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Touring, Streaming Drive Music Business

Here are the four people — and one group of folks — who most matter in the music biz.

Michael Rapino
It’s not how many albums you sell, but how many tickets. The live business rules, and Live Nation is the dominant player. Sure, anybody can write a check once, but if you want to tour more than your local market, chances are you’re going to come in contact with Live Nation and its CEO.

Further, Rapino controls Artist Nation, i.e., the acts. Did this make him overpay for the Miley Cyrus tour, since she’s a client? I’ll let you decide.

Rapino worked his way up from the bottom; he’s a survivor. He put the knife in Barry Diller and Michael Cohl. If you don’t think Rapino is a formidable competitor, you don’t know the people who control this business.

Jay Marciano
People are so focused on the flash of recordings that they don’t know who’s really in control.

Marciano worked his way up from local promoter to Universal Concerts to House of Blues to MSG to AEG Europe to his present role as AEG Live chairman. And everybody loves him.

Live Nation runs on fear. AEG is a family. Live Nation is Walmart. AEG is Costco.
AEG is a diverse company. From its Concerts West division with John Meglen and Paul Gongaware, Las Vegas and the Stones, to Paul Tollett and Coachella. And it’s constantly expanding, with a stake in China. It’s a two horse race: Live Nation and AEG. Both companies write the checks. They’re the key to your survival.

Lucian Grainge
Wasn’t Universal supposed to fold after Doug Morris left?

UMG chairman and CEO Grainge is a swashbuckler. He slimmed Universal and continued to have hits — and it is a hitmaking biz. Major labels have had a remarkable resurgence. Unlike Morris, the 53-year-old Grainge has many years ahead of him. It’s his record business, the rest of us just live in it.

Daniel Ek
Rail against Spotify and its founder if you must, but that just demonstrates how behind the times you are. Spotify doesn’t care about you, it cares about its competitors: YouTube, Rdio, Deezer, Beats. Only one will survive, and Spotify is so well-positioned, the game is almost over.

The only company that can compete is Google, but Sergey Brin and Larry Page’s firm can’t seem to shoot straight. Unlike Apple, which insists on getting it right, Google releases me-too product marketed poorly. At least with YouTube, they have a head start.
Meanwhile, Beats’ best option is to gain headway in the U.S. and force a merger with Spotify. This is not the headphone business, with the rest of the industry sleeping. This is an investment game. Look at scale — at how many countries Spotify is in. Spotify is a poor marketer, and nobody even knows it’s got chips in devices, but while you were lamenting payouts, Spotify invested. All that hogwash about it being unprofitable. … Look at the cell phone and cable industries. You invest and invest, then you dominate.

Independent Concert Promoters
Whether it be Don Fox’s Beaver Prods., the C3 guys, SFX or JAM, they’ve all got checkbooks, and they’re open to opportunities. They’re not as powerful as Live Nation and AEG, but they dwarf the power of any indie label. They spend cash every day.

And, except for SFX, it’s their money. So they market and do their best to get it back.

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