By Yinka Adegoke 2 hours, 53 minutes ago
NEW YORK (Reuters) -
Live Nation Inc said on Monday it had
signed a 12-year global contract to handle the merchandising,
digital and branding rights of Irish band U2, along with its
touring.
The deal with U2, one of the world's biggest rock bands,
comes just five months after Live Nation announced a
comprehensive partnership with pop star Madonna, which included
her coveted recording rights.
But Live Nation said U2 will continue the band's long-term
recording and publishing relationship with Universal Music
Group, a unit of French media giant Vivendi.
"It's not a do or die situation that we have to be involved
in the recordings," said Live Nation Chairman Michael Cohl in
an interview with Reuters. "We'd prefer to, but it's not always
available."
The company would not reveal financial terms of the U2
deal.
The deal with Madonna, which included the recording rights,
was estimated to be worth $120 million over 10 years including
a three-album commitment after the artist submits her last
album to her current music company, Warner Music Group.
Live Nation has been expanding its business model to
develop more far-reaching and deeper relationships with artists
beyond just handling their touring.
Its partnership with U2 will now include merchandise and
licensing rights, sponsorship and strategic alliances, digital
rights, fan club/Web sites and other marketing and creative
services.
Cohl said the new model will help boost the overall
company's profit margins. Analysts have said that touring and
ticketing have traditionally been a low-margin business.
Several of the company's executives had managed U2's tours
for more than 20 years.
DIVERSIFICATION
Live Nation's attempts to diversify its business and win
artists from music labels, come as the major labels are also
trying to reinvent their business and win control of touring,
digital and merchandise rights of their artists.
The music companies are keen to replace lost revenues
caused by falling recorded music sales. Fans are buying fewer
CDs and are not purchasing enough digital music to make up for
the shortfall.
The major labels have started signing some artists to
so-called 360-degree deals which, as well as recording,
includes publishing, touring, digital and other rights.
Cohl said his company will focus on signing other major
artists rather than developing new acts such as a traditional
music label or publishing house.
"Our intention is to work with artists who are already
making it or on their way to making it," he said.
Live Nation said its new strategy will also include its Web
site LiveNation, which Cohl said was aiming to become the
biggest music portal on the Web through a mixture of ticketing,
merchandise sales as well as fan clubs and other features.
(Additional reporting by Justin Grant; editing by
Jacqueline Wong and Sue Thomas)
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