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Live music is back and breaking records

Good evening from Chicago, wherever you may be. Apologies for the mid-week email. I am trying to take a few days off this week, and have had a piece on live music brewing for a few days. So you're getting the normal edition today instead of Sunday. However, you will still get a surprise this weekend.

When my colleague Adam Jackson walked into Chicago's Grant Park last weekend, he joined a throng of more than 100,000 revelers celebrating the return of live music. Lollapalooza, one of the largest music festivals in the world, marked the unofficial start of summer festival season with one of the largest public gatherings since the start of the pandemic.

Save for a handful of drive-in shows and super-spreader events, concerts have been on hiatus since the middle of March 2020. But that's all changed in the past couple of weeks. Green Day, Weezer and Fall Out Boy performed in front of 35,000 people in Arlington, Texas, to kick off their Hella Mega Tour. The Black Crowes have played several shows in the past two weeks, dotting from Tennessee to Connecticut to Michigan.

Attendees at Lollapalooza were reminded of the pandemic upon entry, when they had to either show proof of vaccination or a negative covid test in the past 72 hours. But once inside, the festivalgoers ate sausages, drank beer and snapped photos like it was just another day in paradise.

Live music is roaring back even as the number of coronavirus cases has climbed by more than 100% over the last two weeks thanks to the delta variant. While individual shows have been postponed due to coronavirus outbreaks, everyone in live music believes the business will come back at full speed in the fall.

The concert business, like so many sectors of society, isn't ready to go back to hibernation and isolation. There are too many people itching to work again. Too many musicians eager to make millions. And too many young people eager to party.

"The excitement level is really high," said Omar Al-Joulani of Live Nation, the largest concert promoter. "You can see it with ticket sales. Festivals are blowing through tickets."

For those curious, I asked Adam to share a few thoughts from Lollapalooza:

"The festival was packed full of people from all age groups releasing that pent up energy from a year or so of quarantine and movement restrictions. Since the festival is all ages, I heard a lot of adults/people my age complain that a lot of the angsty teens were acting stupid and pissing people off. … 

I saw a girl yesterday present documentation of a negative test but was denied from entering at first because they required that the results come back negative within the previous 72 hours from presenting it. Her test was taken a couple days before the festival -- so that 72-hour green light expired by Sunday. Even so, she slinked to the front of another line nearby and was admitted there. When I asked her if she lost her vaccination card or something, she said she was only half-vaccinated and is scheduled to get her second dose when she gets back home. She said she got vaccinated because the delta seemed serious lately."

Sales for all kinds of music events are exceeding all previous records. Lollapalooza sold out, moving more than 400,000 tickets. Coachella sold out without even posting a lineup. Railbird, a newer festival in Lexington, Kentucky, doubled its sales from its last event.

Festival season typically stretches from the spring into the early fall, when the weather is prime. But promoters are cramming a year's worth of festivals into the late summer and early fall, resulting in huge festivals every weekend – often times the same weekend. Over Labor Day weekend, Megen Thee Stallion will perform at Bonnaroo in Manchester Tennessee, Made in America in Philadelphia and BottleRock in Napa, California.

At the same time, arenas, amphitheaters and stadiums are all open for business, booking as many artists as they can before basketball and hockey are back in season. Many of these venues will hold six or seven artists for the same date, waiting for the acts to sort out the proper routing for their tours.

During most of the pandemic, live music executives assumed that shows catering to baby boomers would be slower to come back. But sales for Dead & Company, the Eagles and James Taylor are strong, according to Rick Roskin, co-head of contemporary music at Creative Artists Agency.

"All ages, all genres are ready to go," said Roskin. "Everyone wants to work and everyone wants to perform. Promoters and artists are just trying to find the right time."

The only types of acts that can't get on the road just yet are those that have major productions that take several months to prepare. WME music co-chief Kirk Sommer booked a 2020 tour for the Killers that sold 300,000 tickets in the U.K.. It would have been one of the biggest tours in the country. But they pushed it to 2021, and then pushed it again to 2022.

This demand is putting all kinds of strain on the less famous parts of the business. Sound companies, lighting experts, video producers and truckers are all facing more demand than they've ever experienced before. Crew needs to move equipment from city to city, and there's only so much crew to go around in a tight labor market.

Arena or amphitheater-level pop tours can often be 12, 14, 18 trucks, according to David Zedeck, co-head of global music at United Talent Agency.

It's also created some unfortunate new businesses. People are so eager to go back to live music that some are faking vaccine cards. The Federal Bureau of Investigation warned people not to use fake cards to get into events like Lollapalooza.

Some executives worry that the industry is doing too much too soon – although not necessarily for health reasons. John Meglen, co-chief of ConcertsWest, worries that there will be more supply than demand.  It's hard to put on multiple major shows a night in cities and not expect them to steal audience from one another.

"You can't have a show Monday, Tuesday, Wednesday, Thursday and Friday and think they'll all do great business," Meglen said. "It's just too much supply. Let's call this the glass half empty take on this.

But most people in the music business seem to feel like Green Day's Billie Joe Armstrong. "Take a look around you," he said during his show in Arlington. "This is human contact. We cannot be locked up anymore. We need to be together."

For those of you who want to see live music but don't want to go to a show in-person, there are plenty of festivals and shows offering live streams at home. Stay safe out there. – Lucas Shaw

The best of Screentime (and other stuff)

Marvel, Miniseries and the Challenge of Formatting Television
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Succession Drama Grips Scholastic
The majority owner of the company that publishes "Harry Potter" and "Clifford the Big Red Dog" left his shares to his lover – not his family.
I Don't See an End to This
"Conversations about homosexuality and homophobia in hip-hop that have been percolating all year have come to a head," writes Craig Jenkins.
The Uneasy Future of Live Music in Chicago
Uh-oh.

So About That $900 Million…

Reese Witherspoon

Photographer: Frazer Harrison/Getty Images

A few weeks ago, I wrote a column titled "How Much Would You Pay to Worth With Reese Witherspoon?" We already have an answer: $900 million.

Witherspoon sold a majority stake in her company Hello Sunshine to an investment group backed by Blackstone and led by former Disney executives Kevin Mayer and Tom Staggs. The price is staggering considering that Hello Sunshine is a 4 ½ years old company that has made a handful of TV shows (like "Big Little Lies" and "The Morning Show"). But it makes more sense if you consider the larger strategy.

Mayer and Staggs are going to buy a few different media companies with unique attributes (like a famous founder and a killer team) that they will bring together under one roof. Their companies will sell TV shows and movies to the biggest streaming services in the world, taking advantage of what has been a sellers market. (Some would say it is now a buyers' market, but that's a story for another day.) 

They have a lot of options for where to spend Blackstone's money next. Here is an incomplete list of the companies for sale:

  • Imagine, the production company of Ron Howard and Brian Grazer.
  • Westbrook, the production company of Will Smith.
  • Legendary, the studio behind "Godzilla vs. Kong."
  • Endeavor Content, the financing and production arm of Endeavor.
  • Propagate Content, the producer of "Chopped" and other reality shows.

Mayer and Staggs are hoping their combination of talent (like Witherspoon) with quality (like "Big Little Lies") will give them leverage in the marketplace, allowing them to retain ownership (or at least get a great deal). They aren't the only ones to think about this "arms dealer" approach. ViacomCBS sampled it, and then decide to invest in its own streaming service instead. Sony is doing it by necessity; it has no streaming service.

While it is a great time to be selling shows for a profit, it's very hard to own shows or reap some big windfall. You are grinding out a 20% profit on most of what you make, not creating an asset that will deliver returns for decades to come. But unlike Sony or ViacomCBS, Mayer and Staggs don't have a ton of legacy infrastructure to support. They want to roll up some companies and then either take it public or sell to a media company.  

Whether or not you think Mayer and Staggs can pull it off, that is one heck of an exit for Hello Sunshine's investors, which include AT&T and Emerson Collective. It's also a validation of what Witherspoon and her six-person leadership team, led by Sarah Harden, have built over the past few years.

Hello Sunshine only hired a bank to suss out their options after they received inbound interest, and wanted to do a deal that allowed them to retain much of their independence.

"Early stage companies often compromise for revenue. I want to keep building without unnatural pressures," Harden said. "We have a very clear view of the type of company we want to build." 

Next up for Hello Sunshine: Unscripted TV, and kids programming.

Fall preview!

Bloomberg Businessweek published a fall culture preview in its latest issue. Some highlights:

  • Felix Gillette on "The Many Saints of Newark," David Chase's movie prequel to "The Sopranos."
  • James Tarmy on the return of Broadway.
  • Coming later this week: Kelly Gilblom on Marvel's first Asian-American superhero, Gerry Smith on Jon Stewart's new talk show for Apple and my piece on live music.

Spotify's new pricing plan

Spotify is testing a paid service that is cheaper than $9.99, its normal price. This new service will include advertising, but give you more ability to pick songs and skip songs than in the free version.

Spotify is trying to build up its advertising business, and this is certainly one way of doing that. But I don't imagine record labels are very happy about a cheaper subscription service since they already gripe about how cheap the service is in many foreign markets.

Deals, deals, deals

  • Celebrity chef Gordon Ramsay has formed a new production studio that will "distribute unscripted programming focused on food and lifestyle for Fox, its free streaming service Tubi." Fox bought Ramsay out of all his current TV shows.
  • Rihanna is now worth $1.7 billion, thanks large to Fenty Beauty.
  • I missed this last week, but Primary Wave has acquired a 42% stake in Prince's estate, giving it a lot of say in how his work is exploited.
  • SiriusXM has won a deal with Brittany Luse and Eric Eddings, hosts of "The Nod" podcast. Eddings and Luse had a public dispute with Spotify over control of their podcast.
  • YouTube rolled out a $100 million fund for Shorts, its answer to TikTok. Shorts has been a major bright spot for YouTube this year.

The weekly playlist will come with Sunday's edition.

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