Lady Gaga case study

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9-512-016 REV: OCTOBER 15, 2011 ANITA ELBERSE MICHAEL CHRISTENSEN Lady Gaga (A) “Let’s get everyone in a room to discuss what to do,” said Troy Carter, manager of up-and-coming pop star Lady Gaga, to his assistant as he walked into his Santa Monica office. It was September 2009, a week after the MTV Video Music Awards (VMAs) ceremony that had seen Gaga win a coveted Best New Artist award and that had featured a spectacular performance of her hit song Paparazzi—ending with the singer-songwriter, covered in fake blood, dangling from the ceiling—but that had also led to the unraveling of Gaga’s carefully crafted touring plans. At the VMAs, hip-hop artist Kanye West—with whom Gaga had planned to co-headline a highprofile arena…show more content…
Recorded Music By some estimates, the recorded-music business was an $8.5 billion industry in the U.S. (see Exhibit 1 for general trends in recorded-music revenues, and Exhibit 2a for the bestselling artists in recorded music in 2008). Physical sales had fallen markedly since the early 2000s, while digital sales had grown to be a $1.6 billion share.1 Further declines of physical recorded-music sales were widely expected, as several brick-and-mortar music retailers were struggling and mass merchants dedicated less shelf space to music. Digital outlets such as Apple’s iTunes store and Amazon had seen strong growth: tellingly, iTunes—accounting for roughly three quarters of all digital music sales—had overtaken Walmart to become the largest seller of recorded music. Artists and labels Popular artists tended to have an exclusive contract with a record company (or “record label”). Under the terms of such a record contract, artists usually committed to creating four to six albums’ worth of music, while the label agreed to manufacture, distribute, and promote that music. Beginning artists could expect an advance—intended to cover living and other expenses—in the range of $200,000 to $300,000; superstars sometimes received up-front fees of $1 million
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