Musicians Turning Away From Record Companies
Jay's 150 million dollar contract one of richest ever.
The end of an era has come. Record companies are losing out on the best rappers because people are switching from C.D.’s to Itunes and other online music. Concert promoter Live Nation are profiting off this change and have signed the likes of Jay-Z, Madonna, and U-2. Jay-Z’s defection from Def Jam to the concert promoter Live Nation is worth 150 million dollars to Jay. Live Nation’s huge investment in Jay-Z and Madonna’s contract of 102 million is a huge change of cash flow. The young artists will still need record companies as they have great networking capabilities. I
With CD sales dismal and Internet music sites such as iTunes soaring in popularity, major record labels have been forced to rethink their traditional and once-profitable business plans as they scramble to hold on to a diminishing consumer base and straying A-list artists, all of whom are increasingly turning to new technology for their music fix.
Take Rapper Jay-Z, for example, who is soon to become the third major artist to leave a well-known record company, in his case Def Jam Records, in return for a multimillion dollar deal with concert promoter Live Nation, according to The New York Times.
And before him it was superstars Madonna and U2 who penned deals with Live Nation, which is trying to profit where music label staples have not: They reach fans’ pocketbooks not by luring them into outdated record stores but by selling band merchandise, concert tickets and fan club memberships.
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