Who Benefits Most From 360 Deals?


So...what is a 360 deal anyway? Why do we keep hearing about them? And should you sign to one?

As the music industry continues to evolve, record companies and artists alike are trying to find different streams of revenue.  Consumers aren’t buying records like they used to, so artists have to do more than just make music.  They must be successful at selling out concerts; merchandise, endorsements and appearing on TV and film are some examples.  Record labels and other music industry companies have taken advantage of a new deal that capitalizes on some of this extended revenue.  The 360 deal involves the record company with all of these different types of income.  

Right away, it looks like the record company will benefit most from this type of arrangement.  This deal allows the label to receive income from almost everything an artist is involved in.  Labels explain that this motivates them to spend more time developing an artist.  They can a take slower approach to recouping on their investment.  Record companies believe that they can give artists more time to be successful before they have the potential to be dropped.  This is how a record label might entice new talent into these 360 deals.

Now this type of deal can (slightly...maybe...) also benefit the artist because there is less pressure to perform high record sales right out of the gate.  The record label will have other avenues of income and will spend time developing a career for these 360 deal artists.  This sounds good to new artists who are just hungry to sign a deal. But those same artists could lose out on a lot of income because they aren’t largely successful at first.  Labels will be more interested in making artists a brand rather than creating good music.  Which interferes with the art most new artists want to make. 

So while these deals aren't great for new artists, some more established artists aren't shying away from signing 360 deals.  Veteran artists have already established a brand and can pretty much guarantee commercial success.  As Jay-Z is an artist, he believes he is an artist-friendly executive.  He explains, “you can’t take someone’s rights, profess to be an expert in that field and then not do anything for it. If you’re sharing and partnering with an artist, you better build an artist.  We can’t — as record executives — expect to take someone’s rights and not add value. If we’re adding value, it’s a partnership. If we’re not, then we’re just trying to find another way to make up for the money being lost on the Internet. And that’s not cool.”