LOS ANGELES/NASHVILLE (Billboard) – It’s 9 p.m. at The Gig
in Hollywood and a crowd of L.A. hipsters is trickling in to
catch the evening’s act.

The bar itself is just one of several live music venues
scattered throughout the city that caters to emerging artists
hungry for a stage — however small — to hone their skills and
attract a following. Attendance tonight is sparse, maybe 30
patrons hang on the bar or linger on the beer-stained
dancefloor.

But the band on the dinner-table-sized stage plays to a
much larger audience. Practically unnoticed to all but the
performers are four domed, Vegas-style security cameras hanging
from different areas of the ceiling capturing their every move.
The Gig films all performances — three a night, seven nights a
week — and broadcasts them the next day from its Web site,
http://www.liveatthegig.com.

The Gig is riding a tide of revolution in the concert
business. The ongoing explosion of high-speed, broadband
Internet penetration in the United States has sparked a growing
need for quality, exclusive multimedia content. Live
performances fit this bill perfectly, and everyone from small
clubs to major media companies are getting hip to this fact.

The huge success of AOL’s delivery of the Live 8 concerts
last summer made it clear that both consumer demand and the
potential to offer compelling product exist. For Gig owner
Peter O’Fallon — a film and TV director — recording and
broadcasting shows is a way to not only marry his twin passions
of video and music, but also an attempt to develop new revenue
streams made possible by the Internet.

For the acts that pass through his doors, it’s free online
exposure that rivals any multicity tour, allowing them to post
links to their performances on MySpace or send to friends, fans
and promoters.

For the industry, it’s a rapidly growing business model
that is changing the dynamics among artist, label, venue and
digital music services.

The world’s largest promoters, AEG Live, Live Nation and
House of Blues, which Live Nation acquired just weeks ago, have
all bought into this concept, some more aggressively than
others. HOB was the pioneer with live webcasts from its clubs
dating back to 1995.

"We first focused on live digital delivery of shows because
nobody else was doing it," says Jim Cannella, national director
of corporate partnerships for HOB. "The whole world was
mesmerized by the infinite opportunity the Web represented,
there were widely accepted technology standards to put your
arms around and a market of hungry consumers which was doubling
in size every few months."

Today Live Nation, also the world’s largest venue operator
with its 40-plus amphitheaters, is making a "substantial
commitment" to wire 120 venues and festival sites throughout
North America and Europe with the ability to capture and
repurpose thousands of live concerts. Live Nation currently has
36 wired venues in the States and broadcasted more than 350
concerts from around the world last year.

And Live Nation has been creative in the outlets for these
concerts, including TV, mobile phone carriers, terrestrial and
satellite radio, online and other digital music distribution
avenues. "There’s no end to the uses once (the content is)
captured," says Bruce Eskowitz, president of global venues and
sponsorship for Live Nation. "It opens up tremendous
opportunities with 3G, SDTV, HDTV, live ringtones, etc. The
problem up to now has been the ability to capture it cost
effectively."

Eskowitz says his company’s current digital initiative is
about extending Live Nation’s relationship with its customers.
"An important new way to expand this relationship is through
the recording and distribution of the live concert," he says.

A CONCERT CASH COW?

Although neither the Gig nor Rehearsals.com has started
doing so, both companies plan to sell advertising on their
sites to recoup their investments.

"Ultimately, the idea is to monetize it," O’Fallon says.
"At the moment, there’s not a tremendous amount of money to be
made until there’s tens of thousands of people visiting the
site."

Live music is "definitely" a revenue producer for AOL,
according to Flannigan, with such heavyweights as Intel,
Nissan, Chevy, Lexus and Absolut onboard as advertisers.

"There is certainly a large collection of advertisers out
there who want to associate their brands with live
performance," he says. "Some of the biggest consumer-product
advertisers in the world are starting to feel like digital live
music is a fantastic showcase for their brand."

AOL has a ready-made "billboard" of sorts on each computer
screen where advertisers can reach consumers. Flannigan thinks
live webcasts could also be an "enormous" ancillary revenue
stream for artists, "especially artists like Pearl Jam or Bruce
Springsteen that are mixing up their shows every night," he
says. "There really are 10,000-15,000, even 20,000, people who
are interested in what’s happening at every single show, and if
you add that up it could result in some very meaningful money."

"This asset that we create, this hi-def, Dolby 5.1 sound,
piece of live concert footage, is something that (the artists)
own," Grodsky says. "It’s a copyright we don’t take ownership
of, nor a master we get control of, so it’s something they can
use for live DVD, live audio CD, exclusive product for retail,
bonus content on the Web, really the things they can do with it
are endless. So you’re creating a high-quality asset for them
to leverage down the line."

Lastly there is a revenue possibility through a
revenue-share on the backside, Grodsky says. "The business
model is pretty standard as it relates to the revenue that an
artist shares in from the distribution of the exhibition of the
content," he adds. "But the ability for them to create
additional revenues through their own exploitation of the
master after the fact is unprecedented."

From Reuters/Billboard – Read More Here

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