The 360 Spin-around

Are you suffering from awkward plastic lying around your house, a broken disc or even a case of the Walkman? Say no more. The music industry has come to your rescue to cure those compact disc blues.

The remedy? The music industry’s 360 contract deal.

This recent agreement has the record label making a profit off of all aspects of an artist’s revenues in order to develop a well-rounded musician. Instead of making money only from CD sales (which are almost non-existent these days), the label gets a portion of the profits from concert revenue, merchandise sales, endorsement deals, ringtones and other beneficial areas. The exchange is that the music label will work with the artist to improve their overall career by using their developed resources, like contacts and press relation officers. The major labels even go as far as to say that they have more time to promote their artists because they’re not hunting down record sales to cover their investment.

With CD sales of 2008 slumping 20% from 2007 numbers while the CD’s arch-enemy, illegal downloading, rises 32% from 2007, there is no wonder the music industry feels the need to cash in on all areas of their artists’ success.

According to an article on TechCrunch.com, Warner Music Group CEO Edgar Bronfman says that these contracts are mandatory for all new artists who sign with his label. He also went on to comment that about a third of all of his company’s signed artists are already under this kind of contract.

But there has been a lot of controversy surrounding these deals amongst artists, as well as amid music fans. Many feel that these newly signed artists are not fully ‘reaping the benefits’ from their work and become more of a product, rather than a talent. The element of choice is taken away from the artist when these deals are made since the record label often has control of over 33% of the artists’ profits.

The decrease of CD sales has also led to the music industry becoming more selective with the artists they sign to a record label. The labels need to be very careful of the artist’s they recruit as well as the hit singles they release to the fans because the industry no longer relies on CD sales to establish a accepted musician.  The success of the artist relies primarily on the artist themselves but also relies on the influence, power and opinion from the record label.

 According to a Huffington Post article, Atlantic Records was quite successful with profits from digital revenue in 2008 when compared to the labels’ physical CD profit. Popular artists from Atlantic Records, like T.I. and Jason Mraz, are some of the artists who helped to achieve this downloading success.

The record labels have also teamed up with MySpace this past year to create MySpace Music, a webpage solely dedicated to upcoming artists as well as popular musicians. The website has specific links to videos, tour dates and special contests. The webpage allows the musicians and their labels to display new talent to a wide community of music fans around the world with very little promotional effort involved.

The 360 deal is also making its way across the border into Canada. In the United States, the four major music labels have all adopted this new kind of deal but Canada has smaller, independent labels using the 360 deal for their artists. The Canadian music labels vary from their American counterparts because some staffers even stand in as promoters and artist merchandisers for their artist.

The 360 contract first got its origins in the 2000s with UK pop star Robbie Williams who was able to draw large crowds to concerts but wasn’t able to move many albums in the United States.  Eventually, major artists like Madonna and The PussyCat Dolls followed the trend which has led to their profitable success.

It seems that the remedy to the diminishing CD sales and the illegal downloading is for the record labels to make more money off their artists. Even in these hard economic times, the music industry seems to know how to make their artists’ good until the last beat.

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Sources for story

1)Arrigton, Michael. (2008) “360″ Music Deals Become Mandatory as Labels Prepare for Free Music. Retrieved February 13,2008 from  http://www.techcrunch.com/2008/11/08/360-music-deals-become-mandatory-as-labels-prepare-for-free-music/

2) Abramovitch,Susan and  Carnegie,Shelagh (2007).FOCUS ON MEDIA LAW. The Lawyers Weekly, p.1.

3)McDonald, Heather.(N.D.)360 Deals.Retrieved February 13,2008 from http://musicians.about.com/od/ah/g/360deals.htm

4)Gasparek, Brian(N.D.). The 360 Deal:Examining the modern record contract. Retreived February 6,2008 from http://www.indiscover.net/Features/Articles/the_360_deal_examining_the_modern_record_contract.

5)Sandoval, Greg (2008). MySpace Music makes its debut. Retrieved February 6,2008 from http://news.cnet.com/8301-1023_3-10050206-93.html.