Deal or No Deal: The Pros and Cons of the 360 Degree Deal

In my last post I discussed the continuing transformation of the music industry and Live Nation's lead in the changing marketplace. Live Nation has sealed the deal with three of the world's most popular artists and they have all signed 360 degree deals. This type of deal allows the company to take a piece of the revenue from all sorts of areas that were previously untouched by record companies. By making a profit in areas other than recorded music, the company can assist artists in areas that have long been forgotten namely artist development. The 360 deal may just be a way to get back to the age when record labels existed to help an artist be heard and allow that artist to grow. Many artists shy away from the 360 deal as it seems overbearing and areas once providing an artist with an income will now become less reliable for the artist. Perhaps such a deal will only work with artists who are already established but the extra funding allotted to the company will allow for the development of new artists. At least that is what should be done with the extra funding. Upon reaching my own conclusion about 360 deals and wanting to spread my hopes for a more artist friendly industry, I decided to once again venture into the blogosphere and find out what my fellow bloggers thought of the 360 degree deal. The first post I came across, "Why 360 Degree Deals Won't Turn the Music Industry Around" is from a blog entitled Indie Music Strategies authored by Martin Johnson a marketer and self proclaimed Music Business Coach. He believes the 360 deal will do little to nothing to help the artist but only mentions new artists. The second post I found, "Rewriting Record Contracts: The 360-Deal" can be found at Depunked! A Music Blog written by ex music industry writer and intern Bridgette Featherstone. She does a great job of showing the immediate reaction to 360 deals which is often disbelief, but digs deeper into the heart of the deal and finds it has some great rewards. I have commented on each blog and provided my comments with links for you below.

"Why 360 Deals Won't Turn the Music Industry Around"
Comment:
First, thank you for your thoughtful and informative post on 360 degree deals. You have demonstrated that such a deal would be detrimental to new artists but how do you think it will affect established artists? The new deals signed between various artists and Live Nation are all 360 deals and surely, seasoned industry veterans such as Madonna, Jay-Z and U2 would not jump into 10-12 year deals blindfolded. I do agree that signing a new artist to a 360 deal could be unfair to the artist but I believe that with the record label relieving the pressure of immediately sending out a mega hit on a platinum album will allow the record label to spend more time on artist development. At least that would be the ideal way for it to work. Unfortunately there are many music industry executives who simply see dollar signs instead of talented human beings. On another note, perhaps new revenue from established artists 360 deals can help fund new artists and some sort of giving back system can be put together. Unfortunately looking at the history of the music industry, I feel it may be a short term fix for the dip in profits rather than a permanent change for the better. Though I am as skeptical as you, I cannot help but hope that the music industry may someday become more artist friendly. It seems to be shifting to the artist's hands anyway. I appreciate your opinion on the matter and it will be interesting to see how long the 360 deal will last or how many artists who do sign a contract will benefit as I feel it can go either way at this point.

"Rewriting Record Contracts: The 360-Deal"
Comment:
Thank you for posting both viewpoints of the 360 deal. I have read so many blogs where authors simply denounce the deal and do not even give the other side a chance and was beginning to lose hope. It is refreshing to find that you see that on the surface it may seem detrimental but deep down the 360 deal can be quite nice for an artist. Also, your post is well organized and extremely informative. The description of how a 360 deal breaks down is quite helpful in explaining the new industry standard. I agree with you that the 360 deal will not only allow but require labels to spend more time and effort on helping an artist become successful. I feel that the 360 deal may be a major turning point for the industry and could perhaps return the business to the days of artist development. What do you think? Do you feel that established artists will fair much better than new artists with a 360 deal or do you feel that such a system may actually level the playing field? I think 360 deals give all levels of artistry a chance to reap the benefits of a major label relationship. Live Nation is picking up huge artists left and right and signing them to 360 deals. Do you think that Live Nation will soon be a major player standardizing the 360 deal, if they haven't already? Bacardi recently signed a 360 deal with Groove Armada. How do you think random companies picking up artists will affect the major labels? Certainly the old ways are soon to be unattractive to artists and the 360 deal will be the only way to go. Also with other companies stepping up to the label plate, labels are urged to be entertainment companies as opposed to simply record labels. The 360 deal may just create a brand new music industry filled with brand new jobs for the next generation. Again, thank you for your well covered post and I hope to follow your blog for future insight.