Where Do We Go Now (Part 1)

I believe the music biz will retain a few well-remembered scars even if they do heal.

Last time I touched on how the state of the music biz got from where it was (riches) to where it is (rags).  I want to touch on one idea that could help stabilize the ship somewhat – or at least make it more palatable for all involved when signing major label deals.  But I first want to caveat it with this; I believe the music biz will retain a few well-remembered scars even if they do heal. 

360 Deals

No way I am going to get out of speaking on this, so I will jump right into them as part 1 of “Where Do We Go Now”. Note: If you don’t know what 360 deals are (is that possible?) then you are probably a better candidate for actually reading my opinion on them than those that have already formed their opinions on them. For those that have already formed their opinion, please bear with me as I elaborate a bit on mine.

360 (or multiple rights) deals allow major labels to get a percentage of an artists revenue from items and services that had not previously been offered to the record label, such as merchandise sales, shows, endorsements, etc. This allows the label to insert themselves full circle (360 degrees) into a revenue stream that had previously been reserved exclusively for the artist and their management team. Just a short while ago I would have stated that 360 deals were becoming increasingly common, but with the state of the music biz and the economy, I can now pretty comfortably say that these are just about the only deals that are even being offered right now – at least in the rap game. To sell the deal the major labels have offered to shoulder some of the management responsibility and really become pseudo-managers themselves.

So with that being said, here’s the big question…

Are 360 deals good or bad?

Both.

Seriously.

The reason that I say this is because in my opinion (that’s why I’m blogging) I believe that any legal contract is always give and take and the key is to try and negotiate a win/win for both sides. Those are the good contracts. If one side is not happy then the contract usually ends up breached anyway and everyone loses. Those are the bad contracts. But even in the case of a 360 deal, IF the deal is written fairly (i.e. is a win/win for both parties) then it could actually be good! If this weren’t a web page here is where I would probably have to duck, but hear me out first because I have a suggestion for making 360 deals fair!

BigStrad 360 “bubble” deal… basically says “I will take multiple jobs to help pay off my loan quicker, but once I get it paid it off stop asking me for a payment – until I take out another loan”!

The major label and the artist bear a certain amount of risk in entering into a contract with one another. At a high level, the artist is risking their youth, career, dreams, etc, and the labels are parting with nice sums of cash in the hopes that they can not just make a profit, but just recoup their investment. With this in mind, I propose the BigStrad 360 “bubble” deal. It is based on give and take on both sides of the contract as follows:

    Label’s Skin in the Game

  • Labels should be allowed to recoup their monetary investments by tapping into all of an artists revenue streams (merchandise sales, shows, endorsements, etc) up until the point of they have recouped their investment. This is they key. At that point the “bubble” bursts and it reverts back to a traditional label deal with the label profiting from music sales only.
    Artist’s Skin in the Game

  • If a label will only be issuing a monetary investment then it is up to the artist and their management team to perform all management related tasks and the label should not have to perform any tasks such as seeking additional revenue streams – however it really is in the labels best interest to do so as they will recoup even faster! That is where the win/win comes in.

This deal should be fluid enough to create or burst another “bubble” and move back and forth based on whether an artist is in the red or the black. This fluid type of 360 structure is probably a lawyers worst nightmare, but could allow the label to recoup their investment faster (and much more safely) while still remaining a fair “bubble” clause which is in the best interest for the long-term career plan of the artist – especially the artists that ARE in the black and deserve it. Am I a lawyer and have I worked out all the kinks? No and No. However, common sense has to come into play at some point. This type of deal basically says “I will take multiple jobs to help pay off my loan quicker, but once I get it paid it off stop asking me for a payment – until I take out another loan”!

Next time I will take a look at a new middle class of entertainer.

– Big Strad

Tags:

Comments are closed.