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Once reluctant to be seen as selling out to corporate sponsors, artists are keen to sign up. </p> <p>“BlackBerry made the TV commercial with our music and then spent many millions of dollars on media and TV worldwide,” U2 manager Paul McGuinness said by phone from the Toronto leg of the group’s multi-city tour. “They provided a budget that no record company could have possibly matched.” </p> <p>Record labels have cut marketing budgets as they contend with dwindling revenue from CD sales and piracy rates as high as 95 percent for downloaded music. North America-based companies alone will spend a record $1.08 billion on music sponsorships this year, 8 percent more than in 2007, according to the IEG Sponsorship report. That makes such sponsorships the second- biggest revenue earner for artists after live shows. </p> <p>“Record companies are more desperate for money because of what’s going on and they are trying to do broader-ranging deals with brands,” said Ian Maude, an analyst at London-based media researcher Enders Analysis. </p> <p>The practice is becoming widespread. Bayerische Motoren Werke AG’s Mini brand, celebrating its 50th anniversary, hired Paul Weller to pen a song, while beverage company Bacardi Ltd. lined up Groove Armada concerts and released an exclusive EP. Next month, Michael Jackson’s concert promoter AEG hosts a forum in London for brand managers on linking with musicians. </p> <p>Pearl Jam </p> <p>Corporate sponsorships are providing much-needed funds to record companies, with Sony Music Entertainment and Universal Music Group setting up units to link up musicians with the likes of BlackBerry and Marks & Spencer Group Plc. Research In Motion didn’t respond to a query on details of its U2 sponsorship. </p> <p>Still, mega-artists may start bypassing music companies altogether. Pearl Jam signed a contract in August with Target Corp. to release its newest album “Backspacer” on Sept. 20 in the U.S. and via Apple Inc.’s iTunes Store. Target previously partnered with The Black Eyed Peas, Prince and Christina Aguilera on such releases. AC/DC, Kiss and The Eagles have done release deals with Wal-Mart Stores Inc. </p> <p>“These types of deals will ultimately force reform at record labels and they have to make themselves more appealing to artists,” said Mark Mulligan, a music analyst at Forrester Research Inc. in London. </p> <p>Retailers give musicians more money and greater flexibility on how to release and distribute albums. </p> <p>Madonna, Paul McCartney </p> <p>Record companies have traditionally focused on discovering new talent, recording music and handling the marketing and distribution of albums and artists. </p> <p>While contracts vary, a typical deal allows the musician to earn a royalty between 10 percent and 15 percent on each album sold once the costs of recording are covered. </p> <p>Madonna, Paul McCartney, Radiohead, Nine Inch Nails and Prince have freed themselves from major labels in recent years. </p> <p>“As the music industry has started to break down, the stranglehold labels had over artists and the marketing of artists is loosening,” said Natasha Kizzie, chief executive officer at KLP Entertainment, a unit of ad agency Euro RSCG. KLP created the Bacardi/Groove Armada campaign. </p> <p>Fleeing artists have compounded lower sales of CDs. Sales fell 15 percent last year to $13.8 billion, according to the International Federation of the Phonographic Industry. They were $25.8 billion in 1999, according to Jupiter Research. </p> <p>Skeptical View </p> <p>Warner Music Group Corp., the only publicly traded music company, has fallen 82 percent from a July 2006 high in New York trading amid sliding sales. Universal Music, the largest record company, is owned by Paris-based Vivendi SA, EMI is closely held and Japan’s Sony Corp. owns Sony Music. </p> <p>Granted, most brand money ends up in the hands of top acts such as U2, Beyonce and the Rolling Stones, said Steve Mayall, a director at Music Ally, which researches digital music. </p> <p>“We’ve taken a skeptical view because we haven’t seen anything beyond high-profile brand partnerships,” he said. “Advertisers today need to find people on the Internet, and one key way to do that is using music. When everything is aligned, the music business could double or triple the money it makes.” </p> <p>Music-marketing agencies have sprouted up in a bid to grab more of the corporate sponsorship dollars. Sony Music started SBX late last year to build “artist brand equity,” in Europe, according to Managing Director Marcel Engh. </p> <p>‘Selling Out’ </p> <p>Universal Music Group joined with ad company WPP Plc in 2006 to form brandamp, which developed campaigns including TV commercials by U.K. male group Take That for Marks & Spencer. France’s Publicis SA this week unveiled a branded content division. </p> <p>“Ours is a business not to save the music industry, but to change its role and transform the record label into a music- service provider,” said Sony’s Engh. </p> <p>Before signing an artist, or marketing a new album by an established artist, SBX determines what kind of endorsements may be possible, Engh said. It linked T-Mobile with the singer Pink for an outdoor sing-along at Trafalgar Square in London. </p> <p>“When I was in the record business, you wouldn’t work with advertisers because most of the artists saw it as selling out and it wasn’t needed,” said Steve Stoute, the former president of Interscope Records and executive vice president of Sony Music. “When the money started drying up because of the digitization of the business model, it created the need.” </p> <p>To contact the reporter on this story: Kristen Schweizer at kschweizer1@bloomberg.net </p> <p><a href="http://www.bloomberg.com/apps/news?pid=20601082&sid=aZ1XJ8kzgrF8">http://www.bloomberg.com/</a></p> <div style="display: none">VN:F [1.6.3_896]</div><div class="ratingblock"><div class="ratingblock "><div class="ratingheader "></div><div class="ratingstars "><div id="article_rater_513" class="ratepost gdsr-oxygen gdsr-size-24"><div class="starsbar gdsr-size-24"><div class="gdouter gdheight"><div id="gdr_vote_a513" style="width: 0px;" class="gdinner gdheight"></div><div id="gdr_stars_a513" class="gdsr_rating_as"><a id="gdsrX513X10X0XaXarticle_rater_513Xarticle_loader_513X0X24" title="10 / 10" class="s10" rel="nofollow"></a><a id="gdsrX513X9X0XaXarticle_rater_513Xarticle_loader_513X0X24" title="9 / 10" class="s9" rel="nofollow"></a><a id="gdsrX513X8X0XaXarticle_rater_513Xarticle_loader_513X0X24" title="8 / 10" class="s8" rel="nofollow"></a><a id="gdsrX513X7X0XaXarticle_rater_513Xarticle_loader_513X0X24" title="7 / 10" class="s7" rel="nofollow"></a><a id="gdsrX513X6X0XaXarticle_rater_513Xarticle_loader_513X0X24" title="6 / 10" class="s6" rel="nofollow"></a><a id="gdsrX513X5X0XaXarticle_rater_513Xarticle_loader_513X0X24" title="5 / 10" class="s5" rel="nofollow"></a><a id="gdsrX513X4X0XaXarticle_rater_513Xarticle_loader_513X0X24" title="4 / 10" class="s4" rel="nofollow"></a><a id="gdsrX513X3X0XaXarticle_rater_513Xarticle_loader_513X0X24" title="3 / 10" class="s3" rel="nofollow"></a><a id="gdsrX513X2X0XaXarticle_rater_513Xarticle_loader_513X0X24" title="2 / 10" class="s2" rel="nofollow"></a><a id="gdsrX513X1X0XaXarticle_rater_513Xarticle_loader_513X0X24" title="1 / 10" class="s1" rel="nofollow"></a></div></div></div></div><div id="article_loader_513" style="display: none; 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With a bird’s eye view from an observation deck set up in front of the soundboard were A-list action man Tom Cruise and wife Katie Holmes, along with actresses Cameron Diaz and Ashley Judd, who was rocking with her husband, handsome race car driver Dario Franchitti. (Cruise and Diaz are in town shooting a big-budget flick, while Judd’s hitting the books at Harvard.) Before the show, Bono and the Edge greeted a few folks backstage, including Judd and Franchitti, J. Geils singer Peter Wolf, and former Boston Garden president Larry Moulter. Wolf, we’re told, chatted with the Edge about his upcoming solo LP featuring the likes of Merle Haggard and Shelby Lynne. U2’s manager Paul McGuinness was wandering about with his son, Max, a graduate student at Harvard. (Also at the show were Oedipus and Carter Alan, both DJs who helped break U2 in Boston back in the day.) After the show Bono and the Edge dropped by Revolution Rock Bar, where VIP guests included Judd, Wolf, members of the Irish band Snow Patrol, and DJ Mateo of the Fun Lovin’ Criminals. Bono mingled for awhile, dropping ducats in the laps of grateful Revolution staffers, before returning to the Four Seasons to get some sleep.</p> <p>Caption: Bono and drummer Larry Mullen, Jr. perform during U2’s 360 degree tour stop at Gillette Stadium. (Robert E. Klein for the Boston Globe)</p> <p><a href="http://www.boston.com/ae/celebrity/more_names/blog/2009/09/a_slew_of_celebs_spent.html">http://www.boston.com/</a></p> <div style="display: none">VN:F [1.6.3_896]</div><div class="ratingblock"><div class="ratingblock "><div class="ratingheader "></div><div class="ratingstars "><div id="article_rater_335" class="ratepost gdsr-oxygen gdsr-size-24"><div class="starsbar gdsr-size-24"><div class="gdouter gdheight"><div id="gdr_vote_a335" style="width: 0px;" class="gdinner gdheight"></div><div id="gdr_stars_a335" class="gdsr_rating_as"><a id="gdsrX335X10X0XaXarticle_rater_335Xarticle_loader_335X0X24" title="10 / 10" class="s10" rel="nofollow"></a><a id="gdsrX335X9X0XaXarticle_rater_335Xarticle_loader_335X0X24" title="9 / 10" class="s9" rel="nofollow"></a><a id="gdsrX335X8X0XaXarticle_rater_335Xarticle_loader_335X0X24" title="8 / 10" class="s8" rel="nofollow"></a><a id="gdsrX335X7X0XaXarticle_rater_335Xarticle_loader_335X0X24" title="7 / 10" class="s7" rel="nofollow"></a><a id="gdsrX335X6X0XaXarticle_rater_335Xarticle_loader_335X0X24" title="6 / 10" class="s6" rel="nofollow"></a><a id="gdsrX335X5X0XaXarticle_rater_335Xarticle_loader_335X0X24" title="5 / 10" class="s5" rel="nofollow"></a><a id="gdsrX335X4X0XaXarticle_rater_335Xarticle_loader_335X0X24" title="4 / 10" class="s4" rel="nofollow"></a><a id="gdsrX335X3X0XaXarticle_rater_335Xarticle_loader_335X0X24" title="3 / 10" class="s3" rel="nofollow"></a><a id="gdsrX335X2X0XaXarticle_rater_335Xarticle_loader_335X0X24" title="2 / 10" class="s2" rel="nofollow"></a><a id="gdsrX335X1X0XaXarticle_rater_335Xarticle_loader_335X0X24" title="1 / 10" class="s1" rel="nofollow"></a></div></div></div></div><div id="article_loader_335" style="display: none; 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" title="r" width="450" height="265" class="size-full wp-image-330" /></a><p class="wp-caption-text">U2's (L to R) lead guitarist The Edge, drummer Larry Mullen Jr., lead singer Bono, and bass guitarist Adam Clayton perform during the opening night of the North American leg of their 360 degree tour at Soldier Field in Chicago, September 12, 2009. </p></div><br /> Rather than a high-end ticket price, the big numbers are more about a unique staging concept that boosts configurations at stadiums, and fans know that U2 is again pushing the production envelope. The tour is in support of the band’s latest album, “No Line on the Horizon,” and if it isn’t scaling the sales heights of previous sets — since its March release, “Line” has sold 991,000 copies, according to Nielsen SoundScan — the band’s manager, Paul McGuinness, credits that more to overall market conditions than a decline in the act’s popularity.</p> <p>Though sometimes outspoken about industry issues — his 2008 MIDEM keynote excoriating the industry for its lackluster response to digital distribution still resonates — McGuinness is anything but riled as he sits in an office backstage at Chicago’s Soldier Field just before U2 went onstage. “What do I possibly have to be pissed off about?” he wonders. Both pragmatist and gambler, McGuinness guides the career of what has become arguably the biggest band in the world, and it has been a banner year for the group he has represented since the start of its career.</p> <p>Much like the band he represents, McGuinness continually focuses on breaking new ground, and he’s constantly looking for new ideas. The 360 tour is U2’s first under a new 10-year Live Nation multiple-rights deal. While he doesn’t claim to have all the answers, McGuinness is open to new horizons, as evidenced by “the claw,” the massive staging concept that makes U2’s 360 tour truly an all-encompassing experience.</p> <p>Billboard: How did the European leg feel to you on this run of the 360 tour?</p> <p>Paul McGuinness: Incredible. We played to staggering numbers. We’ve broken records in every building we play because the effect of this production economically is to increase the capacity by about 20 percent routinely. For instance, in Berlin at Olympic Stadium, we held the record already jointly with the Rolling Stones at 70,000. This time I think we put in 90,000. Every building we play we will break whatever record there is there.</p> <p>Billboard: So you feel good about the live part of U2’s business?</p> <p>McGuinness: Absolutely, because in a way there’s a memory in the audience. They’ve always known that when you come to a U2 show — even when we were doing theaters — we would do as much production as we could afford. Once we got into arenas, we loved it — we always played in the round in the arenas — so this seems natural to be in the round in the stadiums.</p> <p>The engineering problems are enormous and costly. We had to find a way for it to be aesthetic and figure out a way of doing video. That cylindrical screen we have — that didn’t exist, we had to get somebody to invent that. We had to design this four-legged thing (the claw) — and build three of them.</p> <p>Billboard: How long will it take to get into the black?</p> <p>McGuinness: When do we hit the break-even point? We haven’t hit it yet. But we will sometime between now and the end of this leg.</p> <p>Billboard: So next year is gravy?</p> <p>McGuinness: Not exactly gravy, because whether we’re playing or not, the overhead is about $750,000 daily. That’s just to have the crew on payroll, to rent the trucks, all that. There’s about 200 trucks. Each stage is 37 trucks, so you’re up to nearly 120 there. And then the universal production is another 50-odd trucks, and there are merchandise trucks and catering trucks.</p> <p>Billboard: Why do that when you can go out and set up a stage and still play stadiums and be in the black before you reach these shores?</p> <p>McGuinness: Well, we have been trying to find a way of doing 360 for years. This was not something we decided to do recently — we just couldn’t find a way of doing it. The engineering to build a temporary structure capable of bearing the weight that this carries, hundreds of tons, nobody had come up with a way of doing that. (Set designer) Willie Williams and (architect) Mark Fisher had been teasing at it for years. </p> <p>The other thing that has come such a long way is the LED technology — those little guys — we started the use of them for the industry with the PopMart tour (in 1997), and they weren’t completely reliable in those days. We had a lot of technical trouble with that. The kind of modern production style really can be traced back to ZooTV (in 1992), which was a groundbreaking production. Building this cylindrical screen was only made possible by the trellis on which it’s mounted, which was invented by this guy named Chuck Hoberman.</p> <p>The coming together of those LED skills, the engineering skills, the imagination of the band, Mark Fisher, years of talking about this and years of seeing occasionally somebody performing in the round in a structure that would take a week or two to build and a week to dismantle. You couldn’t truck it, you certainly couldn’t take it up and down in a couple of days. This had to be transportable — and it is, and it’s a beautiful, beautiful thing.</p> <p>Billboard: The fans seem to get it that you’re bringing them something they’ve never seen before.</p> <p>McGuinness: Each one of these shows there are 10,000 $30 tickets — so even though the gross is expanded by the increase in the capacity, we see what’s happening in the marketplace, people don’t have much money. And so worldwide we came to the decision to have really low-priced tickets. We have some expensive tickets, but our expensive tickets are $250; they’re not as expensive as the Rolling Stones’ or Madonna’s most expensive tickets. I think it’s a very fair pricing. The scaling of this tour has worked everywhere we’ve played.</p> <p>Billboard: Any comment on the state of the music industry right now?</p> <p>McGuinness: I don’t have a recipe for the solution to the woes of the record companies and the recorded side of the music business. It’s very, very important, it must be supported. And there are an awful lot of people and an awful lot of industries and individuals — the telcos, the (Internet service providers), the device manufacturers — that have enjoyed an absolute bonanza since music went online. And I just think they should feel more responsible out of a sense of fairness to the community of creative people who make that music, which is now in so many cases completely free. Times change, mechanisms for distributing music change. I would like to see a greater recognition of the obligations the tech side of the business have to the writers and musicians.</p> <p>I’ve nothing against big companies. Big companies are there to be infiltrated, they want to be infiltrated, they want you to come in and tell them how to do it, what to do. I’ve never found a big corporation hostile to anything we wanted to do. Similarly with Live Nation — our relationship is very close indeed. This is our fourth tour with Arthur (Fogel, global music chairman for Live Nation). The first tour we produced and he promoted. The second one he produced and promoted, because that was better. And as (Live Nation) developed their plan to take Live Nation out of Clear Channel I was absolutely behind that, and I’m totally behind the plan to merge Ticketmaster and Live Nation. I think it’s very good for the industry.</p> <p>(Editing by SheriLinden at Reuters)</p> <p><a href="http://www.reuters.com/article/entertainmentNews/idUSTRE58M17Q20090923">http://www.reuters.com/</a></p> <div style="display: none">VN:F [1.6.3_896]</div><div class="ratingblock"><div class="ratingblock "><div class="ratingheader "></div><div class="ratingstars "><div id="article_rater_329" class="ratepost gdsr-oxygen gdsr-size-24"><div class="starsbar gdsr-size-24"><div class="gdouter gdheight"><div id="gdr_vote_a329" style="width: 0px;" class="gdinner gdheight"></div><div id="gdr_stars_a329" class="gdsr_rating_as"><a id="gdsrX329X10X0XaXarticle_rater_329Xarticle_loader_329X0X24" title="10 / 10" class="s10" rel="nofollow"></a><a id="gdsrX329X9X0XaXarticle_rater_329Xarticle_loader_329X0X24" title="9 / 10" class="s9" rel="nofollow"></a><a id="gdsrX329X8X0XaXarticle_rater_329Xarticle_loader_329X0X24" title="8 / 10" class="s8" rel="nofollow"></a><a 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