September 25, 2007
Living in a material world
Madonna’s negotiations to ditch her record label Warner Music Group in favour of Live Nation, her tour promotor is further bad news for music labels, which are suffering badly from the decline in CD sales and problems in getting people to pay for downloads.
But it is also of interest because it shows the pressures on flat-tariff pricing for all bands and singers, which is being played out between the music labels and iTunes. Apple has resisted the push from some music labels to charge more for downloads from popular artists than its flat rate 99c (in the US) per song.
Variable pricing is alive and well for pop concerts. Indeed, the price of admission for Madonna, the Rolling Stones and other classic acts has inflated wildly in the past few years.
It is quite common to pay $200 a ticket or more for the top acts now, although the punter admittedly gets more for her money than before. The big concert tours are meticulously choreographed and lit as, no doubt, Madonna’s 50th birthday tour next year will be.
But the high prices are an expression of something else: the ease of illegal downloading has affected the stars’ recorded music income and they are making up with events that cannot, by definition, be pirated: live shows.
They and their promoters can set the prices for such tours in the open market rather than depending on the flat pricing formerly imposed by music labels and now enforced by Apple. And the market is telling them that their fans will pay a lot of money.
