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Heather McDonald

360 Deals

By April 5, 2008

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With news this week that Jay-Z is very close to following in the footsteps of Madonna and U2 and signing a deal with Live Nation brings the issue of 360 deals to the forefront again. In Jay-Z's case, Live Nation have reportedly offered $150 million for a ten year venture in which they get a piece of virtually everything Jay-Z touches, from putting out his records to earning a percentage from his clothing line. Major labels have embraced these kinds of deals and following the lead of Live Nation in trying to get their artists signed up to contracts that reach much further than recorded music.

But is it fair? Major labels have suffered a substantial drop in CD sales, and the story goes that music fans no longer want to pay for recorded music, but they are willing to pay for concert tickets and merchandise. With a 360 deal, a label can tap into that the money that band earns from playing shows and selling t-shirts. In exchange, (so the story goes) the label will work with the band on their overall career, trying to drum up opportunities beyond album sales. The labels say that this actually lets them devote more time to developing an artist, because they don't have to go all out chasing big sales front the start to try and recoup their investment. If they have more ways to make their money back, then they can take a slow and steady approach to building a band and give the band more space and time to become a success before getting dropped. There is even a hint that less commercial bands could find major label homes under these deals.

I'm unconvinced. It's one thing for Jay-Z or Madonna to sign huge deals ($150 million? Really?) - the balance of power is in their favor. A band with slightly less pull than these two is essentially signing away all of their rights and everything of value that gives them any leverage. There is a huge incentive for labels to turn the bands into brands instead of musicians and use their image to sell everything from pillowcases to hygenie products (hello, High School Musical toothbrush line). These deals aren't about selling music - they're about selling anything - literally anything - that will make some money.

By the way, Live Nation and Jay-Z, meet Robbie Williams and EMI, early pioneers of the 360 deal. In 2002, EMI signed Williams to an 80 million GPB contract that gave them a stake in his entire career. Six years and a few musical flops later, Williams is trying to pull out of his deal.

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Comments
April 10, 2008 at 1:49 am
(1) Omar Foshizzi says:

360 deals are good for proactive artists who have extended into more than one business and have recorded a catalog of music. I could see 360 buried as an option in contracts to new artists, just in case they blow-up….WhoopTonez – West West and WhoopWoop!

March 9, 2009 at 5:27 pm
(2) Lorrenn says:

I keep on seeing people say that these deals are good for “proactive” artists. Well, these deals are no good for ANY artist.

Jay-Z is a proactive artist. Has he needed Def Jam to help his sell blue jeans or vodka or anything outside of music? NO! He has a small team of folks assigned to each business vertical, which is what any “proactive” artist can do, once they’ve inserted themselves into any given vertical.

If you sell records, Madison Avenue will find you. They don’t need the music labels to tell them that you’re available for endorsements, et al. This is just another desperate attempt at institutionalized rape.

July 31, 2009 at 1:25 pm
(3) Carrington says:

But Def Jam gave him the platform for his BRAND to evolve. As an unknown artist what “business vertical” are you supposed to “insert” yourself into? 360 deals, on a smaller level can allow an act who isnt suited for mainstream radio to build up a fanbase while continuing to develop their sound, and be able to support themsleves financially in the meantime. What you may not realize is that there are hoards of extremely talented artists whose music is never bought in high volume simply because they dont have the means to get it into the hands of their potential fanbase. I agree that signing ALL of your rights over and signing to a 360 deal is a risk for an artist, but I also think there are ways 360 deals can be a beneficial relationship for both the artist and the music company. The logisitcs of the deal dont have to be so cut and dry, there are ways to satisfy everyone. Not every label is greedy and out to suck the blood of artists (HUGE stereotype)

March 11, 2010 at 8:55 am
(4) Dean says:

360 is BS – The label should only be allowed to share profits on things they create and promote. If they can book a real tour, then they can share in the money acting as an alternative to the agent. No way you should ever have to pay an agent AND another party from tour dates.

May 1, 2010 at 10:42 pm
(5) BLACKSHEEP says:

Ask me if some label comes to me and offer me this 360 deal if I wouldn’t take it…what ever you think I believe that the artist can deal his way to this 360 deal contract..
I would take it if put in front of me. Labels are trying to get money and Artist are trying to get paid as well Unknown Artist are trying to get notice..I can sigh a 2 year deal and renegotiate my contract after. You just have to be smart about it… For an artist eating bread and drink water with the 360 deal I believe he will have the choice of bread and drink stop been stupid and just go with it just use what GOD gave you a BRAIN

May 14, 2012 at 8:18 pm
(6) JayH says:

I Agree with what Panos Panay, CEO of online music platform Sonicbids, has said: ” Thereís two things we know about creativity: you canít force it and you canít really control it.”

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