360 Steals?

In the rapidly changing world of the music industry, old business models are being thrown out the door and new models are being introduced almost as quickly as “the next big thing” is signed. The method of seeing what works in the industry seems to be just about the same as how they figure out what band to get behind next; throwing ideas against the wall and seeing what sticks. One of the newer methods of signing bands that has been gaining popularity is what’s known as the “360 deal.” Where the labels traditionally made their money solely off of dessert, they are now taking bites of the meat, potatoes, and string beans. But the question is, are these new 360 deals justified?

When an artist traditionally signed a major label record deal, the label would receive most of its profits from album sales. But with CD sales on the rapid decline, and digital sales not high enough to compensate for that loss, the labels have scrambled to find new sources of revenue. So instead of receiving all profits only from album sales (since most artists don’t sell enough albums to recoup their debt), they are reaching into other areas where the artists originally made most of their profits from: touring, merchandising, publishing, and even outside endeavors such as endorsements, acting, and modeling.

The industry seems to be split on whether or not 360 deals are actually more effective and profitable, for the artist and for the label, than the way deals have previously worked. Many say that it will take a few years of seeing this model in action before being able to reach a conclusion. Some say that it goes back to the way labels used to work with their bands, encouraging artist development instead of dropping the band as a priority if they fail to show large enough numbers or appear high enough on the charts with their first single. Others say it is the greed of the major labels extending even further into the artist’s revenue stream and making it harder for them to earn a living, while not offering enough knowledge or support in these new endeavors they’re starting to undertake.