Throughout the first decade of the 21st Century, we started hearing a lot about this contract known as a 360 deal. But exactly what is a 360 Record Contract? And importantly, how does it benefit (or not benefit) artists?
How the 360 Record Deal Originated
Throughout the first part of the last decade, record sales began a steep decline, which left labels scrambling to find a way to continue to make money. By the last half of the decade, many artists were only making money on aspects unrelated to record sales, particularly from touring and merchandise sales.
In traditional record contracts, labels typically have no stake in an artist’s touring proceeds. But seeing a chance to make up for the lack of record sales, labels began introducing 360 deals to claim a larger share of an artist’s income.
What is a 360 Record Deal?
Like all contracts, a 360 deal will vary from label to label and artist to artist. But essentially, the contract grants the label more control over the artist, and entitles the label to more of the artist’s income from sources other than record sales.
In return for this, the label typically agrees to invest more money into all aspects of the artist’s career (including touring and merchandise), as well as to offer more promotion since there is more investment to recoup.
Do the Contracts Work?
It depends. While that answer is vague, the truth is the success of the contract will depend on many factors, including the actual amount of promotion provided by the record company, how the contract favors (or doesn’t favor) the artist, and the overall success of the artist in general.
The contracts have proven fairly effective for already established artists. Two famous examples are deals signed between Madonna and Jay-Z with Live Nation, which essentially serve as 360 deals giving the company more control over the touring careers of the artists.
But a Madonna or Jay-Z tour is almost guaranteed to be successful regardless of the record contract they’ve signed, and 360 deals can be much more risky for new artists.
Are 360 Deals Good for Artists?
Again, it depends. While the contracts can provide additional financial and promotional support, that might mean the difference between success and failure for a new artist. The deals open up even more risk than a traditional contract. In the event an artist is not successful, the label has its hands in even more aspects of the career, meaning more and more debt can easily pile up.
Whereas in a traditional contract, artists can sometimes make money touring even if an album proves unsuccessful, this is likely not the case with a 360 contract since the label will be taking money from tour revenues, as well.
In the end, it comes down to the specific contract and how well it suits you as an artist. It can’t be stressed enough that a lawyer should always be involved with these contracts to ensure the agreement is a fair as possible.
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