360 Deals Are the Salvation of the Music Industry

For the record, I honestly believe that the industry s heading toward a state where ALL of it’s contracts with artists are “360 deals”, meaning the labels would share in all of of the profits from it’s artists, including merchandise, touring, etc.

I think this is a viable solution. Honestly, it’s how Red Zone Records works – ALL of our artists, including myself, are signed to this kind of deal. There are multiple variations of this deal of course. Our label takes 70% of music sales, and gives the artist 30%, while for merch sales and live shows the percentage is reversed. The label takes 30%, and gives the artist 30%.

Like any other new business model, the 360 deal does have it’s opposition. for example, artist’s managers are worried about feeling “left out in the cold”, since all or most of their money comes from artists live performance and merch sales. Some of the largest artists don’t want to give up a larger share of their merch and concert money, and some of the labels don’t want to give up a larger cut of the music sale dollars. I think these are minor speed bumps at worst. In this age of diminished music sales, all parties are going to have to come together to find a sensible way to stay in business. The old models just aren’t working any more.

Ultimately, I think that 360 deals are the salvation of the industry (Madonna and Motley Crue have both moved to 360 deals, and in Hip-Hop, Jay-Z agrees with the concept as wellSo does Diddy). It means that Labels of the future will be true partners with their artists, since it would behoove them to make sure that the artists are successful in their various endeavors, if for no other reason than to protect their OWN bottom line.

Since starting my label, I have held the belief that major labels are little more than a source of venture capital. The independent labels will be the ones to inject creative marketing solutions and notable talent into the marketplace. The majors should invest in these labels, sit back, and watch the money roll in. It would be better for the industry as a whole!

2 Responses to “360 Deals Are the Salvation of the Music Industry”

  1. June 16, 2008 at 10:56 pm

    I agree that it’s important a label should be a partner with its artists, but I don’t believe that a 360 deal is the best way to do it. Sure, it guarantees the label cares because there bottom line is affected all over the place, but this doesn’t necessarily foster an artistic partnership that’s best for the artist. This basically allows label to weigh in anywhere they want and dictate the terms of whats going in order to make them the most money. Granted, I am thinking of the majors when I’m talking about that. The indis are way better, but I am still dubious of a label dipping into every pocket that I have.

    In your 360 deal, the label gets a cut of tour/merch. Does it provide tour support? Does it pay for the making of the merch?

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