360 Deals and Warner
The big music story doing the rounds today is that Warner Music Group has announced that all of their future deals will be 360 deals (thanks to hypebot for the good story). I know I usually round-up the newsy kind of stuff at the weekend, but this story warrants mentioning now. One source is reporting that WMG already operates under a 360 set up with 1/3 of their artists - hypebot calls bullhorn on that one, and I agree. I would think that 1/3 of their contracts pre-date the 360 phenomenon. The real question is what this means going forward for WMG artists and major label deals in general. And the big question we should concern ourselves with - is this fair to the artist?
The big argument in favor of 360 deals is that if the label is invested and involved in all aspects of an artist's career, they can afford to take a long term view of said career instead of dumping them when the second single crashes and burns. In other words, they can develop their artists (ah, a noble concept). Of course, the labels aren't doing all of this to be nice - they want a cut of everything in exchange. Can they really bring enough to the table to justify the artists splitting more of the pie with them? Aren't the musicians already paying people to do most of this work? (Yes, they are.)
I'm in two minds about this sort of thing. I think the 360 deal has the power to be good or evil, depending on who is pulling the strings. Small indie labels often work under these kinds of deals by default, even if no one has ever called it that - anyone who has done their time at a small indie knows what it's like to be label manager/band manager/promoter/agent/distributor before noon. I think that there could be a viable business model that centralizes operations for musicians ala a 360 deal. What I am decidedly NOT a fan of is the trend for music businesses, scrambling to figure out how to remain profitable in the face of a changing industry, to dream up new ways to get a cut of the musicians' money. The old "I'm losing money, so give me more of yours" approach is not a solution. All we can do is wait and see how this plays out and how long it takes other labels to join suit.
What are your thoughts? And, need to know more about 360s? Click here.
For a developing artist, a 360 deal seems like a great way to get screwed. How much more is your advance if you sign a 360? I’m guessing here, but I doubt it’s proportional to the amount of revenue generated by each piece of the pie. More importantly, major labels are cutting back their staff so much that many are practically functioning like indies, with department lines completely blurred. Who is going to handle merch production? Ticket sales? The idea sounds nice, but I don’t see this as a quick fix for major labels. Edgar Bronfman, Jr. and the others are just feeding sound bytes to sound in control, but they don’t know how to pull it off… for that matter, does anybody?
Great point about the staff cuts, Cameron. I’m going to pull your comment out into a blog so everyone sees it.
Absolutely, this is a concise and important point. Taking more from musicians is not the answer.
When record companies take the overwhelming majority of the artists royalties, why on earth should they have the right to dip into anything and everything else too?! Where does it end with the artists losing +90% of profits on the live side, merchandise etc etc?
The more this goes on, the more independent artists will become and the more successful and mainstream independent artists and the independent scene will become.
The majors are hammering nails into their own coffins.
I think you’re absolutely right, James. These money grabs are just desperate and don’t address the underlying problems at all.