Good News For People Who Like Bad News (For Record Labels): Madonna Leaves Warner For Live Nation

People’s head spun when Radiohead announced their little experiment in the tip jar release model, and although terms and details of a proper CD release remain to be seen, the past week’s been a parade of major label artists (sort of) following suit: Trent Reznor announced his long expected break with Interscope et al, Oasis and Jamiroquai are rumored to release their next efforts free and online, and today comes news of Madonna’s attempt to drive a nail in the record label’s coffers:

Via Wall Street Journal:

In the latest seismic shift to rock the music industry, pop superstar Madonna is close to leaving Warner Music Group Corp.’s Warner Bros. Records for a $120 million deal with concert-promotion giant Live Nation Inc., according to people familiar with the deal. Madonna still has another studio album left to deliver with Warner Music.

The 10-year pact with Live Nation, of Beverly Hills, Calif., would give Madonna a rich mix of cash and stock in exchange for the rights to sell three studio albums, promote concert tours, sell merchandise and license her name.

The fact that a concert promoter like Live Nation is set to land the deal rather than a traditional record label like Warner Music is a sign of how quickly the landscape is shifting in the cratering music industry.

Traditionally, acts like Madonna would release their recordings through a major record label and then make separate deals for touring and merchandising with other companies. Now, however, a range of players in the music business — labels, concert promoters and even managers and ticketing companies — are eager to make broad deals that give them a larger piece of the pie by participating in revenue streams such as endorsement deals between artists and advertisers, as well as the sales of concert tickets and merchandise.

The Journal reports Madonna’s deal specifics: a $17.5M advance, advance payments on the new albums set at $50M and $60M. Also, Live Nation’s anteing up $50M for the right to promote her concert tours. Meanwhile, Madge has managed to retain the industry standard 90/10 split on the concert gate.

As far as marketable major label artists, Madonna’s up there. So you have Madonna on the big-fish side, Radiohead on the innovator side … is this the end of the labels scheme?

Put another way: If she isn’t the straw that’ll break the label’s back, which artist needs to come out and go the non-label route to call it a technical knockout?

One thing’s for sure: It isn’t a fun time to work for a major.