Today another hot topic is the 360 deal, a current alternative to the traditional and outdated recording deals or contracts. While it’s mostly perceived as a bad idea since most assume it was created to screw artists over. But trust me, that’s not the case, as the application and terms of the contract vary. So, if the deal is monitored and structured relatively, both the record company and the artist gain profit. As a veteran rapper (Keldamuzik), I am here to give you the full details on a 360 deal and its Benefit.
A 360 Deal
But first, what’s a 360 deal? A 360 deal is an alternative to traditional record contracts. It’s a business contract between artists of any kind and a music company. The deal comprises the company agreeing to provide financial and other support for the artist. In turn, the artist accepts to give the company a planned percentage from any revenue the artists earn through. Revenues like digital sales, placement royalties, endorsement deals, and merchandise sales.
A deal developed in the 21st century as an alternative to the traditional recording contract in which the artist usually had complete control over personal revenue streams. But in the 360 deal, also known as the multi rights, a company agrees to provide full support to an artist upfront to more extraordinary lengths than the regular support covered by a traditional recording contract, with a condition of receiving a percentage from all the source of the revenue made by the artist.
In the past, the traditional recording deal did not offer a share of any income other than the revenues from record sales and other forms, which include the recording to the recording company. This gave a massive chance to famous artists to make a comfortable income from their performance, royalties, talents, and tours or concerts. Then artists limited the recording company’s access to those revenues until the advent of the 360 deal.
Unlike the traditional deal in which the recording label pays the artist an advance for recording a piece of music or an album, the artist is required to repay the advance with interest from their successive income from the album. In the multi-rights deal, if the artist doesn’t earn enough royalties from one album, record labels may use royalties earned from other sources like other successful albums to repay the advance of previous albums.
The 360 deal was created in the early 2000s as a response to the significant drop in album sales due to the advent of technology. The decline in album sales was placed to the emergence of the digital music age and made the profit margins for the recording label and artist decline progressively.
The 360 deal has become common within major recording labels’ contracts because recorded music sales and profits aren’t as robust as before. This doesn’t mean that people don’t enjoy or spend on music as they used to; it’s just that people don’t purchase records and CDs the way they used to.
The Pros of a 360 Deal.
Though the characteristics and benefits of the deal for the record label are known, how does it benefit an artist?
Let me get you through that quickly.
- Financial Support.
- The recording label provides more commitment to promoting and developing your interests
- Rising artists get opportunities to collaborate with professionals.
- Gives artists more time to concentrate on their talent and creativity
- Proven in increasing revenue streams.
- Investment in revenue stream on the artist’s behalf.
Cons of a 360 deal
Due to the low success rate of emerging artists, most labels take drastic actions to ensure they get something in return for taking the risk. This is where the controversy around 360 deals arise. The debate about them wrecks artists’ careers in the long run. Below are a few cons of a 360 deal
- The upcoming artist mostly lose the copyright of their music
- The record labels take a percentage share of every income.
- Artists have to give up creative control over how their music is produced and how it sounds.
In conclusion, is a 360 Deal Good or Bad?
Though there are many advantages for an artist in signing a 360 deal with a record label, there’s still the issue of the record label earning from all their sources of income. While most record labels request 10-25 per cent of the artist’s income other than record sales, artists should negotiate the deal properly. Lawyers can arrange 360 contracts to fit the interests of the artist and the record label. So, my advice will be to see an experienced entertainment lawyer to tailor the contract appropriately, Cheers on signing the contract.
You can also check my recent thoughts on the impact of female rappers here.