With sales revenues shrinking, manpower dwindling and margins down to a razor edge, the major label hand has begun to covetously eye its bands’ touring revenue.
Talk of major labels negotiating a share in artists’ tour revenue is quietly sparking controversy in the talent-acquisition/representation community. And most recently, insiders share that Sony Music Group is now negotiating for a piece of the act’s tour revenue if the artist is to be given tour support.
The move, which is commonplace in the indie label world, marks an aggressive play by majors to diversify their revenue stream and transition out of depending on record sales as their sole revenue source.
However, at this stage of discussions, there are no guidelines or benchmarks established to set an industry standard. And the report from a few legal eagles that have encountered this issue recently is that labels are negotiating the most that they can get. For example: tour revenue participation in perpetuity; cross-collateralizing with past album cycles and even asking for a piece of the tour-merchandise revenue. An inside source shared that the music group may also apply this practice to developing acts currently on their roster that will need tour support for their next record. It appears to be an artist-renegotiation play, but this time it’s starting from the label side. [more @ www.hitsdailydouble.com]