Live gigs appear to be where the money is these days. Diehard Madonna fans were charged up to £160 to see the singer at the Wembley Arena last year - given ticket prices like that, it is hardly surprising that her recent Confessions Tour grossed $260.1 million worldwide, according to Billboard magazine, with £11.8 million coming from her London dates alone.

You have to sell a lot of records to match that. Her most recent album, Confessions on a Dance Floor, sold 8 million worldwide, grossing maybe $80 million after the retailer's cut, less than a third of the revenue from the tour.

So it's not that surprising that Madonna has walked away from her lifelong record company, Warner, and signed up with Live Nation, managers of the Wembley Arena and the Brixton Academy, which is getting a cut of both the album and live rights for the next decade.

Some say, in the week of Radiohead's honesty box approach, that this is another blow for the beleaguered record company. That's not so convincing when you consider that Warner spent 20 years helping build her up. After all, at 49, her best albums are probably behind her.

Without Warner, Madonna would not be so big. And, even if Warner had signed her up again, it would not been anything like as profitable for the company as her first deal. Still, they get to keep her catalogue, as more than adequate compensation.

What is true is that live music is healthy and can't be pirated - and record companies are not big enough in the live business. But they won't be able to reinvent themselves by paying up to keep bestseller acts, in return for a slice of live revenues, because that costs too much. And while everybody raves about the future of live, there is a limit to how much people will pay too - £160 stretches most wallets after all.

It is the Material Girl who has done best of all out of this deal, with $120 million in the bank. Live Nation has paid dearly for its coup. The company will have to hope that Madonna has another 10 years of athletic performances in her.

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