set in motion by a well-known reality: record sales
³fell off a cliff,² says Jonathan Daniel, a former musician and now a
partner at Crush, a management company that represents such bands as Panic!
at The Disco and Fall Out Boy. Shipments of CDs were $9.16 billion in 2006,
down 31 percent from their peak of $13.21 billion in 2000, according to the
Recording Industry Association of America.

The branding wave makes some rockers wince. Nikki Sixx of Mötley Crüe
recalls feeling let down as a teenager when he saw Kiss on a lunchbox. ³I
was devastated because all of a sudden they were like Shaun Cassidy and the
Partridge Family,² he says. Even though it might be hard to distinguish
branded lunchboxes from Mötley Brüe, Nikki Sixx rolls his eyes when he sees
some of the products that musicians are endorsing. He says he drew the line
at baby bottles, even after his advisers pointed out that his fans were
becoming parents. 

³I think you can go too far,² he says.

Jack Rovner, Bon Jovi¹s manager, says commercial partners should complement
musicians¹ vibe, lifestyle and message. Mr. McKagan agrees, saying that
there are plenty of companies he would not want as partners. He says he
often consults with his two young daughters before signing up, to see if an
item is ³cool.² 

The right commercials, television shows and movie soundtracks can make or
break a band. 

In 1999, the ³Brand New Day² album from Sting was collecting dust until he
appeared in a Jaguar commercial with his song ³Desert Rose² playing in the
background. The move raised eyebrows, considering that Sting was an avid
environmentalist who was endorsing a gas-guzzling vehicle, but the
commercial helped to sell records. The album won several Grammys in 2000 and
sold more than three million copies by January 2001.

Kevin Federline, often painted in the press negatively in the breakup of his
marriage to Britney Spears, helped to soften his image when he appeared in a
Nationwide insurance commercial during this year¹s Super Bowl. The ad poked
fun at Mr. Federline, opening with him donning a fur coat and bling as a
hotshot rapper before his daydream is interrupted by a boss at a fast-food
restaurant barking at him to get fries.

An unusual recent pairing involved the appearance of Bob Dylan as a shadowy
figure in a Victoria¹s Secret lingerie commercial as a supermodel in angel
wings paraded around in stiletto heels with Mr. Dylan¹s song ³Love Sick²
playing in the background.

³That¹s one of the weirdest of them all,² says Jim Guerinot, president of
Rebel Waltz, a management company that represents Nine Inch Nails, among
others.

Sometimes, though, fans push back.

³When Wilco did the Volkswagen commercial, their fans shredded them² on
Internet message boards, says Mr. Daniel at Crush, the management company.
The band tried to do damage control by issuing a statement on its Web site,
explaining it was becoming tough to get commercial radio airplay and the ad
offered a way to promote their music. ³We feel O.K. about VWs,² Wilco¹s band
members said in a statement. ³Several of us even drive them.²

In addition to Mr. Springsteen, other performers and bands, including Tool
and Nine Inch Nails, refuse to form corporate partnerships. Mr. Guerinot
says the Nine Inch Nails frontman Trent Reznor is a ³purist² who puts the
music and art first. Mr. Reznor even refuses to license his music for
cellphone ringtones because he thinks that the 10-second snippets compromise
the music¹s integrity.

With branding lucre rolling in for those who do choose to indulge, some
record labels are pressuring artists to share their promotional and
merchandising income as a condition of getting record contracts ‹ so-called
360 deals. Monte Lipman, president of Universal Republic Records, says
labels, just like artists, are struggling with thinner profit margins,
declining record sales and smaller rosters, making it tougher for them to
recoup the costs of funding new talent.

³I don¹t think there¹s a deal being made today where the 360 model doesn¹t
come up,² Mr. Lipman says.

Some artists, aware of dwindling revenue from album sales, are quitting the
big labels and working directly with experts in merchandise, touring and
digital downloading.

Madonna recently ended a 25-year relationship with the Warner Music Group to
sign a $120 million deal with Live Nation. Under the agreement, Live Nation
will handle all of her touring, merchandising, an official Web site, DVDs,
sponsorships and television and film projects. Her deal also gives her a 1.6
percent ownership stake in Live Nation, which positions her to share in
partnerships that Live Nation strikes with other artists.

³The paradigm in the music business has shifted and as an artist and a
businesswoman, I have to move with that shift,² Madonna said in a statement
at the time of the deal. ³Live Nation has offered me a true partnership and
after 25 years in the business, I feel I deserve that.²

Madonna, known as the Material Girl in one of her earlier musical
incarnations, said the partnership was necessary today. ³I¹ve never wanted
to think in a limited way, and with this new partnership, the possibilities
are endless,² she said. ³Who knows how my albums will be distributed in the
future?² 

For his part, Mr. McKagan still has a business manager and financial
planner, but he personally reviews music and merchandise contracts and is in
daily contact with his advisers. While most musicians have not gone to
business school as Mr. McKagan did, many now take a more hands-on approach
to their finances, particularly artists who came of age in the Internet era.

³New artists coming up really understand business. They¹re inquisitive, they
read things, and they ask questions,² says David H. Chidekel, a principal at
the law firm Fish & Richardson in New York. ³Back in the hairband days, the
bands didn¹t really care. They just wanted to get a record deal, get on the
road and get going. Now, these kids are looking at everything. They read
voraciously, they¹re all over the Internet, and they don¹t get fooled very
easily.²

HIP-HOP artists always understood branding, Mr. Chidekel says. As soon as
they had a successful album, they started clothing lines, endorsed sneakers
and jumped into Champagne commercials.

For corporations, the deals have both benefits and risks.

Bernd Beetz, the chief executive of the fragrance giant Coty, began seeking
partnerships with musicians, including Jennifer Lopez and Gwen Stefani, as
part of a strategic plan to turn around his company. And it worked.

³We got into a part of the music world which had not been buying fragrance
before,² he says, before cautioning that he scrutinizes each potential
partner because what causes buzz can sometimes generate scorn. ³We¹ve turned
down more than we¹ve accepted.²

It is precisely because so much money is being raked in through partnerships
and merchandising that corporate sponsors tread lightly when signing up with
musicians ‹ regardless of whether they are aging baby boomers or digitally
up-to-date new acts.

³Good managers will not work with a band or an artist that doesn¹t have
their head screwed on straight,² Mr. Chidekel says. ³There¹s too much money
involved. They¹ll reject them ‹ no matter how talented they are.²

The antics of Mr. McKagan and a fellow band member, drinks in hand, during
an acceptance speech at the American Music Awards 17 years ago helped lead
to taped delays for the live television show. Now, Mr. McKagan says that it
pays to be business savvy.

³I¹m in extra innings in rock ¹n¹ roll right now ‹ extra innings as far as
me earning money, writing and performing music,² he says. ³I live a good
lifestyle and I¹d like to continue that lifestyle, and I¹m doing everything
I can do to ensure that.²