Corporate Sponsorship: Bacardi, Groove Armada in 360 Deal

From Lars Brandle, Billboard:

Global spirits giant Bacardi has developed a serious thirst for music, via a 360-degree-style deal with British electronic duo Groove Armada.

The integrated marketing deal encompasses recordings, touring and audiovisual content, leading Bacardi global experiential manager Sarah Tinsley to declare: "Essentially we are taking over the role of a record label -- producing the music, promoting new music, and the artist is playing at our events."

"Bacardi doesn't see this as something that they want to earn money from, which is, quite rightly, something a label has to do," Groove Armada manager Dan O'Neil says. "They are looking at it from a point of view of association, and they're getting access to a license to use the music to implement their strategy worldwide."

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Warner Music Acquires French Tour Company Camus

From Reuters:

The French division of Warner Music Group has acquired one of the country's leading tour production and promotion companies, Jean-Claude Camus Productions, for an undisclosed fee.

Camus Productions, which has staged concerts in France for international acts such as Madonna, Michael Jackson and the Rolling Stones, will remain largely autonomous and will continue to be led by Jean-Claude Camus.

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360: Sony BMG Australia Buys Caplice Stake

From Christie Eliezer, Billboard:

Sony BMG Music Entertainment Australia has become the first major label Down Under to invest in artist management and touring. The firm has taken a 50% share in Sydney-based Caplice Management and is negotiating with a second artist management firm. It is also setting up a concert tour business.

Caplice Management, set up in 1995 by managing director David Caplice, looks after Sony BMG acts Human Nature, David Campbell, Dean Geyer, Damien Leith and the Young Divas, plus Warner Music act singer Katie Noonan and TV presenters Craig Low and Toni Pearen.

In 2002, Caplice Management and Sony BMG set up a joint-venture pop and R&B record label called Random Records, to which Paulini and Tammin Sursok are signed.

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Global 360: Warner Buys Finland's HMC

From Lars Brandle, Billboard:

Warner Music Nordic has acquired the multi-faceted Helsinki Music Company, a Finnish firm with operations in recorded music, merchandising, music publishing and touring.

With immediate effect, HMC becomes a wholly-owned division of Warner Music Finland. Financial details were not disclosed.

The deal, unveiled today, follows the appointments of HMC founders Niko Nordström and Asko Kallonen as GM and A&R director of Warner Music Finland, respectively, in October. At that time, Warner Music Nordic president Jonas Siljemark claimed the two executive appointments ushered-in the company's shift toward a 360-degree business model.

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50 Cent: Piracy Hurting My Label, Artists, Music

Cayocosta

50 Cent gave an interview shortly before a performance in Oslo, Norway recently from which the following statement regarding music piracy got a lot of play on P2P blogs:

“What is important for the music industry to understand is that this really doesn't hurt the artists.”

However, the rest of what 50 Cent had to say in the interview actually contradicted that statement:

When asked “How are G-Unit Records doing in these times of file-sharing?" his answer was, “Not so good. The advances in technology impacts everyone, and we all must adapt. Most of all hip-hop, a style of music dependent upon a youthful audience. This market consists of individuals embracing innovations faster than the fans of classical and jazz music.”

Apparently not realizing that piracy-catalyzed 360 deals are actually recouped directly out of the artist's pocket, he went on to offer the following when addressing the issue of lost recorded-music sales revenue, “The concerts are crowded and the industry must understand that they have to manage all the 360 degrees around an artist. They, (the industry), have to maximize their income from concerts and merchandise. It is the only way they can get their marketing money back.”

Further expounding on the negative effects of piracy, he offered, “The main problem is that the artists are not getting as much help developing as before file-sharing. They are now learning to peddle ringtones, not records. They don’t understand the value of a perfect piece of art.”

CAA Raising $150M-$200M Venture Fund

Will agencies soon challenge majors under the 360 model?

From Rafat Ali, paidContent:

Creative Arts Agency, the biggest talent agency in Hollywood, is raising a $150 million-$200 million venture capital fund to invest in startups in the digital/entertainment sector, paidContent.org has learned.

Meanwhile, we have also learned of an effort by Jeff Berg, CEO of the rival agency ICM, who has been talking to an unlikely source for a fund: Paul Jacobs, CEO of Qualcomm.

Other agencies like UTA and William Morris have been investing in startups, and this points to the changing dynamics of the traditional agency business.

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Live Nation Moving Into 360 Territory

From Ethan Smith, Wall Street Journal:

The world's largest concert promoter, Live Nation Inc., has come to a sobering conclusion: Staging live music events isn't enough to drive the growth it needs to thrive in the convulsing music business.

So Chief Executive Michael Rapino has mounted what he calls a "transformation" aimed at finding new ways -- big and small -- to use its platform as a giant in the concert business as a base for expansion.

Part of that transformation means moving into areas traditionally controlled by other players in the music industry, such as record labels. Mr. Rapino has already made waves this year with a $120 million deal with singer Madonna, which, in a first for the company, includes recording as well as touring. He says he is on the hunt for several more such deals. He also made a controversial decision to part ways with Ticketmaster when the company's contract expires at the end of 2008, and run much of the ticketing operation itself.

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Piracy, 360 Deals Squeezing Out Indie Middle Class?

Cayocosta

Interesting discussion at Velvet Rope regarding how indies might potentially end-up the artists most negatively affected by piracy and its repercussions.

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The Piracy Effect: 360 Deals and Artist Branding

From Jeff Leeds, New York Times:

It’s not possible to tabulate the number of acts working under 360 deals, but worldwide, record labels share in the earnings with such diverse acts as Lordi, a Finnish metal band which has its own soft drink and credit card, and Camila, a Mexican pop trio that has been drawing big crowds to its concerts. In the United States, Interscope Records benefits from the marketing spinoffs from the Pussycat Dolls, including a Dolls-theme nightclub in Las Vegas.

“Five or eight years ago an eyebrow would be raised,” said the music producer Josh Abraham, whose recent credits include recordings by Slayer and Pink. “Now it’s everywhere. You can’t talk about what a deal looks like without seeing 360.”

Like many innovations, these deals were born of desperation; after experiencing the financial havoc unleashed by years of slipping CD sales, music companies started viewing the ancillary income from artists as a potential new source of cash. After all, the thinking went, labels invest the most in the risky and expensive process of developing talent, so why shouldn’t they get a bigger share of the talent’s success?

Though the concept could be applied to anyone, even fleetingly famous pop stars, the real potential of a 360-style pact does not emerge unless an act is popular long enough to attract either loyal fans who reliably buy tickets, or attention from business partners who might help market spinoffs like a fragrance or sneaker line.

“Let’s face it, if you’ve sold 1.5 million albums off one single, and here comes your clothing line, and here comes your personalized phone, you haven’t really built a fan base,” Mr. Flohr of ATO said. “You’ve built fans of songs.”

Particulars of a 360 deal might differ from label to label, but a recent Atlantic offer to another act provides an example of how one might be structured.

Atlantic’s document offers a conventional cash advance to sign the artist, who would receive a royalty for sales after expenses were recouped. With the release of the artist’s first album, however, the label has an option to pay an additional $200,000 in exchange for 30 percent of the net income from all touring, merchandise, endorsements and fan-club fees.

Atlantic would also have the right to approve the act’s tour schedule, and the salaries of certain tour and merchandise sales employees hired by the artist. But the label also offers the artist a 30 percent cut of the label’s album profits — if any — which represents an improvement from the typical industry royalty of 15 percent.

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