Dec
26
What is a 360 Record Deal?
Filed Under Record Turntable
Quite simply, a so-called “360 deal” in the music business refers to the recent modern practice of record companies brokering deals with artists that are “all encompassing” in terms of revenue streams. Live Nation’s signings of Madonna and Jay-Z are high-profile 360 deals…the long-term success of which remains to be seen.
Tennessee’s young band Paramore, fronted by Hayley Williams, have stated their “360″ deal has helped them develop as a group.
Still, the practice is novel and barely tested.
Traditionally, record companies were in the business of selling records (including all formats such as vinyl, tape, and CD). The CD (Compact Disc) was the most profitable for the labels as they are the cheapest to produce (compared to vinyl or tape) and, for the first few years of CDs at least, brought a retail price as high as $20 or more! That enormous profit margin (we now know that a blank CD costs just pennies!) provided record executives with the glut, the excessive lifestyles and the fame which from the mid-sixties to around year 2000 was synonymous with the “Music Biz.”
But the glut is over. CD sales are on a downward spiral that many think won’t stop until virtually no CDs are sold through traditional retail outlets. Big established record chains, including Tower Records, have quit. Those massive traditional record profits are gone.
This fact of life has forced the enterprising record labels to try to get a piece of all the ancillary action surrounding a hit recording act: publishing, concert receipts, merchandise sales (which can be huge) and other related artist revenue sources. Thus the name “360″…as in the whole pie.
By: DA Jack Hayford
Tennessee’s young band Paramore, fronted by Hayley Williams, have stated their “360″ deal has helped them develop as a group.
Still, the practice is novel and barely tested.
Traditionally, record companies were in the business of selling records (including all formats such as vinyl, tape, and CD). The CD (Compact Disc) was the most profitable for the labels as they are the cheapest to produce (compared to vinyl or tape) and, for the first few years of CDs at least, brought a retail price as high as $20 or more! That enormous profit margin (we now know that a blank CD costs just pennies!) provided record executives with the glut, the excessive lifestyles and the fame which from the mid-sixties to around year 2000 was synonymous with the “Music Biz.”
But the glut is over. CD sales are on a downward spiral that many think won’t stop until virtually no CDs are sold through traditional retail outlets. Big established record chains, including Tower Records, have quit. Those massive traditional record profits are gone.
This fact of life has forced the enterprising record labels to try to get a piece of all the ancillary action surrounding a hit recording act: publishing, concert receipts, merchandise sales (which can be huge) and other related artist revenue sources. Thus the name “360″…as in the whole pie.
By: DA Jack Hayford
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