You’ve probably heard your favourite musical artist complain about a deal, specifically a 360 deal, at some point in their career. For those who don’t know, a 360 deal in the music industry is a contractual agreement that allows a record label to collect a percentage of all streams of revenue generated by the signed artist (s). Not only will your streams be affected, but digital sales, touring, merchandise, publishing, endorsement deals and if you’re unlucky, a lung. I was just joking about the last part.
Nowadays, with the help of social media and the internet, labels are not generating as much revenue due to artists not needing them as much and having the option to go independent. Labels are seeing a decline in physical sales (CD & etc). In order to survive in the streaming world, labels will insist on taking a piece of all revenue streams, hinting at the 360 reference.
The record label’s reasoning for taking these percentages is for financial support into helping the artist reach stardom. Due to their investment, these artists can create income from touring, merchandise, endorsements, etc.
Whether you want to be signed to a major or independent label, the art of 360 deals is not going anywhere. The problem with 360 deals is that affect musicians in the long run. There are a bunch of artists, that don’t own the masters of their music. Once an artist is out of the deal, without the copyright to the music,, they will not be able to redistribute the music.
Labels will offer a large advance but will recoup royalties earned. Unless you’re in it for the short term, 360 deals aren’t worth it, especially if you want to own your music. It’s important if you want to be a part of a major label roster to bring leverage so you get the best possible deal.