Irving Azoff And The “De-Monetization” Of The Music Industry

Posted by: Jon Fine on May 27, 2009

TicketMaster Entertainment CEO Irving Azoff, appearing at News Corp’s annual All Things Digital conference in Carlsbad, California, proved an interesting and free-speaking interviewee. Although, churlish as it may be, he was much more interesting and free-speaking about the macroeconomics of the music industry than on the specifics of his company—and its proposed merger with LiveNation Inc.—and the criticisms lobbed at it. (I’ve hit one such lob myself.)

“Recorded music is more a marketing tool than a revenue source” for acts now, said Azoff, who also still manages the likes of The Eagles, Neil Diamond, and Christina Aguilera. His storied career, and well-earned reputation as one of the fiercest and savviest managers in the business, took flight with the Eagles, back in the Seventies when both Azoff and his artists were significantly more mustachioed and bushy-haired than they are today.

They also had a much easier time making a dollar back then. Today,“recorded music is down to less than 6%” of major musical acts’ revenues, he divulged. To put this in its proper perspective, consider that such income once was such acts’ “biggest revenue source,” he added.

Much of what Azoff said pointed to a view of music revolving around the live music experience. This, obviously, plays into his wheelhouse as one overseeing business interests so dependent on concerts. Still, his logic is convincing, and the examples he cited concerning what he called the “demonetization” of the music business were striking.

Artists walk in to his office, Azoff said, “who used to make $300,000 to $500,000 a year in royalties [from selling recordings]. And now that’s diminished to less than $50,000” a year. This means, unsurprisingly, “the creative side” of the music business is “very anxious” about the changes that have swept this landscape.

His answer, as cringe-inducing is it may be to artistic types uncomfortable with the ways of business, is understanding the branding and promotional value of music. He cited new deals like his client Aguilera working with Procter and Gamble to launch a line of fragrances.

A glimmer of hope for his old-school artists: While Azoff said CD sales have been declining alarmingly, and especially back-catalog CD sales, that business “appears to be bottoming out.” And, he added, “I don’t think the CD will go away totally.”

Compare all this candor to the following exchange regarding TicketMaster and its proposed merger with LiveNation:

Interviewer Kara Swisher: How do you answer criticisms that [the merger] creates this behemoth.
Azoff: We think everything we do revolves around what’s good fir the artist and what’s good for the fan.

As Swisher pointed out, songwriter-cum-secular-saint Bruce Springsteen, among others, strongly objects to this view. But Azoff said that Springsteen was “uninformed” about what his company did.

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Reader Comments

Jack

May 28, 2009 02:49 PM

"We think every thing revolves what's good for my wallet, screw the artist, impale the fan"; What The Mighty Midget really thinks........

M.E.

May 28, 2009 06:41 PM

If recorded music is going to be just a marketing tool, then you can kiss recorded music as art goodbye.
www.audio-engineer.net

Patrick Haveron

May 30, 2009 03:56 PM

Of course Azoff says CD's are a marketing tool; recorded music gives his overblown acts (Eagles, GnR, Jimmy Buffett,Fleetwood Mac, Neil Diamond, Van Halen, Aerosmith) a reason to tour and sell T-shirts. New music from 'classic' or 'retro' acts is rarely a must have, compared to the latest breakthrough - Lady Gaga, Leona, Adele, Duffy, Amy etc. How would he break a new act?? Its all about the music really, and somebody has to fund this. It wont be Ticketmaster.

grant

June 2, 2009 05:53 PM

potential article

Don

June 10, 2009 10:44 PM

To anyone who wonders where music as art is going to be in the future, ask yourself, where is poetry these days? The music economy's future is the poetry economy's presence.

Which is to say that music has already, lets say about 2001, ceased to be the cultural touchstone it was.

This generation's Beatles isn't Kanye West, it's the American Idol TV Show.

Cy

June 11, 2009 04:57 PM

I like to think this generation's Beatles is Coldplay, a band that still refuses to put out an album until they have perfected every track on it.

This as opposed to the American Idol, and every other quick catchy single artist out there that puts one decent track down and 11 other pieces of garbage and charges 9.99 for it.

This is why CDs quit selling, not the advent of P2P and torrents via the internet.

Tracy Collins

August 29, 2009 11:06 PM

Hell with American Idol and all the reality shows. I worked for a label that Azoff owned the majority of shares in while still involve with The Eagles as group and as solo artist for those members that chose to make their own albums. Azoff is a history making mogul in this business even if he stopped today. CD sales, download sales, Ticketmaster or Live Nation. There's some folks out their with the magic, but Irving has held onto it for years and don't ever expect him to go away until he's six feet under.

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The media, entertainment and marketing worlds continue to shapeshift on a near-daily basis, as new forms arise and old assumptions erode. Where is it all going? No one really knows. But on this blog BusinessWeek’s media writers Tom Lowry and Ron Grover promise to provide ample helpings of scoop, provocation, and sharp analysis as they track and annotate this constantly changing terrain.

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