Tuesday, July 27, 2010

Music Publishers And The 360 Deal

As everyone connected to the music business knows these days, record labels are demanding 360 deals with all of their new signings. Just in case you're not sure, a 360 deal is one where the record label owns a piece of all your income streams, including revenue from touring and merchandise.

Now you might think, "Why should I give them part of anything other than the part that they're supposedly good at - selling recorded music?", and you'd be right. It's pretty outrageous to pay anyone who can't make a real contribution to the success of a revenue stream. A 360 deal in essence gives a label the same control as a manager has, or at least the same fees, but since they're not even that good at their core business of selling music anymore, why should you give them part of something that have no experience in?

But now it turns out that major publishers want to get in on the act too, and are demanding their own 360 deals.

At one of the recent monthly Association of Independent Music Publishers (AIMP) luncheon at LA's House Of Blues, a panel of publishing business affairs execs told the audience that music publishers are now demanding additional rights that amount to major label 360 deals when signing new artists.

The reason why the major labels want (even need) 360 deals is because CD sales are in the toilet, and downloads don't make enough (and even those sales are flat) to compensate. They have to make up for the loss of income somehow, and taking additional rights from the artist is the only way (so they seem to think).

So it is with publishing. Until recently publishing escaped much of the turmoil of the music industry. Mechanical royalties (the royalty when a CD or download is purchased) have dropped, but performance royalties (when a song is played on the radio, television or in a film) have gone up as more and more television channels came on line. But now that income has dropped as well as just about every broadcast entity is paying less for music, so publishers are also trying to make up the lost income.

What's an artist to do? If the label, the publisher, the manager, and maybe an attorney have a piece of all of your income streams, there's not much left.

All the more reason for the DIY approach that's now possible in Music 3.0. That's the only way that you can put yourself in a position not to have to take a 360 deal of any kind. Any kind of success that you generate increases your bargaining power. It's no longer just another way to do it, it's now a necessity.

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FanaticFactory said...

Jeez...everyone's sticking it to the artist! I can't wait for these parasites to die off.

Anonymous said...

I've advocated the DIY approach to my music business students for years. Labels aren't entitled to what they get now; and yet they want a piece of everything else. I think not!

Anonymous said...

You omitted a discussion of who is actually to blame for the development of the 360 model: people who steal and illegally share their music. It's the music fans themselves that created the need for labels to demand additional revenue streams from their artists. Recording artists, musicians, producers, publishers, managers and record labels have all suffered because of fan-related income loss. Let's also give honorable mention to Apple, Inc. and iTunes, which caused a catastrophic decline in album sales because for the first time, it gave music consumers the ability to purchase singles only. A minority of people still willing to pay for music and support their favorite artists are actually harming the entire music industry because the sale of singles does not generate anywhere near the income of whole album sales. -- StudioBitch


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