Protecting the cash cows

Lest we forget that most large-scale music enterprises are fundamentally no different from other large businesses, The Guardian explores the world of gig insurance:

The amounts of money at risk can be phenomenal. “For a stadium show, it could be anything up to two million quid,” says Enthoven. But it is not just the income from ticket sales at risk. “For an act like One Direction, they possibly make more money from merchandise than they do for the tickets,” suggests Twomey. So that has to be factored into their policies, which are often taken out at the earliest stages in planning a tour and will only run for as long as the tour lasts. “They are not annual policies, like car insurance, where you rack up year after year of no claims,” says Howell. “It is very specific to the life and health of the individual or the band members that you are insuring.”

A policy is generally worked out as a percentage of what the act will make at the end – typically 1.5%-2%, a figure that has not really changed in decades. “If more acts cancelled shows time after time, the premium rates would go up,” says Phil Middleton, general manager at ATC Management whose artists include Radiohead, Nick Cave & The Bad Seeds and Catfish and the Bottlemen.

This suggests, then, that the number of gigs which get pulled is roughly the same as it ever was, even if the value of those cancellations has skyrocketed.

It does make you wonder, though, how the music industry hasn't managed to improve its cancellation rate over the years - it's almost as if they know what breaks musicians, but are prepared to take the risk.

And, of course, if there's ability to insure against your musician breaking, you're going to take a few more risks with them.

You might wonder whose interest the insurance is in.

[Thanks to @zaichishka]

Indiegogo find upsell for crowdfunded projects

Ah, crowdfunding. It's great, but where's the profit for the clearing houses?

Perhaps in selling insurance.

Yes, IndieGoGo is experimenting with allowing crowdfunders the chance to purchase a PPI/Extended Warranty style product that will allow cash to be claimed back if a funded project fails to deliver.

Apart from the upselling aspect, there is surely a worry that if people working on projects are able to think 'well, the people who believed in me will get their money back if I don't deliver' that's going to lead to more, not fewer, abandoned projects and undermine the whole point of crowdfunding in the first place?

Gordon in the morning: Cheryl Cole and the risk register

Cheryl Cole is pulling together her first solo tour, and according to Gordon Smart, has hit a snag:

A source said: “Cheryl wants to put on a real Cirque du Soleil-style show and blow away her audience.

“She’s exchanged ideas with choregraphers and is keen to push herself to the limit."

One might wonder that if she really wants to push herself to the limit, she'd not be talking to vocal coaches rather than dance teachers. Anyway, circus tricks. Why is that a problem?

“Trouble is, that comes at a cost. The more dangerous the stunts, the more she will need to pay in insurance."

The figure Gordon quotes, and is in no way pulled out his ass, is two million pounds of underwriting. This money, once handed over, will mean Cole will be free to enter the arena on a zipwire - you know, like Anne Widdecombe on Strictly.

What is surprising, though, is that Gordon makes a joke about that time Cheryl Cole beat the crap out of the toilet attendant:

The GIRLS ALOUD star wants to fly through the air on zipwires and also perform some fight scenes.

That will bring back memories of that evening in a certain Guildford nightclub.

Given the usual pro-Cole line toed meekly by the paper, that's a bit like hearing Ed Balls say "actually, you know what, George Osborne really knows what he's doing."

Insurers try to avoid paying up for Jackson

Insurance. It's a process whereby you give a company money so that, if something bad happens, they can tell you why they're not going to compensate you.

Lloyds Of London is trying to weasel out of paying up on the policy protecting promoters if Michael Jackson failed to play his London dates:

The promoter should have informed Lloyd's what it knew about the singer's medical history, "including but not limited to, his apparent prescription drug use and/or drug addiction," the suit states.

If this fails, there's every chance that the insurers will start to claim that Jackson isn't actually dead. Or possibly that the corpse should have been put on wires and made to do the shows.

HMV: One day we'll tell our grandkids about shops that sold records

More mounting misery for HMV, as the chain have called in a slash-and-burn "debt management" team from KPMG as it struggles to meet its next loan repayment deadline.

These would be measures in addition to shutting stores - oh, and flogging off the Oxford Street store.

There is some glimmer of hope for the chain, in that it is still making profits - but as EMI has found, profit isn't always enough to be able to cope with the weight of debt some companies are carrying.

Simon Fox is going to meet with one of the insurance companies who are getting jumpy about underwriting wholesale sales to the chain, but even as he does that, other financial 'experts' are gathering to tut. The Guardian reports:

A report by small rating agency Riskdisk, seen by the Guardian, shows the group rating as "suspended". Its risk assessment simply states: "This company appears financially valueless."

The Guardian has spoken to suppliers who suggest that all that's keeping HMV afloat is that it is the last of its kind:

Another supplier, who also asked not to be named, suggested a reduction in credit insurance was unlikely to see the big labels and publishing houses cause problems for HMV. "There is going to be some serious brinkmanship from Simon Fox now. The labels are in a Catch 22. He can say [to labels]: 'You need me. If you lose me you are going to have to talk to the supermarkets – and you know how difficult they are'."

It's true, but it's only true while HMV have customers. If KPMG suggest offloading more stores, there's going to come a point where the number of people the HMV and Waterstones chains are selling too is so slim, labels and publishers might concede they're better off struggling with Tesco and schmoozing with Amazon.

Iggy Pop adds Frank Sidebottom rip-off to awful insurance ads

Even Iggy admitted that his Swiftcover adverts were awful - "embarrassing" was his actual word, I think - but they're still happy to throw cash at him, so he's making new adverts which appear to rip off Frank Sidebottom quite badly:

Swiftcover.com's marketing director Tina Shortle said he was still keen to work with the company on their 2010 campaign.

"Iggy loved the fact that last year's campaign stirred up a lot of emotion, so this year we've played on the controversy with even more irreverent humour," she said. "The introduction of 'Little Iggy' allowed Iggy to play against type and become the chilled-out, golf-playing rock star whilst 'Little Iggy' causes havoc."

You know he does. He really does.

Iggy Pop isn't selling car insurance. Not any more.

The ASA has banned Iggy Pop from advertising SwiftCover car insurance. Not because they want to save him from himself, but because Swiftcover don't cover musicians:

Because the policy was promoted by a well-known musician, which might lead some viewers to believe the policy covered those who worked in entertainment, when it did not, and because Iggy Pop did not have a policy with Swiftcover, we concluded the ad was misleading.

Interesting - so it's unacceptable for an insurance advert to feature an entertainer who would be ineligible for that product? I wonder if that ruling will affect anyone else?

Calm down, dear... it's just the ASA...

Why David Furnish is wise to not talk much

David Furnish has attacked Michael Moore's film, Sicko, which - we suspect - he hasn't actually seen. The movie is based on the US healthcare system, focusing on the seventeen million people without health insurance.

Furnish, bless him, missed the point somewhat:

"I completely disagree with Michael Moore.

"With my own father, when he was ill, the only option was to hire a jet and fly him to America. It was the only place to get good treatment."

No, David, you've agreed with Michael Moore; the American healthcare service is brilliant, if you can pay for it. You seem to have confused his film with one about rubbish doctors.