Having signed an interesting recording contract with EMI last year, now Korn have entered into an equally interesting partnership with Live Nation, formerly the live music bit of Clear Channel.
The deal will see Live Nation investing in the band, with a reported $3 million upfront payment, in return for a cut of future recording, publishing, touring, merchandising, and sponsorship revenues. The deal will work alongside Korn's recording contract, which also gave EMI a cut of a number of different revenue streams (ie not just recording sales) in return for a reported $30 million advance.
The logic employed by Korn's management, The Firm, is that if every major player involved with a band has a vested interest in said band's entire career, rather than just their specific domain, then all of those players will have to take a more holistic approach. So if EMI has a vested interest in Korn's ticket sales, and Live Nation in the band's record sales, the two congloms will better support each other's work, which is better for the band.
Confirming the Clear Channel deal, The Firm CEO Jeff Kwatinetz told reporters: "This is about shifting power back to artists by finding strategic partners who are the best in their respective businesses. This deal allows [Live Nation] to focus not just on selling concert tickets, but on fully investing in the Korn brand."
Throwing their support behind the new deal, EMI North America boss David Munns said: "EMI was first to recognise the logic and potential of going beyond the traditional record label/artist relationship and creating partnerships that allowed us to be part of an artists' overall career. We are delighted that Live Nation is also breaking the mould and joining with us".
These kind of deals are important to the major congloms, especially the record labels, who recognise that they need to tap into less traditional revenue streams in order to ensure long term financial security - especially given that the long term value of record sales in the digital age is hard to predict.
Of course, as companies like EMI and Live Nation start to move into each other's territories, interesting things might happen to the overall structure of the music industry - with a growing argument that the strongest music companies will be those trading in different sectors of the business. Now apart from the rest of the Clear Channel group, what's to stop Live Nation merging with a major record company that is keen to compete in size with SonyBMG and Universal, wary of EC regulations that will prevent it merging with another record company, and aware of the need to diversify? I wonder.