360 Deals Are Today’s “Record Deals” By, Wendy Day from Rap Coalition (www.WendyDay.com)

I gotta state right upfront that I am biased against 360 Deals.  I understand WHY they exist, I just find them unfairly oppressive in the label’s favor in an industry with a draconic history of jerking artists out of money.  I stopped negotiating deals for artists in 2005 because I refuse to do a 360 Deal for any artist!  How strongly do you have to hate something to stop your own income over it? 

In the early 2000s, the music industry went through a severe change.  Music sales plummeted, the importance of the internet reigned supreme, and there was an influx of artists into the industry causing an over saturation never seen before.  It’s gotten worse, not better, for the major record labels.

Once used to a healthy profit margin that afforded grand lifestyles for those at the top of the food chain, the major labels became disgruntled as sales dropped while they missed the boat on less profitable digital sales.  Taking on the role of dinosaurs fighting for survival, they tried everything from stopping the new digital revolution, to fighting it, to suing it, to band wagon jumping too late.  Nothing worked for them.  And they still haven’t learned from their mistakes—they still continue to fight the ways the consumers want to receive their music.  

So to justify their continuing existence, they decided to take an even larger share of the pie from the ONLY aspect of the equation that they controlled—the artist (or the “content” provided for digital download).  Back in the day, labels took roughly 87% of the pie while giving the artists 12% of the money AFTER the artist paid back everything spent on them from that 12% share.  This means that if the artist sold $500,000 worth of CDs, and it cost $50,000 to market and promote that CD (a very low example), the artist share of $60,000 (12% of $500k) would be divided between paying the label back that $50,000 and a check for the remaining $10,000.  The label would receive $490,000 for its investment and belief in that artist while the artist made $10,000.  In exchange for giving up the lion’s share of the sales, the labels always told the artists that they’d make 100% of the touring.  Any show money, was the artist’s to keep! 

When the s**thit the fan financially for the labels, they decided to tap into the show money, and all other streams of income for the artists, as well……. continue reading here