Virgin Nation

Branding the material girl

What?: After immense speculation, Madonna has signed her musical life away to Live Nation in a 10-year deal allegedly worth $120M.

The decision means severing ties with Warner bros, her comfortable home of 25 years, to embrace a 360- degree distribution model with the live promoter. Live Nation will distribute three studio albums, promote concert tours, sell merchandise and license her name. The lucrative package could consist of an upfront advance of $17.5M plus $50-60M per album. “The paradigm in the music business has shifted and, as an artist and a business woman, I have to move with that shift,” said Madonna, getting her calculator out. “With this new partnership, the possibilities are endless.”

So what?: “Live Nation already pays $1.5B to artists each year for a 4% margin business, so signing the most successful female artist of all time for about $12M per year in a 10-year partnership to ‘grow the pie’ seems like an easy decision,” said Goldman Sachs analyst Mark Wienkes. However, Live Nation will only receive 10% of gross tour revenue and will need to shift 15M copies of each of the proposed three albums to recoup its investment.

Madonna’s Confessions tour last year ranked as the highest-grossing tour ever by a female artist, generating roughly $195M from 60 shows to 1.2M fans. The accompanying album sold 1.6M in the US alone. But just how long before this cash cow starts to look leathery? The question is will the world still want to buy albums 10 years from now from an artist in her 60s, let alone pay to see her clad in Lycra riding a bull?

“Time will tell if this attachment with LiveNation allows her to focus on creating new music free of restraint or if getting into bed with a glorified ticket broker will only result in bleeding her loyal fanbase dry. I hope it’s the former, sadly I’m bracingmyself for the latter”
Tony Barton: Moderator, Madonna Tribe

“Madonna may be coming to the realisation that her days as a multi-million unit, stadium filling songstress will not last forever, so it’s not unreasonable that she takes this lucrative offer while her stock is still high. Warner music are in no position to offer such a hefty advance in their current state and while Live Nation have the bank balance, do they have the expertise to support all aspects of her career going forward, not just theability to fill arenas?”
Dom Hodge: Strategist, FRUKT

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