What is a 360 Deal?
A 360 deal is a contract between a musician and a record label or music company. It’s different from a regular record deal. With a 360 deal, the music company doesn’t just make money from selling the musician’s recordings. They also get a cut of all the other ways the musician makes money from their music career.
How 360 Deals Work
Here’s the lowdown on how a 360 deal works: The music company agrees to front the cash for the musician’s needs to succeed. This means paying for the recording studio, music video shoots, tour support, and marketing and promotion. That stuff can get really pricey.
In exchange, the musician has to give the company a percentage of the money they make from all kinds of music-related stuff. We’re talking about concert ticket sales, merchandise sales, endorsement deals, appearance fees, music publishing, and even the musician’s copyright. So yeah, the company gets its fingers in many pies.
Why Music Companies Like 360 Deals
Music companies are all about the 360 deal these days. Here’s why: the music industry ain’t what it used to be. People don’t buy music like they did back in the day. Streaming has taken over and doesn’t bring in the same kind of dough as CD sales.
So, music companies had to switch things up to keep the cash flowing. With a 360 deal, they don’t just rely on record sales to make bank. They get a piece of everything the musician does that brings in money. It’s a way to hedge their bets and ensure they get paid even if folks aren’t buying albums.
What’s in it for the musician?
You might be thinking, “What’s in it for the musician? It sounds like they’re getting hosed!” Well, it’s not all bad news, bears. There are perks to signing a 360 deal, especially for musicians just starting out.
For one thing, the music company is taking on more risk by fronting all that cash for the musician’s career. That means the musician doesn’t have to go into debt to pay for studio time, music videos, tour buses, and all that jazz. The company is investing in the musician’s success, so they will work hard to ensure the musician blows up.
Plus, a 360 deal can give musicians access to resources and connections they might not have otherwise. The music company has a team that will help the musician with marketing, promotion, booking gigs, and more. That can be a real leg up for a newbie in the industry.
The Downside of 360 Deals
Giving Up Control
There’s a flip side to all those perks, though. When a musician signs a 360 deal, they’re giving up a lot of control over their career. The music company has a say in all decisions, from what songs get released to where the musician performs.
For some musicians, that loss of control is a dealbreaker. They want to call the shots and do things their way, even if it means hustling harder and paying their way.
Lower Royalty Rates
Another thing to remember about 360 deals is that the musician usually gets a lower royalty rate on record sales. Since the company is getting a cut of all the other income streams, it’s not as worried about making a profit on album sales alone. So, the musician might only get a small percentage of each album sold.
Long-Term Commitment
Three hundred sixty deals also tend to be long-term commitments. We’re talking multi-year, multi-album contracts. That means the musician is tied to the company for a long while. If things go sour, getting out of the deal can be tough.
And if the musician hits it big? The company will be raking in the dough for years, even if the musician wants to move on to greener pastures.
Sharing the Wealth
Finally, the musician has to share the wealth with the company. Remember all those different income streams we talked about? The musician only gets to keep a portion of that cash. The rest goes into the company’s coffers.
For some musicians, that’s a bitter pill to swallow. They’re the ones out there busting their hump on stage every night, but the company gets a cut just for fronting some cash at the beginning. It can feel like the musician is working hard to line someone else’s pockets.
The Bottom Line on 360 Deals
At the end of the day, whether a 360 deal is a good move depends on the musician and their situation. For some, the upfront investment and support from the company is worth giving up some control and a chunk of their income. For others, the trade-offs are just too big a price to pay.
Pros
- The company invests in the musician’s career upfront
- The musician gets access to resources and connections
- The company is motivated to help musicians succeed
Cons
- The musician gives up control over their career decisions
- The musician gets a lower royalty rate on record sales
- The contract is a long-term commitment
- The musician has to share income with the company
What to Consider
If you’re a musician thinking about signing a 360 deal, here are some things to keep in mind:
- Read the fine print and make sure you understand what you’re getting into
- Think about your long-term goals and whether the deal aligns with them
- Consider whether you’re comfortable giving up some control over your career
- Look at the royalty rates and think about whether they’re fair
- Make sure you have a good lawyer who can negotiate on your behalf
The Future of 360 Deals
360 deals have been around for a while, but the music industry is always changing. As streaming becomes more dominant and new technologies emerge, the way musicians and music companies work together might evolve.
New Revenue Streams
One thing to keep an eye on is new revenue streams for musicians. Things like NFTs, virtual concerts, and direct fan engagement could create new opportunities for musicians to make money outside traditional channels. If those new streams take off, it could change the calculus on 360 deals.
Changing Power Dynamics
There’s also the question of power dynamics between musicians and music companies. As more musicians find success independently through social media and online platforms, they might have more leverage in negotiations.
Conversely, consolidation in the music industry could mean that a handful of big companies have even more power. If that happens, 360 deals could become even more prevalent as musicians have fewer options.
Alternative Models
Finally, there’s the possibility of new models altogether. Some folks in the industry are exploring revenue-sharing deals, where the musician and the company split the profits more evenly. Others are looking at ways to use blockchain technology to create more transparent and fair contracts.
Only time will tell how things shake out. But one thing’s for sure: the music industry is always evolving, and musicians and music companies will keep looking for new ways to work together and make that sweet, sweet music.
