What is a 360 Deal?
What is a 360 Deal?
The 360 degree recording deal (also known as 360 deal or Multiple Rights Deal) is any legally binding contract signed between a music industry professional and a band/artist.
It may or may not involve a record label. The 360 deal is a new development in the music industry landscape.
It has become increasingly difficult for labels and artists to reach their targets from album sales which have been declining over the past decade. This type of a deal was created to give both a chance to benefit from each other, one more so than the other.
It is the most any label has even participated in an artist’s career.
The 360 deal enables a label to get a % of profits from ALL of the artist’s generated income. This includes online sales, record sales, album & merchandise, music licensing, guest appearances, live shows/tour revenue and even endorsements.
In return, the label will fund the artist’s requirement for equipment, production, marketing, touring etc. This gives artists new avenues (previously unaffordable) to explore but at the same time cuts down on their creative freedom.
The first ever 360 degree recording deal happened when (rock band) Paramore was signed onto Atlantic Records. Atlantic Records wanted in on other sources of the income they generated and were willing to put in thousands of dollars to fund the band.
Other records labels/companies followed suit shortly after and now 360 deals have become fairly popular choices, especially for the record labels.
Pros: Here’s a look at some of the possible advantages of signing such a deal -
- It ensures longevity. No one is going to sign a 360 deal for 2 months. If someone is willing to invest money in you, they will give you an album or two, a couple of years and at least a few tours to prove yourself (or to get their returns).
- Gives you more places/venues to increase your live playtime - Think Jam bands, for example, which don’t rely on singles or albums to earn their money. A lot of bands/artists have a certain live appeal of value and are great crowd pullers. These bands can get the funding they need to design tours and stages that they couldn’t otherwise afford.
- More diverse sources of income and creative expression - Back in the days, record sales was the major source of income for the label. Now, artists can sell singles, merchandise, live DVD or box sets, concert tickets and various other things to generate income.
- More funding than an artist can imagine – The 360 deal allows artists to play with setups that they couldn’t otherwise dream of. It gives them an impetus required to build their brand and influence the masses which would be impossible on their own.
Cons: The 360 degree deals have been getting flak from not just artists but from all industry professionals. This deal has also been referred to as signing your soul off to the devil because you effectively agree to give all rights and a percentage of ALL profits away.
- Cash - A label can take anything from 5% to 50% of an artist’s generated income. Contracts can be complicated and need to be thoroughly reviewed to ensure that each party understands their legal and financial commitments.
- Creative Freedom – Most critics believe that you can’t really keep creative people under your thumb without leading to a burn out or a walk out. Most artists will, sooner or later, get fed up of being told what to say, what to wear, how to speak, where to go and what to play.
- Legally Bound - A 360 contract means an artist is agreeing to the record label/company giving inputs and instructions in all creative endeavors. This includes telling you how to create your music and how to market yourself to build a commercial image. The contracts will need you to bring your lawyer so that you fully understand the terms and conditions
- Hip-Hop Artists beware - This type of a deal can eat into your revenue streams that were hitherto untouched by labels – like endorsements. For a lot of hip-hop artists, live shows aren’t much of an income stream and they rely most on album sales and endorsements for their income.
As the times are changing, so is the music scenario. New methods of interaction between an artist and the industry professionals are inevitable. The 360 deal is too young to pass any lasting judgment on it but this article has attempted to present all sides of the story.
Many famous artists including Madonna, U2 and even Jay-Z have signed 360 deals (but don’t forget that they have pull and can negotiate). Edgar Bronfman (CEO, Warner Music) announced that all artists that his label signs will be under these type of deals (a third of the existing artists already are). Embrace it or abhor it but for all you know, this could be THE future of the industry…