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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.
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.