As the country grapples with economic disruption caused by coronavirus Pandemic, questions remain as to how the live music industry will progress after the unprecedented crisis. Wednesday, Rolling stone published an internal report Live Nation memorandum that describes a proposed business model that will transfer more of the financial charges to artists and agents.
Live Nation states that in 2021, monetary guarantees for artists “will be adjusted down 20% from 2020 levels”. The company also wants to change long-standing practices regarding event cancellations, a decision that could cost an artist thousands of dollars, but potentially save the promoter millions of dollars a year. Live Nation says that if a show is canceled due to poor ticket sales, the artist will only receive 25% of the guarantee. As things stand, guests must pay the full warranty in these cases. In addition, if a concert is canceled due to the artist’s non-compliance with the agreement, the act is required to “pay the promoter twice the artist’s remuneration”.
As Billboard points out that this stipulation “is unprecedented in live music”, although some independent promoters naturally agree with the move, because they believe that the current model disadvantages them: “If I have to cancel my festival, for some reason , I’m supposed to pay the artists in full even if they didn’t help me sell a single ticket, and that’s not fair. “
“We are going through an unprecedented period and must take adequate account of the evolution of market demand, the exponential increase in certain costs and the overall increase in the uncertainty which materially affects our mission,” says Live Nation rating. “In order for us to move forward, we need to make some changes to our agreements with the artists.”
Another proposal in the memo specifies that the artist and not the promoter will be responsible for obtaining cancellation insurance. According to the memo, “The artist is required to maintain their own cancellation insurance because the promoter is not responsible for artist fees in the event of cancellation of the festival due to weather conditions or a case of force major. “
“Everyone has lost money this year – and that includes Live Nation and all the other promoters,” said tour director Christian Coffey, Billboard. “These losses were going to change the way business was done and I think everyone was waiting to see it on paper.”
The memo you can Lily in full at Rolling stone, concludes by acknowledging that the changes are significant and that they “did not make them” without serious consideration. “He continues,” We thank you – and all the artists – for understanding the need for us to make these changes to allow festival activities to continue not only for the artists and producers, but also for the fans. “