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.
It’ll be a tax write-off for LN.
Lesson learned – do not name your new company with the word “lab” in it unless you are truly a lab (eLabs, is another fine example).
Eric Garland is a great guy, super smart and a friend of artists. I’m glad he got his payday and I don’t think he’s mourning the end of this corporate choke hold. Now free of Live Nation, I would hope to see him apply his learning and earnings towards the cause to help and empower artists towards a better tomorrow.
Let’s hope some good comes of this at the expense of Live Nation. Didn’t Eric get like $20m for BC? That’ll pay a few bills for a little while.
Agreed. Eric is a good guy. I’ve known him for years and been on panels with him a number of times.
Funny how burned bridges only go one-way.
I think unfortunately there’s some truth to that; the consensus may be that Eric and the other co-founders of BigChampagne stepped on a few people to get where they are; both inside and outside of Live Nation. That’s what’s coming back from sources speaking to me, there seems to be a bad aftertaste after what seemed like a great opportunity to innovate. Then again, Live Nation may not be the easiest place in the world to innovate; corporations and fast startups rarely dance well together (and I can show you endless examples that prove this).
we seem to be involved in a constant global wank fest these days and as far as i can tell has been going on as long as ive been alive… id say once the weapons evolved to the point most people just stayed home within their borders instead of trying to conquer vast lands it really started to become a serious wank fest and only seems to be getting worse…
they’ll keep doing their big data thing and algo thing and long tail thing and whatever else thing in desperate hopes it will all correct itself or just work out, but in reality its just self servicing money siphoning on a whole other level… when you look at countries like India who seem to just really be sinking their teeth into the whole big data thing and offering their prestigious schooling on it, and you actually listen to their b.s., it’s a frightening proposition for the future and what’s to come…
Overall i understand those guys, easily bored, get in get out… Not very motivating anywhere out there these days other then to stack as much money as possible by any means necessary all else be damned…
Sincerely, Labs Survivor
Funny you say that. Well, they were spacious at first I guess. I was given a little tour before the hiring and acquisition spree started; guess it got cramped after that.
Live Nation Labs demise is another significant failure where a bunch very smart technolists are put in a room without any supervision or guidance from anyone who really understands the entertainment business. Just because someone is young and smart hardly qualifies them to make decisions about a business they have no real day to day experience in. Sooner or later a situation will arise where know it all technologists will realize that they can’t t change the music business without the help of people who have actually been in it.
On the contrary.
LNL had ample music business expertise. Garland, Fleischer, Kaplan, Brooks…say what you will, but these are not rubes.
The issue, so it seemed, was that cool kids sometimes expend great resources in maintaining their image. Perhaps occasionally at the expense of fulfilling their charter.
Real consumer technology R&D is messy, grueling, and unpredictable. Focus too long on making safe defensible bets (especially in a highly charged political environ like LN) and you’ll soon find yourself atop an expensive pile of nothing.
I agree you have to have knowledge from inside the industry. With massive industry growth comes specialization. Folks who have been on a tour bus know different things than those who are in a single box office location. Folks who involved with touring or venues don’t even sell records (why can you only buy a T-shirt not a record at a show?). People who sell records are changing as fast as record stores closed. The “smarts” is to know what won’t change! FANS are the boss and collecting data about them is the new currency. The shortest path for a fan to an artist is the key.
I hear more content will be generated through Ticketmaster which has hired a couple strong people with YouTube, branded content, and overall content marketing experience. Ticketmaster has all the scale anyway and never really has done any marketing other than trying to promote an event or tour. Hope everyone lands on their feet.
The top lab crew will make it out in the world since they are now “released” from LNL as the plan for the top team is to make a product in demand, take$ and run away to the next venture as soon as possible as this is their life plan–1 year would of worked out better for all at labs.
The remaining crew may be in a bad place as HR @ LN may always look at them as overfed lab rats. They will be offered positions to apply to and most likely the lab rats will not last at LN. Increased supervision/corporate structure and the lack of being able party on the job may cause the end of the relationships one way or another.
Garland’s not just the really nice guy the previous comments accurately portray — he’s also brilliant. In 2000, he and Joe saw clearly what was coming for the music industry and screamed it as loud as they could. Labels and others making bank off shiny discs didn’t want to hear about and stuck their heads in the sand. If Eric’s out, I’ll be looking to wherever he decides to land…because it’s guaranteed to succeed.
Wow – it’s amazing how misinformed DMN is. The BigChampagne acquisition was 1) cheap and nowhere near the sums expressed here, 2) the only real talent within BigChampagne was and is Joe Fleischer’s, 3) Garland is a good guy, but he’s nothing more than an articulate mouthpiece – a fast taking salesman and that’s why Rapino liked him (he “sold” Michael on a vision but he execute even though Rapino gave him wide space and a checkbook to make things happen), but garland was an emperor with no clothes – a lightweight sales guy pretending to be a pioneer or entrepreneur who couldn’t win over the promoters or the sponsorships divisions he had to answer to, 4) Live Nation’s real data business is called LiveAnalyticd run by a guy named John Forese and managed by street smart kid named Ari and a rocket scientist named Danny – that business is respected and beloved by the company and its clients – Forese and Ari and Danny are not talkers, they are doers and thinkers with little flash and lots of depth, which brings me back to Garland he has NO DEPTH. I wish Garland well, but he’s better off selling pens for Jordan Belfort.
Rotf Its Just Corporate America Taking Advantage Of The Artist and Consumers Wow!!!! This Is Happening in every corporation, But thanks Big Business for showing “Us” the people, how not to do things lol… #BlueFlameMega
What happens to LiveNation.com? does that shut down too? I actually just spent some time on Boomrat – neat site, curious to see how that “folds into Insomniac.” Did Labs work on Insomniac’s site?
I spent time with all of these guys as they were “four-wall’d” to redefine the consumers experience through LN digital “Products”. While I am sure some had their hearts with the Concert Fan, there was little to no understanding of the concert business which ultimately killed LN Labs. They took enormous risks that failed In such an Epic way that enemies and non-supporters were constantly in Rapino’s “In Box”. Garland, et al were one dimensional, egotistical children with the keys to the car and played big shots with an open checkbook. It was amazing to many inside that they were allowed suck the life out of the .com (how many redesigns in 3 years?) and have Free Rein over the most valued of LN B2C products, web and mobile. Their impact to the bottom line (both in expenses, poor investments/acquisitions and lost revenue) has to go down as Rapino’s biggest faux pas.
Ethan (arrogance incarnate) said it best in a meeting, “we (Labs) builds products and if that creates internal conflict we are doing our job.” As anyone knows who’s been bullied by Kaplan, his last good work was when he was a fan, wishing he were Michael Stipe (epitomizes integrity and compassion). Instead; You’re just another douće bag that caught a break and ruined an intern’s dream and kicked a few baby seals on the way.