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Thursday 18 September 2014

U2, get on your big boots and put in some face time over here

As the band hears fresh criticism about tax, Brendan O'Connor says they risk losing touch with their Irish fanbase

Published 01/03/2009 | 00:00

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GOODBYE DUBLIN, HELLO LONDON: U2’s promotional work for the new album, No Line on the Horizon, included a live performance on the roof of the BBC's Broadcasting House

It is surprising that an enterprise of U2's marketing skill would slip up as badly as U2 have this weekend. Unless something drastic has happened between me writing this and you reading it, U2 as they release their new album amidst a storm of hype and publicity have very visibly neglected their home country. And it's not like we couldn't have done with them this weekend.

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For the last week, U2 have mainly been in England. Such has been their ubiquitousness on the BBC that British politicians have been questioning why the British national broadcaster appears to be running a free promotional campaign for U2. As I write this, U2 have not made any significant appearance on any Irish TV or radio programme. There have been two interviews with the same two publications they grant interviews to every time, publications who can be relied on to do the right thing by U2 -- the Irish Times and Hot Press -- but apart from that U2 have been very publicly absent from Ireland as their new album is released here. Worse again, they have been in England. For a band facing a PR crisis on their home turf, it is uncharacteristically stupid of them.

You can see the sense in it in some ways. For example, U2 had a whole edition of BBC's Culture Show devoted to them during the week, and they were the subjects of a suitably high-brow film on Newsnight. This kind of stuff is flattering for them and it hits the kind of mature audience that U2 need to come out and buy their new album. Friday night's appearance on Jonathan Ross would also hit the thirty- and forty-something formerly hipster crowd who possibly still buy a CD of a Saturday, and with Jonathan there was no danger of anything other than what is known in the trade as a blowjob. And just in case anyone missed all of that, there were numerous other high profile outings across multiple BBC radio stations on Friday evening.

It was probably the rooftop concert in London on Friday evening that drove Irish people over the edge. There was something disloyal about it. It seemed like a breach of the intimate relationship people in this country feel we have with U2. It really felt as if U2 were letting us down just when we needed them most. A rooftop U2 gig would have been a most welcome diversion in Dublin over the weekend. Indeed, together with the buzz of a rugby weekend it might have helped people forget the gloom for a few hours at least. It would have been something cheery to talk about. And of course we could have all gone around for weeks swearing we were there.

U2 have clearly had to make hard commercial decisions in recent weeks. They are re-emerging into a very different market to the one they left. First, there are the universal effects of the recession. People are likely to be a bit more selective these days about luxuries, such as buying music. And of course, U2's particular industry is dying on its feet -- of the 70pc of music that is now downloaded, it is estimated that only 10pc of that is paid for. This time out, U2 are also facing much more competition within their stadium-pop market segment. And possibly most important in an industry with a notoriously swift product life-cycle, and an industry where age is one of the few stigmas, the four members of U2 are all approaching 50 years of age and they've been around for thirty-odd years.

So it is only natural that U2 need to make fairly ruthless commercial decisions. The commercial decision last week was clearly this: the UK market is 10 times the size of Ireland's and is also an important bellwether market. U2 will always do fine in Ireland anyway. The single tanked in the UK. Clearly they felt they were needed more across the water. And so for the last week they've been love bombing London while we got the Irish Times, the Hot Press and HMV opening at midnight for those poor unfortunates whose idea of fun is to queue up to buy the latest U2 product. While the decision to snub Ireland this past week may have made immediate commercial sense, it has wider implications and it could prove to be terribly short sighted.

Even in purely business terms, U2's relationship with Ireland is very important to the band. If you look at it through the standard business strategic framework of Michael Porter's theories of competitive advantage you could only conclude that U2 Inc's Irishness, and the band's relationship to this country, are central to the success of the business.

The two fundamental ways in which businesses compete is either through cost leadership or what is called differentiation. U2 clearly do not pursue a cost leadership strategy. They have consistently argued against moves towards giving music away and we can be sure that despite their commitment to having cheap seats on their next tour, they will not be undercutting other live acts. So U2 compete largely by differentiating themselves. They add value by being different -- in their case, you could say, by being unique. And there is no doubt that a huge part of that difference is their Irishness. They constantly refer to their Irishness (remember all those mentions of being just four lads from the northside of Dublin), and their Irish soulfulness and charm has always been central to the marketing of the U2 brand.

Indeed, if we look at the factors in the domestic market that Michael Porter says create internationally successful players like U2, we see that the Irish climate and market from which U2 emerged played a huge part in their success. The Ireland from which U2 emerged had a great tradition of and skills in music and the oral arts in general (part of what Porter calls "factor conditions") which fed into their talent and their success. Also, in Dublin in the late Seventies and early Eighties you had another of Porter's cornerstones for international success -- the kind of ultra-competitive music scene that drove bands towards the kind of innovation and aggression that would better equip them to compete internationally.

In short then, Ireland made U2 and Ireland is still central to U2's success. So any severing of the intimate relationship between Ireland and U2 would be disastrous for the band, not just creatively but also for their international image. So why then did U2 not see that this relationship is in trouble right now and why didn't they do something about it? The warning signs were all there in the mixed coverage the band and their new single got here in the last few weeks. And of course in the general mood of the country.

The backdrop to all this is the taxation issue. Roughly speaking, a few years ago, when the Irish Government put a cap on the amount of money U2 as artists could earn tax free in this country, U2 shifted much of their music publishing operation to Holland. According to Friday's Irish Times: "By switching to a Dutch company, the group pay about five per cent tax, less than half the rate they would have paid at home." The matter arose again last week, and it had fresh potency because of our current economic situation. Various people from the band and their management responded by pointing out that the members of U2 are tax compliant in Ireland (which no one doubted for a second). In two different interviews, The Edge asserted that U2's tax affairs are U2's private business and shouldn't be a matter for public debate. Bono, for his part, professed that criticism about the band's tax situation hurts him and that accusations of hypocrisy sting him. Both Bono and The Edge asserted in different ways that there was no point in really trying to explain the matter and Bono pointed out that the band do pay "millions and millions of dollars in tax". Overall, though, the response was rather incoherent.

Unfortunately for U2, many don't accept that their tax affairs are their own private business. This is primarily because Bono has been extremely vocal about what should be done with Irish taxes and with taxpayers' money around the world. And whether it's fair or not, this does lead people to think they have the right to comment on Bono's tax situation. If U2 want to say to people: "what I do with my money and how I deal with my tax is my own business", then unfortunately for Bono, people are bound to respond: "well eff off and stop telling us our business then." It's a sticky one for U2. Essentially this is not the most comfortable time to be rich in Ireland. And it seems they know it. As The Edge told Hot Press: "It seems now that every successful entrepreneur and every successful businessman is being viewed with total suspicion for being overly greedy and taking advantage of the boom. Well, it's like you can't have it both . . . What we need now is jobs. We need entrepreneurs, we need people who are willing to get out there and have ideas and do stuff."

He's right, but it's an uncomfortable place for the guitarist in a rock 'n' roll band to be -- defending rich people while most of his fans are probably having a very tough time financially.

Bono talks in the same interview about the support he gets for his charity work from people like Paddy McKillen, Derek Quinlan, Johnny Ronan, Sean Mulryan and Bernard McNamara.

Larry Mullen, traditionally the most shrewd, no-nonsense and "ordinary" member of U2, is clearly very sensitive to how things are in Ireland right now. He admits, almost apologetically, that he's "a rich rock star" and that the downturn isn't going to affect him hugely. But he is conscious that there is a different mood now. Again, he seems to echo The Edge's worries about Irish people's suspicion of the rich right now. "Rich people and successful people are all lumped in together now -- and there's a perception that everyone's ripping everyone off. But I think that will settle down. I think it's a knee-jerk reaction, and it'll find its level. Or else there'll be a revolt."

It is odd that U2 seem to be aware of the precariousness of their relationship -- as rich rock stars -- with their Irish fans right now, but that they haven't chosen to make any gesture to Ireland this past week. When it comes to U2 it doesn't take much. When Bono turns on the charm he wins us all over. A few public outings wouldn't have gone astray last week, maybe a gatecrashing of the Late Late to sing a few songs. They could have performed before the rugby match in Croke Park, they could have announced a free gig for this summer. These were all things that would have cost U2 very little but that would have protected their relationship with their most strategically important client -- the Irish people.

If Bono is hurt by criticism of his tax affairs then a pity about him. I know that I and a lot of Irish U2 fans are hurt this weekend that we didn't get anything a little bit special from U2 this time; one of those grand gestures they do so well, something that would have added to the gaiety of the nation. I know that lots of Irish U2 fans and Irish people in general feel that U2 have turned their back on Ireland right now, just when we needed them most. And we thought U2 more than anyone knew that you don't take any market for granted, particularly not a core one like this. U2 could easily have distracted from the taxation issue this weekend. And they still could with some grand generous gesture towards this country. In the meantime, the matter is going to stick in the craw of ordinary Irish people looking at taking pay cuts and paying more taxes themselves. It's hard to be both rich and popular right now. But you would have thought if anyone could have pulled it off, Bono could.

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