360 Deals

It seems lately that the music industry is suffering badly. Record sales have decreased over the last couple of years due to many factors. The RIAA claims that this is due to the increase in piracy from peer to peer file-sharing websites. Some believe it’s due to the lack of creative content and the ability to download only singles versus the entire album. Record companies have had to make cuts because they are no longer generating the revenue to support their artist. So what will it take to revive the music industry? Well some conglomerates have come to the rescue with a new offer to artist called a 360 deal. So what is a 360 deal? A 360 deal is a contract between the artist and the record label/investor that will allow the label/investor to recoup its expenses through more than just album sales. Labels/investors spend more money on marketing and artist benefit from the exposure.

Some major artist was the first to take advantage of the deals such as, Jay-Z, U2, Nickel back, and Madonna. Jay-Z signed a $150 million dollar deal with Live Nation, which entitles them to partnership with his other business ventures. Live Nation is a concert promoting company that is in partnership with at least 3 major labels. This gives them ability to schedule and control the concerts that the major artist will perform at. But not all are comfortable with these 360 deals; many artists say that they would rather remain independent than to give up rights to their publishing, profits from performances, and merchandise. I personally feel that this is another ploy for record companies to exploit the situation. This will give them the ability to generate more revenue from artist without having to incur more expenses. Many labels hardly promote artist as it is and have cut the artist development departments. So now it just seems that they have developed a win-win situation. My advice is with the rise of social networking artist should just stay independent.