ANALYSIS:U2'S DEAL with concert promoter Live Nation comes as no surprise. Traditionally rock bands made money from two different revenue streams - sales of CDs and box-office receipts from live shows.
With CD sales continuing to plummet, the touring end of the music business is in rude good health and has taken on a vital new significance. U2's Live Nation deal will effectively streamline the band's touring operation.
When, last year, Live Nation signed Madonna to a $120 million, 10-year deal, it was the first contract of its kind. Previously an artist such as Madonna would have a recording deal with a record label to look after her album releases and a separate deal with a tour promoter to look after her touring. Madonna's Live Nation deal was the first high-profile example of the new "360 degree" model.
Under this new model, a company such as Live Nation looks after every single aspect of an artist's career: from the recording and release of the CD, to the sale of merchandise, to negotiating sponsorship deals and promoting concert tours.
The deal was a reflection of the fact that for many bands now the money to be made from live shows far outstrips the money that can be made from CD sales. This is largely due to the volume of illegal downloading of music CDs taking place on the net.
The U2 Live Nation deal is not as all-encompassing as Madonna's. The band will keep their recording and publishing contracts with their record label, Universal Music, but every other aspect of their career (including their web presence, their digital rights and their merchandising) is bundled up into the Live Nation deal.
U2 have been working with Live Nation for 10 years on their live shows, but it was always on a piecemeal, tour-by-tour basis. Whereas previously the band would have subcontracted out a lot of their touring work (one company to work on ticketing, one company to work on their merchandise stalls etc), they have now streamlined the whole procedure by handing everything over to Live Nation.
No figures were released as to how much U2 would get from the 12-year deal, but given their attraction as one of the world's biggest live draws, the sum would be well in excess of Madonna's $120 million deal.
U2's most recent Vertigo tour was the second highest-grossing concert tour in history (just behind the Rolling Stones' Bigger Bang tour) and earned them $390 million in box-office receipts. The band are due to release a new album either late this year or early next year and will embark on another global tour shortly after its release.
