Thursday, August 31, 2017

The 360 Deal

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The 360 deal is nothing new. The first reported 360 deal was English recording star Robbie Williams’ deal with EMI in 2002. In the last few years 360 deals have become common place. New artists signing with a major label or their affiliates can expect it as a matter of course. The reason for the prevalence of the 360 deal is the dramatic decline in income from sales of recorded music. Income from sales of pre-recorded music reached its peak in 1999 at approximately 14.5 billion dollars. By 2012 that amount had shrunk to only approximately $7 billion - a decline of more than 50%, mainly due in part by the rise of the Internet. Under the traditional paradigm, the label would pay the artist a small royalty, which was even smaller after all the deductions. The artist could expect to receive no recording royalty at all unless his album was a major commercial success. But he got to keep everything else: publishing, merchandise, touring, endorsements, etc. However, these days artists often generate more money from other activities than record sales. For instance, Lady Gaga’s Monster Ball Tour grossed over $227 million dollars, and 50 Cent’s deal with Vitamin Water turned golden when he accepted shares in the company in exchange for authorizing the use of his professional name in “Formula 50”. It is reported that his shares were worth over $100 million after Coca-Cola purchased Vitamin Water’s parent, GlacĂ©au, for $4.1 billion. These developments have spurred the labels to seek to participate in all the possible revenue streams generated by an artist. I have seen small labels also known as production companies get in on the act and insist that new artists sign 360 deals with them even if they put little or no money into recording and make no promises in regard to marketing or promotion. These companies expect the artist to provide fully mastered recordings for little or no money upfront, and they demand income from all sources of revenue. This is an excerpt from Chapter 6: Contracts and 360 Deals from my book "How To Make It In The Music Business: Using Social Media Marketing To Build A Large Following" for Music Business advice which will help you succeed!

"How To Make It In The Music Business: Using Social Media Marketing To Build A Large Following" Written by Ousala Aleem Published by Prestley Snipes LLC. Purchase your copy today.