The 360 Deal – the music industry’s scary monster

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It’s fun and easy to blame the woes of the world on major labels. After all, they’ve brought us The Pussycat Dolls, Milli Vanilli, and global warming. Oh yeah, there’s also the 360 record deal.

It’s worth mentioning that 360 deals (AKA Multiple Rights Deals) are common across all types of music labels (majors, indies, etc.), and music publishers are also in on the action with versions of their own. Not to be left out, concert promotion giant Live Nation also bangs the drum, having signed so-called 360 deals with the likes of Madonna
and Jay-Z.

360 Deal Breakdown
A decade or so ago, a label’s job was to find talent, finance a recording, manufacture copies, and distribute and promote albums through the industry’s established channels: radio, press, record stores, (video) TV, etc. Inasmuch as the label’s contribution to an artist’s career was in the creation, promotion, and sale of the recorded work, the terms of an artist’s contract with the label were limited to percentages (fair or not) of music sales.

The shift (some cite the 2002 EMI deal with UK megastar Robbie Williams as the dawn of the 360 record company deal) is the labels’ tapping into revenue streams outside of music sales. Concert profits, endorsements, book sales, merchandise – any means of income generated by an artist could be subject to the terms of the deal. Basically, if you’re signed to a 360 deal, when you make money, the label takes some, even if it has nothing to do with selling your music.

The reason why labels wanted to do this seems clear: self preservation. Album sales are down and are not coming back to where they peaked in 2009, and labels are not making the money they used to. Creative artists are finding new ways to make money outside of the record-sale paradigm, and labels are looking to benefit.

Tour support
Each 360 deal is different, but in many cases, artists who would never have received tour support from their label can expect to get some advances in exchange for a percent of touring income. Considering the artist is getting money up front, and touring has traditionally been tied to the promotion of record sales, this element of the 360 deals seems one of the easier to defend.

But, detractors argue, labels are woefully understaffed and have no expertise in event production or promotion, so expecting them to take a hand in promoting, booking, and managing a tour with any degree of competence is foolish. Why share the revenue with them? Particularly as you’ll still need to hire (and pay) a booking agent, promoter, and tour manager.

We’re jamming – not rapping
An argument used in support of 360 deals includes the fact that some bands – jam bands are most commonly used as the example – who would never have received label interest in in the past will now be able to get a deal, which means money up front to help promote and expand their careers.

Jam bands have always turned the industry model upside down, and even the most successful have never been label showpieces. Minimal record sales, songs too long for radio, endless touring, encouraging fans to record shows and distribute bootlegs… this is not how the labels work. With a 360 deal, advocates argue, these types of bands will court favor with labels who won’t be focused exclusively on how the records sell.

On the other side of this coin are rappers and hip hop artists. Clothing, shoe, beverage, and other non-music endorsement deals are where many hip hop artists earn their living, and now this income would be subject to being split with a label. In addition, artists who want nothing to do with endorsements or products/promotions unrelated to music may find themselves forced into such deals by a label looking to cash in on their popularity without consideration for their best interest or artistic integrity.

Get a hit… no hurry
Another argument in support of the 360 deal is that with a larger stake in an artist’s long-term success, labels are likely banking on one immediate hit and will sign artists with the intent of helping them develop, mature, and build an audience over time. Labels do spend a lot of money and take the bulk of the risk on an artist’s commercial viability, and when the risk doesn’t pay off right away, they’ll cut their losses by dropping the artist, often only months after signing them.

360 deals may take some of that pressure off. The need for an immediate blockbuster hit is tempered if the artist shows incremental successes. Longevity as an artist is often tied to an organic, and slow, incubation process. Labels making money off multiple streams takes the edge off their investment having to return immediately.

This is all dismissed by detractors who argue that this is counter to the way labels have always operated. You’re going to promote this album and this artist, and in six months, when the album hasn’t sold, you’re going to stand behind this guy for another and another? Fat chance.

New paradigm
Not long ago – when the barriers to bringing an album to market included massive recording costs and the need for radio airplay, mainstream press, and TV – the value of signing with a major label was obvious. But everything has changed. Blogs, digital promotion, online videos, downloading, licensing, and touring are major parts of the new paradigm, and the labels have little to do with any of that. Not to mention that the cost of recording an album can be significantly less than what it used to be.

So are 360 deals the future? Who knows? There’s no question they’re here now, but there are those in the industry who argue that these deals won’t be around in another ten years and won’t save the old guard. Successful independents have managers and hand-picked teams that work as a 360 system now. If an artist can assemble his or her own team who can manage all the aspects of his/her career and share in the successes, is willing to work hard and be patient – and especially if he or she can manage to find financial backing – the limits to how grand a career you can carve without a label are constantly being pushed.

Maybe the labels will take a page from the indie playbook and develop systems that can deliver on all the things they mean to profit from. It seems difficult to imagine a music industry without the big guys around to push the big stars. Indie clout challenges the old operating procedures, but the old dogs aren’t dead… yet.

More on 360 Deals:
The Musician’s Guide To The 360 Record Deal (Music Think Tank)

360 Deals and What They Indicate About the Future of the Music Industry Structure
(By Jonathan E. Basofin from Chicago-Kent College of Law, Illinois Institute of Technology). This PDF offers a very thorough exploration of the industry and how 360 Deals fit in.

61 thoughts on “The 360 Deal – the music industry’s scary monster

  1. Yesterday, while I was at work, my sister stole my iphone and tested to see if it can survive a 40 foot drop, just so she can be
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  7. Interesting post, Andre. I think 360 deals can work really well for both sides of the agreement when done carefully but there are so many potential loop holes, you just need to step with caution.

  8. Here in Canada the whole indie roots/folk/blues music scene runs on zero-degree “deals” – we all do everything ourselves and we help each other out within the scene. It’s a total meritocracy with quality rising to the top and the audiences finding value through a variety of means: CDs, internet, independent venues, small festivals. I’ve been at for 40 years full-time and, as the Italians say, “my shoulders are covered,” (the house is paid for…) and have never had a “deal” – 360 or otherwise. The only time I’ve ever gotten ripped off was when I wrote music for a movie and they screwed us by insisting that the producer’s wife be listed as a “co-writer” – she still gets to buy a coffee at Tim’s with her share of my royalties.

    Otherwise, I’ve stuck by my principle and it’s worked out pretty well: Do your best and keep all the money.

  9. The internet has created a “do it yourself” atmosphere in the music industry. This approach will not pull the plug on 360 deals. The majors will keep it around as it is a good vehicle for profit and will adventually themselves get involved supportively in all the production aspects of the 360.

  10. Great post!

    After reading this, 360 deals don’t sound so bad to a new indie.
    A major label sticking around to development an artist is what I like about the 360 deal.

    Bobby Borg once told me, “a percentage of something is better than a 100% of nothing.”

    1. Ive always felt this way. Bands, and artists are so scared to
      give up anything, that no one ever hears about them.
      If no one knows you exist, how can you earn a living.
      Tunecore tells the biggest lie, that you can do it all yourself,
      let’s see how far that takes unknown bands. You need help.

  11. its bad how the labels are basiclly saying,,hey we put you in that spotlight now we want a cut of everything your doing..but labels not backing up there artists forces us to do it ourselves.,THANKS SOULJA BOY FOR SHOWING US THE WAYS OF INTERNET MARKETING..STEELO

  12. If a 360 type deal can get you past the Tuesday night steak lounge than it’s something to consider. The reality is large professional endevors take a team of crafts people to pull off well and if you want to be a manager and more than your Art will suffer:

  13. Piracy will be ending soon, as soon as the overreach is taken out of the bills. And labels will once again enter a new “glory” period as piracy ceases. Hopefully music will also get better. The last time this happened, because of people repurchasing their LP libraries on CD’s, we got disco. And “shipping platinum” where sales were counted on LP’s shipped and not the returns. Which put tons of “Grease” soundtracks and other bombs with platinum sales status in cutout bins. And then the genius of “cleans”, where artists’ management bought their own records by the semi-truck full wholesale and recycled them (in and out of the warehouse in the middle of the night) just to run up sales figures. (And you always wondered where all those thousands of $.25 brand new LP copies of “Thriller” at the indoor swap meets came from.)

  14. The new music industry isn’t about music.  If you love music, teach or play at your local pub.  Business is about money.  Always has been, and with the internet taking huge chunks out of the music sales part 360 deals are more important than ever for the labels to recoup the millions they spend promoting artists whose music is simply streamed or stolen instead of bought.  I’m not defending the labels, but if you think you can become the next Foo Fighters or Katy Perry without one, you are delusional.  So we all better get used to these, and learn to negotiate the contracts so that we the artists get enough out of it not to need the label anymore.  In the beginning though, you’ve got to have them barring some internet anomaly (i.e. Rebecca Black). 

  15. We are all legends in our own minds.
    Sorry for the the clIche, but if you make
    enough that you don’t have a side job, or another
    full time other job (other than Music) good for you.

  16. Why do I need a 360 deal?  I write all my songs, I play all the instruments, I do my own recording/mixing and mastering, I do all the art work, all the marketing and promotion and soon I will manufacture all the copies of CDs to meet my demand as well…etc….  What gives?  This sounds like the industry trying to become a new strain of bottom feeders trying to find yet another new way to lighten artists’ wallets. 

    1. You don’t.  But will you be able to do all the recording, mixing, mastering, artwork, marketing, promotion, and manufacturing when the demand is 10,000 albums and you’re touring?  Probably not all by yourself, but by that time you can take a 360 deal (the easy way), or assemble your team and control your own “360 deal” (the smart way, in my opinion).  

      Also can you post a link to your music? I’d like to see and hear this truly one man operation!  Inspiring!

      1. heya brother – here is some inspiration for ya…  one man…  no plan.  if ya like it like it.
        couldn’t agree more..  just keeping up with all the interweb nonsense is enough to make a guy wanna bag it…  but then someone says “nice” or buys an album..  makes it all worth while. having a team even if they are only part time is GREAT!

    2. lol well thats you. Its a lot of artist that are not in your position as far as resources and finances. as long as there are poor artist in the world it will always be a need for a major label. In simple terms a label aint nothing but a bank loan with a ridiculous interest rate LMBO. While it is some artist who can afford to push themselves on a scale, some of us have a hard time making music and getting things done. If a label spends eehhhh6.8 million over say three albums and make this mega star, why wouldn’t the label want to cash in on a lot of their side ventures that is snowballing from the investment made by the label when that artist was working at walmart with just a talent and a dream? I understand it. I wouldn’t suggest taking any deal you don’t need, but if you need it then go for it. They may hit you up but atleast its better than unloading trucks at UPS. IJS

  17. I’m glad I’ve  been wood shedding and writing 1000s of things,and haven’t had a deal.In case you haven’t been paying attention,the writer for decades was getting 1 cent(penny)per sale.If you think receiving monies upfront to record ,create videos,distribute,tour and promote known as “recoupable” is any thing more than a loan ask on welfare after “earning “millions.Record companies are now making this one cent and, if you cant tell-they aren’t happy .Thankfully Technology  is growing and I can express myself in many ways without costing me an arm and a leg ,and i stand to make a dollar a song instead a penny a unit.
    Phuch the industry,paybacks are a bch.And I’d never dream of charging a fan 250.00 to see me live unless that money went to charity .
    Thanks for the heads up.

    1. Cool story bro, I feel you on that, I had a gig last year and the club owner was trying to charge my fans $10 bucks at the door and I thought it would be better to charge less like $5 bucks to get more people at the club!

  18. 360 deals are the only way to make money now.
    if they label helps sell enough merch and concerts etc. then sign with them.
    if you think you can sell your own cds merch and set up a tour then stay indie and diy.

    1. I would rather be a signed indie reggae singer with a indie record company, than to be a Slave to a 360 deal.
      When you’re a indie artist; you have creative control, but you are still doing all the music work yourself with a little help for online distribution, record sales, music videos, and touring with a music indie distribution company.

      My future is reggae music in the next ten years.
      Reggae music is my calling.

  19. I can understand why labels need money to stay in biz. The issue I have is not with the labels, it is with artists who think they are ready for one.. Its all about value.. what value does the artist bring to the industry, and what value does the industry bring to the artist. Also.. what value the artist brings to the consumer, and the consumer valuing the content enough to pay for it. The word for 2012 is VALUE.

  20. It’s good to know this. Even though 99.9% of people reading this will never have to worry about it, it’s important to understand so you don’t aspire to something that you may not want. Personally, the thought of one company that used to be a record company taking care of all aspects of my music career is a scary one. The potential for abuse and incompetence is mind numbing.

    Back in the 80’s and early 90’s, getting signed was the only way to “make it”. Now, more than ever, no single person or company can know everything about the music industry and there are as many ways to “make it” as there are people who want to. Always remember this: NO ONE is going to come along and be so blown away by your music that they will decide to take care of all the business for you so you can concentrate on being an artist (OK it’s so rare that you should just assume the fairy tale is false). Therefore, knowing as much as you can about as many different aspects of the music business as you can is your best hope for success.

  21. Thank you for this wonderful article. This is info more musicians need to know, regardless of when the 360 deals began, many don’t know about it. You’re helping empower through education and information – a wonderful thing. Thanks!

  22. Thank you so much for taking the time to put this article together. I just think its a little out of date. The music industry started doing this almost 8 years ago. Live nations 360 deals was also 5-7 years ago. Again, thank you for taking the time. You have awesome articles on here. This just seems like a re-hash with nothing new to add to the discussion. 

    1. No, it already states that it was going on since 2002 with Robbie Williams, so it’s not out of date. Your comments are really irrelevant.

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