There’s an old saying: “There is really nothing new under the sun.” That certainly rings true to me when I think of the 360 degree deal. In its purist form, this relatively “new” breed of record deal is basically the reincarnation, cloaked in contemporary guise, of an old and rather notorious entertainment industry modus operandi that permeated the film industry in its earlier years. It entails the controlling and owning of a piece of every conceivable facet of the act’s career and sources of revenue. There has been a lot of attention given in recent years to the 360 deal, also referred to as the “multiple-rights” deal, and no little controversy surrounding it.
In broaching this topic it is instructive to make a subtle but important distinction between the terms “record label deal” and “record contract”. The former implies a deal with a label; the latter not necessarily so. This distinction is a significant consideration for today’s artist because these days just about every type of player in the music industry, and even some parties outside of it, are jumping into the fray to sign artists. Which begs the question: Why this trend?
Simple. Money…. Surprise!
A lot of business people have been waking up to the fact that music rights are a potential goldmine. And these folks understand that maximum profit is derived by way of the most efficient means of extraction, which in this industry entails having sufficient controlling rights to enable ready and profitable exploitation of any opportunity that may arise for the artist and his music.
It was Robbie Williams’ extraordinary all-inclusive £80 million deal with EMI back in 2002 that really brought this phenomenon into the spotlight. Prior to that, record deals were, by and large, record deals, with perhaps one or another revenue source thrown into the package for the benefit of the company, such as some publishing or merchandise rights. Williams’ deal gave EMI a share of pretty well every revenue stream from his career.
Such all-in deals are becoming more and more commonplace for big name acts. For artists of this ilk to agree to this kind of deal, the companies certainly have to up the ante with such things as higher advances and royalty rates. But now, more and more new artists are also being courted with 360-type record deal proposals by majors, independent labels and others like film companies, artist management firms, concert promoters, entertainment lawyers…the list goes on. Which brings us back to that important distinction I made at the beginning. The meat of the matter for the artist is whether the party proposing the deal has capabilities in all or most of the areas for which they want rights and, as I shall discuss in my next blog on this subject, “Is The 360 Deal Just A Money Grab By The Record Labels?”, what kind of mindset they bring to the table. Stay tuned….