"I Want It All: 360 Deals"
Well I know this article is very late, blame it on me getting ready for the hip-hop weekend events and my last two very busy weeks at work. This week I want to talk about a topic that many of you like to inquire about or are so excited that someone has offered you this type of deal: a "360 Deal" or Multiple Rights Deals. What is it? When we speak in laymans terms about doing a 360, we think about doing a full circle, a complete change or a complete turn. When it comes to a 360 Record Deal we are referring to a label getting their hands on or a piece of everything that you do, including, but by no means only the following: album sales, digital downloads, ringtones, touring, concerts, merchandising sales, songwriting, movie pictures... anything with your name or brand on it.
So, the artist may ask, "Why does the record company want a piece of everything I do?" Well the record company's position is that they are taking a risk by investing in you. If it wasn't for the money that they were giving you or putting into you to build your career, you may not be able to land the other roles. They have helped you develop that brand. Because of the money they have invested in you and your brand, you are able to work with the best producers, sell-out stadiums for concerts and sell anything your brand touches. Another point of the label is that album sales are continuously declining, while digital sales increase. Record companies cannot just depend on album sales to bring in revenue. Think about it, when you buy a CD from Target or Walmart, customers are buying an entire album at a high price, but when consumers download music from the internet, they normally download a single track or a few tracks for a much lower price. We are in the age of digital downloads and downloads alone will not help sustain the record companies.
In exchange for all these rights, a label may be more likely to give you more money in your advance, in hopes that they will regain back their investment. With these types of deals in mind...labels look to sign Artists who will make them money in all of the areas that their 360 deal covers. Is this Artist/Band going to be commercial? Are companies going to want to use this Artist to promote their products? Is this Artist so controversial that no one will buy his/her music nor anything else he/she sells? Can this artist sell out a stadium? These are just a few of the questions that may run through a label exec's head when looking to sign an artist to a 360 deal. 360 Deals open the door to more money that Artist have to pay out to third parties (record label, agent, manager), which in turns makes their take-home percentage even less than before. It is true that 360 deals may only be better deals for artists who actually gain popularity, have long careers and produce a large revenue versus those who may not. Now, it doesn't matter if you agree or disagree with the record company's argument for wanting 360 rights, if you want to be a part of a major label that wants these rights you must sign that dotted line...it's more of a take it or leave it scenario and let your lawyer negotiate the specifics and a better advance.
Written by: LaQuita R. Stokes, Attorney at Law of Corbin Johnson, PLLC
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