February 10, 2009
And now I pronounce you... a monopoly

Last year David Byrne wrote a wonderful article in Wired explaining different music distribution strategies for emerging artists, in the first few paragraphs he explained: "What is called the music business today, however, is not the business of producing music. At some point it became the business of selling CDs in plastic cases, and that business will soon be over. But that's not bad news for music, and it's certainly not bad news for musicians."

The problem though, is that although the concentration of power within the industry has shifted significantly, it hasn't necessarily put the artists or audiences in the driving seat. "Music industry" is no longer synonymous with "recording industry", but that's just because now it's all about live events and ancillary deals and there are two "major" companies dominating that scene: Ticketmaster and Live Nation and soon it might just be one.

Last week the The Wall Street Journal reported on the possibility of a merger between these two giants. The joining of forces between the largest ticketing/artist-management company in the world and the largest concert promoter would give birth to the mother of all vertical integration strategies. With "360" deals, recording contracts, artist management, venues, ticketing and more, this merger would put Hollywood's "studio system" days to shame, this is what dominating markets is all about.

Although there are some doubts as to whether the fusion will go through at all, (they still will have be approved by anti-trust authorities), its potential consequences illustrate the importance of live music today. Last year, Radiohead released In Rainbows almost at the same time as Madonna signed her multi-million "360" deal; it was touted as the week that changed the industry. If this merger is approved its implications are much bigger.

Ticket prices would be easily defined by one entity, who would also determine the "convenience fees" on top of those prices. Marketing would only peripherally fall into the label's domain, making it even less relevant. Smaller concert promoters will have an even harder time finding adequate venues and smaller venues would be left less negotiating room. Billboard even suggests that agents "should be concerned with their relevance". It all seem to point towards a stronger gatekeeper and to a diminished diversity of voices.

The threat of the merger already provoked some artists to speak up. Bruce Springsteen posted a message on his site expressing his discontent with the potential alliance: "the one thing that would make the current ticket situation even worse for the fan than it is now would be Ticketmaster and Live Nation coming up with a single system, thereby returning us to a near monopoly situation in music ticketing."

Nevertheless, it's not all bad, because as Billboard points out "The marketing efficiencies would be enormous, as would the value to sponsors." Somehow, I doubt that fans will see this as a benefit...