UNDERSTANDING A 360 MUSIC DEAL

MBABANE - Most artists find themselves caught up in a record deal for most of their music careers.

A 360 deal is the most common record deal that artists sign with record labels, it is imperative that artists understand what they are getting into. According to research done by this publication, the name implies 360 deals which are sometimes referred to as multi- rights deals, which gives record labels a share of the artist’s entire income. This includes earnings from touring, song writing, licensing, merchandising, digital platforms, sponsorship’s, endorsements, motion picture acting, song writing publishing, merchandise, modeling and literally everything else. The record label, in a summary are entitled to a percentage of all revenue an artist generates related to their music.

Essentially, a portion of profits from any money making activity undertaken by the artist goes to the record company. For example, if your 360 deal includes 25 per cent gross live performances, when an artist includes all their other potential revenue streams, this could be a significant amount of money given up to the label. If not planned for correctly, could end up being a net loss for the artist. Record labels ask for a significant portion of a musician’s income from other sources. As a musician, it’s important to understand and potentially negotiate how that income gets calculated.

Labels

In exchange for signing, record labels are supposed to help build the artist’s brand as a whole. Through their networks of contacts, they would then be liable to helping artists develop new business opportunities and new streams of income, which is rarely the case. The deals vary depending on how big the artist is, and the type of income streams the record company wants.
This publication felt it was important for musicians to understand the pros and cons of a 360 deal. A multi-rights contract generally reduces the amount of revenue an artist can earn. The degree to which this impacts the artist depends on the percentages granted to the label. In the past, an artist could generate significant income from touring, merchandise and publishing. There would be percentages given to management, the booking agent, the publishing company and others. But in this day and age the record labels are entitled to some of that as well. The major interest here is that musicians stand a chance to lose creative control, their copyrights, publishing rights and the works.

Contract

Normally, artists who wish to sign a recording contract with a major record label may not have much of a choice, especially when we are referencing to an upcoming artist, who normally need a major cash injection to get their career of the ground. On the flip side of the 360 deal it can work in an artist’s favour if you have all your facts in order, and make sure you are on the right side of the law, for example; you would need to hire a good lawyer. If an artist has reached the stage of serious contract deals and negotiations, it is mandatory to hire a good lawyer who is familiar with the industry, it is advisable to get an entertainment lawyer because they understand the music industry in depth. They would guide an artist in these kinds of deals, and can speak their language on their behalf.

With a good lawyer, an artist can negotiate better terms to benefit the artist, especially where the artist is already making money. Secondly it’s important to clearly define your percentage splits. This might seem like a no-brainer, but it is imperative to get all the division of profits solid on paper. For example, if a label wants 50 per cent of your performance revenue and 20 per cent from merchandise and endorsements make sure that it is clearly defined with no vague term which is where your lawyer will come in handy.

Terms

Additionally, there is nothing wrong with asking for terms to sweeten the deal, if a label wants 50 per cent of performance revenue, an artist can negotiate to have them pay for room and board for the entire tour. If they want a cut of the merchandise, suggest having a stake in manufacturing the merchandise. An artist shouldn’t be afraid to carve out more benefits in exchange of their share. When reached for comment regarding the 360 deals Sibusiso Simelane who is the Founder and Director at Upscale Records, said “We don’t offer a 360 deal, yet looking from the outside in, our deal looks like one due to the fact that we offer all the services that the artists need. In order to grow which includes; management, unlimited studio time, music distribution, music public relations, plus mixing and mastering.”  He added that their current financial stance did not allow them to make offer a 360 deal.Simelane then continued to say “We at Upscale Records are management first, some know us because we worked with and managed DJ Tendaness for four years at the peak of his career. Therefore our record label comes in as a partner to offer the primary keys that artists need.”

Distribution

He went on to share that they have a deal with one of the best distribution companies in the world, ‘The Orchard ‘ which is a subsidiary company for Sony Music Entertainment. They also offer music distribution for Ambitious Entertainment, Vth Season, Afrotaiment to mention a few. The record label also offers financial assistance in terms of music videos and other stuff.”
When quizzed if it the 360 was fair a deal, he said “Yes I would say it is a fair deal as it always works for the artist. Even if the record label does not make their money back, the artist always wins. As it is the artist’s name which would be made and put out there during the period of the deal. It is always a risk for the label not the artist,” said Simelane.  When reached for comment from an artist’s point of view Lyrikal Busta who is a local Hip Hop Artist said, “Music is just like any other business, and every investor at some point needs their return in investment. I think it’s all in the agreement and the contract that’s put in place. I look at as a business at the end day, no feelings involved,” said the artist.

Post your comment

Your name:

Your e-mail address:

Add your comments:

Please enter the code you see in the image:

Image:

Code: