360 deals are, whether you like it or not probably going to be the future of the music industry, or at least record labels, and honestly, I’m still unsure whether or not that’s a good thing. A 360 deal is when the record label gets a cut not just of the CD sales, but also merchandise, and sometimes even booking. As far as I can tell, this is pretty much the standard for major labels, sometimes even extending into the artists personal earnings as a way to get a cut from endorsements or public appearances that the artist might have hanks to their position as an artist on a major label. I know that to some of you punk guys this makes a lot of sense, but if you step back and really think about it and what it means then it starts to make sense. Many of these labels are putting millions of dollars into big name artists, and they need those artists to fund other projects they might want to develop. The fact is, major labels are just trying to grow the scene too.
Obviously a 360 deal has a lot of advantages for the label. It means that they get more money off of their clients and also creates a bit more dependency from the artist on the label. It means that they can get them nice and locked in and keep the artist to themselves to develop. After all, the big problem a lot of these labels face is that the artists either go out of their way to screw them over to make more money for themselves or that run off to a more enticing label offer. It means that the record label is in a position to be the complete dispenser of everything the artist could need, odds are they will even go so far as to get the artist a producer and manager of their choosing and sometimes even back charge them for that on top of the actual fees those people request. Major labels aren’t necessarily evil, but they definitely have a lot of pressure on them which can cause them to do weird things and make poor choices every now and then.
Now record label people will tell you this comes from a place of care, and many of them probably feel that way. After all – they need to replace the lost revenue from the early 2000s crash of the industry somehow. It was that lost revenue that used to allow the labels to take gambles on new acts and help scenes to grow. They aren’t sitting there with their thumbs up their asses wondering why people aren’t buying CD’s anymore – they are well past that. Rather they are trying to figure out how to find more revenue in order to invest in new artists. They want to regain that monopoly they used to have, but after all the sketchiness of the aughties it seems unlikely that anyone is willing to trust them, most new bands place more faith in the new model of the music industry rather than any old fashioned broken ideas that frankly never really worked that well in the first place. So they aren’t so much trying to rebuild an old broken system as they are trying to craft an exciting new one.
From the artists perspective the 360 deal can be both a good and a bad thing. On the one hand it’s helpful because it means you can recoup easier. It also means that a label is going to be a little more willing to invest money in you because they know that they can count on a variety of revenue streams rather than just CD sales. It makes sense, most bands don’t even focus on CD sales that much anymore, it’s gotten kind of pointless from their perspective, they don’t sell hat well and are mostly just an excuse to tour. It also makes sense for artists because odds are the labels that have set up 360 deals are going to get merch for cheaper than the artist could and are going to be able to give more advice about what a band should be featuring on its merch stand. Simply put – it puts you both in a position to have a much higher gross income. Of course, as the astute reader will have noticed, the term ‘gross’ was the key word in that last sentence.
As is with most indie labels, 360 deals are a far off almost forgotten notion. For artists on indie labels, having control of their merch sales is how they make money. Beyond that many artists buy stuff wholesale from their label and sell it while out on the road – another key moneymaking tactic. Yet in 2016 some 360 deals are so intrusive they even try to tax this all important tour income. Suddenly, if you’re an indie artist with a limited outreach and fifty grand in debt to the label then you are going to start running into some very real issues. You’re going to find yourself choking out under crippling debt. Then if you somehow make the money back you’re still going to b stuck making a fifth of wha you might otherwise, if you’re lucky. Now, this can be fine if you got a huge advance to pay out all your people and are getting massive label support throughout your career, but I think you can also see how it could get out of hand fast.
So – in the end, I guess I’m just pretty ambivalent with regards to 360 deals. While I definitely get where the label is coming form I think that artists should be hesitant when signing them and get a whole slew of things guaranteed to them in writing beforehand. I think hat they can represent a great moneymaking opportunity for all involved, but also suggest a bleak future where we return to the monopolies of major labels, a notion I’m not sure I’m very comfortable with. As with all things in this crazy old industry of ours, we’ll have to see how it plays out, it could be very very good or, more likely, very very bad.
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