A 360 deal is a contract that allows record labels to receive a percentage of the earnings of an artist revenues instead of record sales. A 360 deal is also called “multiple rights deal,” record labels are now able to get a percentage of everything they wouldn’t normally ask for, like ringtones, concert revenue, endorsement deals and merchandise sales.
Artists will share revenues with record labels from different sources under a 360 deal involving a young artist with a major record label. A 360 deal normally works in this order. For publishing, a young artist would get nine cents for writing his music, plus more cash if a tune is in a movie or used on television. After expenses for rental equipment and fuel, the record label gets approximately ten percent for touring. The record label also gets an additional ten percent for merchandising: and not just merchandising. The label gets income from everything: such as corporate sponsorship to artist-run clothing. A young artist or band gets usually about ten to fifteen percent of the wholesale price of a CD or $1.50 to $1.75 per record.
Artists will share revenues with record labels from different sources under a 360 deal involving a young artist with a major record label. A 360 deal normally works in this order. For publishing, a young artist would get nine cents for writing his music, plus more cash if a tune is in a movie or used on television. After expenses for rental equipment and fuel, the record label gets approximately ten percent for touring. The record label also gets an additional ten percent for merchandising: and not just merchandising. The label gets income from everything: such as corporate sponsorship to artist-run clothing. A young artist or band gets usually about ten to fifteen percent of the wholesale price of a CD or $1.50 to $1.75 per record.
“Jay-Z, right, is going back to the executive suite. The rap star, whose real name is Shawn Carter, has founded a new record label with Stargate, a team of two Norwegian songwriters and producers in New York who have scored big hits with Beyonce, Rihanna and others. The new venture, called StarRoc, will be based at Jay-Z's Roc the Mic recording studio in Manhattan and will develop new talent through ''360 deals,'' umbrella contracts covering various aspects of an artist's output, according to representatives of both parties. StarRoc, which is also to include a music publishing entity, is a 50-50 partnership between the two members of Stargate -- Tor Erik Hermansen and Mikkel S. Eriksen -- and Roc Nation, Jay-Z's entertainment start-up. Rock Nation is financed by the music giant Live Nation through a multiple-rights contract the company signed with Jay-Z this spring for a reported $150 million. Last year Jay-Z stepped down after three years as president of Def Jam Recordings, his longtime label, to which he owes one more album.”
This type of deal seems to be what’s necessary in the industry today. Needless to say that I currently manage three artists which two of them were offered a 360 deal in 2009 and 2010, but they both denied it. "Half of all music sold in the US will be digital in 2011 and sales of digitally downloaded music will surpass physical CD sales in 2012, according to Forrester Research report, “The End Of The Music Industry As We Know It.” Unless that changes, I don’t see record labels changing their minds anytime soon about a 360 deal. Like it or not, a 360 deal is very much mandatory. The industry is hoping the 360 concept will evolve into a relationship that mutually benefit all those parties involved. "Oballa advises that any artist or band get legal representation to look at the deal when an offer is on the table. "Right now, the problem with the 360 deal, on the artist side, is they're still giving up everything they gave up before, plus more." Oballa notes that it is important for an artist signing a 360 deal to understand how long the 360 portions will last and whether or not the label wants exclusive rights in all facets of the band's activities."
A 360 deal is a contract that allows major record labels to receive a percentage of the earnings of an artist’s revenues instead of record sales. A 360 deal is also called “multiple rights deal,” record labels are now able to get a percentage of everything they wouldn’t normally ask for, like ringtones, concert revenue, endorsement deals and merchandise sales.
References
Inside a 360-Degree Deal. (2007). Rolling Stone, (1040), 14.
Leach, C. (2010). Making Your Way Around The 360 DEAL. Canadian Musician, 32(5), 10-11.
Mitsopulos, S. A. (2008). 360-Degree Deals. Canadian Musician, 30(3), 62.
SISARIO, B. (2008, September 20). Jay-Z Starts New Label. New York Times. p. 8.
SISARIO, B. (2008, September 20). Jay-Z Starts New Label. New York Times. p. 8.
http://www.marketingcharts.com/radio/forrester-end-of-music-industry-as-we-know-it-3568/
http://musicians.about.com/od/ah/g/360deals.htm
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