Steph’s Blog

 

The Montreal 360 Spin-around

 

The compact disc has been making its way off the shelves and into the garbage’s in recent years, leaving artists and record labels scrambling for profits. A new form of record deal, called the 360 deal, has been making its way onto the scene but has garnered mixed reactions from both musicians and labels around the world.

The 360 deal is one that calls in more revenue for the label than the artist. The deal consists of 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.

This change in the industry is result of the non-existent sales from compact discs which used to cover the majority of the profit. This past year has shown a significant drop from previous years. The CD sales of 2008 slumped 20% from the 2007 numbers while the CD’s arch-enemy, illegal downloading, rose 32% from 2007. There is no wonder the music industry feels the need to cash in on all areas of their artists’ success.

But it seems that everything digital isn’t doing so well. The online music search engine, Seeqpod, who worked with the “play and pay” technique with users, filed for bankruptcy last week and is selling off all of its assets.

Unfortunately, this proves that the industry is changing and that the record labels are fighting to stay alive any way possible. 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. But with a struggling music industry underway, artists are keeping as quiet as possible.

The decrease of CD sales in the last few years 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 an 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 digital trend has been making it online and the record labels have 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 primary reason for the success of MySpace Music is because it allows professional artists and new artists to be together on the same website and receive the same amount of coverage. Users are presented pros and upcoming musicians on the homepage and can sample their music for free. The amount of musicians on the site is startling and can prove difficult to navigate through artists. Just in the leading genres of music on the website, Hip Hop and Rap, the numbers between the two total close to 5 million artists listed on the site. There are still 31 other categories on MySpace Music with artist genre numbers in the thousands and some in the millions, proving that MySpace is just one of the websites which promote upcoming artists successfully.

Concordia University’s radio station CJLO Program Director Brian Joseph says that CDs were a way to select the artists with the talent whereas MySpace is now changing that whole dynamic.

“CDs were a good way to pull the reins back and the [music] companies to say “Ok, you’re worth us going and spending money on making CDs.” Whereas these kids can now go and put it on ITunes or MySpace and be like “Download it, just take it, take it.” It’s become such a different market that music fans are now over-saturated with music,” says Joseph.

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 the smaller, independent labels using the 360 deal for their artists instead of the major labels. The Canadian music labels vary from their American counterparts because some staffers even stand in as promoters and artist merchandisers for their artist.

Montreal Record Label Tru Kings is just one of the local labels using the 360 deal. They use a smaller scale of the 360 deal when signing their artists because in this digital industry, it just makes more sense.

“We know where the future is going and that CDs are becoming obsolete. So we do try to promote the CDs by handing them out but we really try and push the people towards the MySpaces, Facebook and ITunes because that’s where it’s headed,” says Tru Kings co-owner Hamid Rouse.

The record label follows the 360 deal guidelines like promoting their artists through press contacts as well as promotional concerts for the local communities. But they are also experimenting with other opportunities and judging which ones work best. Hamid Rouse says that their website and their artists’ MySpace page is how the fans discover their talent and is the most successful to date.

“Our main artist, Solo, his fans don’t really buy his CDs anymore. They rely more on him to update his MySpace page and follow his music career through that avenue,” says Rouse.

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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Source List

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)Joseph, Brian. CJLO Program and Hip Hop Director. brian@cjlo.com

6)Rouse,Hamid. Tru Kings Co-owner. (514) 651-4545.

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