The following is a developing story. Stay tuned for ongoing updates.
After just three years, Live Nation is shutting down its expensive, $30 million-plus ‘Labs’ initiative. According to
a pair of multiple sources now speaking with Digital Music News, Live Nation Entertainment officially closed Labs on December 31st.
Live Nation Labs was started immediately after Live Nation Entertainment acquired BigChampagne in late 2011.
Surviving employees are in the process of being re-assigned into separate divisions.
Eric Garland, CEO of BigChampagne and head of the deflated Labs, did not renew a contract for 2015 and is ‘definitely out,’ according to one source. Garland has not responded to an inquiry from Digital Music News, though top Labs employee Ethan Kaplan (previously from Warner Music Group) confirmed his exit, also effective December 31st. Whether Garland continues separately with BigChampagne is unclear, though tapping former major label clients, an increasingly soggy bunch, could be tricky.
Perhaps sniffing collapse, Labs staffer Kyle Bylin jumped ship several months ago after accepting a position at Shazam competitor SoundHound. Bylin was lured by Labs from his former position at Billboard.
One top-level survivor appears to be Joe Fleischer, a cofounder at BigChampagne who has now assumed an important role related to show sponsorships and corporation partnerships. That has evolved into a large and growing revenue pile for Live Nation, and a smart specialization card for Fleischer.
In terms of how much of a hole this has been for Live Nation, one source was careful to note that the $30 million acquisition was ‘just the beginning’. Giant salaries for Garland et. al., not to mention heavy hiring and payroll, spacious offices, and comfy perks made this one pricey gamble.
Separately, the Labs division also embarked on their own acquisitions, with mediocre results. One example is Boomrat, which is also getting shut down, effective January 15th. The EDM-focused site, one of several Labs acquisitions and launches, appears to have had little impact on the space. Boomrat will be merging into Insomniac, though few additional details are known at this stage.
Overall, the shutdown runs completely contrary to the big-data, blue-sky platitudes that marked the acquisition in 2011. Indeed, one corporate-type at Live Nation called the whole thing a ‘disruptive wank-fest,’ one that did little for the core objectives of tightening fan relationships and associated revenues, not to mention more pressing Live Nation challenges.
There were signs of problems right from the beginning. That includes the presence of a separate, already-existing digital division that appeared to be competing directly with BigChampagne’s charter. Then, there’s the problem with the prickly, easily-bored personalities that typically describe founders of acquired companies. According to one source, Garland is leaving after suffering through an earn-out obligation period, which sounds like a familiar exercise in getting paid and getting out.
Live Nation Entertainment has not offered any comment on the developments.
More as it develops.