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Live Nation forms new business with Universal Music

By | Published on Tuesday 20 September 2011

Live Nation

Live Nation’s Executive Chairman Irving Azoff last week promised a big announcement for yesterday, and ‘big’ was definitely part of it, in that two of the world’s biggest music companies announced an alliance, Live Nation and the Universal Music Group.

It is Live Nation’s management division, Azoff’s own Front Line business, which will form a new joint venture with Universal, which will seemingly focus on extending the reach and revenue potential of big name artists through brand partnerships, and the creation of packages containing recordings, tickets and merchandise sold direct to fans via artist websites. It seems that the new venture will be primarily led by the Front Line team, with Universal bringing artists to the table.

Confirming the new alliance, Azoff told reporters: “This is an unprecedented partnership that unites the world’s top music artists with the world’s leading artist management, live entertainment, event ticketing and sponsorship resources to drive innovation across our industry. We see tremendous opportunities to work together to create a broad range of products built on the power of music and the direct connection between artists and fans. We look forward to working closely with Lucian Grainge and the talented UMG team in this new and exciting chapter of the music industry”.

The aforementioned Grainge, Universal Music’s CEO, added: “Together with Irving and [Live Nation CEO] Michael [Rapino], we are creating a series of new platforms and global direct-to-consumer initiatives that will further expand the presence of our artists in this evolving marketplace while providing music fans with even more flexibility in how they consume music. Our artists and their music are at the heart of everything that we do, and by leveraging our combined skills, strengths and global reach with that of Live Nation Entertainment, our management companies, artists and their fans will benefit immeasurably”.

Of course, alliances between companies as big as Live Nation and Universal pose a number of interesting questions. Not least, will the managers of Universal’s big name artists want to work with what is basically a spin-off from a competing management firm? Will the alliance reduce Front Line’s abilities to make demands of Universal where the artists it manages are signed to the major’s labels?

Will those who tour with Live Nation’s bitter rivals AEG Live be discouraged from using the new JV’s services? Will the JV result in other alliances between Live Nation and Universal businesses, especially in the areas where they compete head on, such as merchandising (Live Nation Merchandise v Bravado)? And what to Ticketmaster owners Live Nation think of Universal parent company Vivendi’s recent moves into the European ticketing sector? What if Vivendi decided to brand its ticketing companies Universal?

Still, in theory there’s nothing to stop big companies which compete in some markets from collaborating in others, and if the new company can prove itself in the brand partnership and direct fan engagement space, even those allied to Live Nation and Universal’s competitors may wish to hire the new business’s services.