Aspiring Artists might wanna read: 360 deal vs. Traditional deal

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It’s a well known fact that 360 Deals are pretty much the norm these days for any artist wanting to align with a major label. Mainly out of curiosity I’ve always wanted to see how one broke down, because outside of ponying up for recording costs, what else can you say a major label does for an artist? They don’t develop them anymore; instead stepping in after the artist has some semblance of a following and selling them a dream. Industry jack of all trades, Wendy Day, feels the same way & penned an enlightening article on the subject. Using her contacts and knowledge from her time served, she compared a traditional deal vs. a 360 deal.
Back in the day, labels took roughly 87% of the pie while giving the artists 12% of the money AFTER the artist paid back everything spent on them from that 12% share. This means that if the artist sold $500,000 worth of CDs, and it cost $50,000 to market and promote that CD (a very low example), the artist share of $60,000 (12% of $500k) would be divided between paying the label back that $50,000 and a check for the remaining $10,000. The label would receive $490,000 for its investment and belief in that artist while the artist made $10,000. In exchange for giving up the lion’s share of the sales, the labels always told the artists that they’d make 100% of the touring. Any show money, was the artist’s to keep!
When the @!%* hit the fan financially for the labels, they decided to tap into the show money, and all other streams of income for the artists, as well. After all, if your profit margin is made smaller, you need to eat more of everyone’s income to keep the fat cats at the top, and the stock holders, happy. Most 360 Deals share in endorsement income (15% to 30% depending on the artist), performance income (10% to 30% depending on the artist), merchandising income (20% to 50%) and Film/TV money (15% to 40%).


While those percentages can go pretty high, they’re even more eye popping when she applied some numbers to them:

Example of a “360 Deal
 
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Originally Posted by jupiterjaywall

Originally Posted by MusicalExcellence

360 deals should be illegal...
Didnt Drake and Nicki sign 360 deals?
Birdman still caking..
i dunno about nicki but drake has his publishing so even if they makin dough off everything else its not technically a 360 deal...
 
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Oh wow. That #$% is slave labor and like Time said, it should be illegal. Any artist who signs that garbage needs to be shot and left for dead. That 360 deal is the most ridiculous #$% I've ever seen.
 
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Is this Gucci? Either way, the label gambled a million dollars on your success, and used their contacts and resources to put you in the spotlight. It's a business, and the artist brought in a million to himself, which is much better off than where they were to begin with.
 
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 Crazy I know, and alot of people wonder why most of these independent artist get more bread than the typical mainstream artist...BTW do you guys know of any artists who have this specific type of deal?
 
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This once again all depends on what type of artist you are. Being an independant without a backing is gonna take you but so far. Drake is the only acception that i could think of right now... because dude had hit records on radio and everyone knew who he was before he ever signed a deal. Which is why he doesn't have a 360 deal and has one of the best solo artist contracts in the biz
 
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You see but the problem is alot of singers and rappers don't do extensive touring before they get those major label deals

Anyways what I was really wondering about is why would someone like Drake or say a band like Paramore sign into this after creating a substantial fanbase .....
 
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Originally Posted by YoungAnakin

work hard and you can make a lot of money through a 360 deal (i.e. soulja boy).

  
Soulja Boy didnt sign a 360 deal.


Jay Z just signed a 360 deal with Live Nation...Boss? not really
 
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Originally Posted by fac3 tak30v312


You see but the problem is alot of singers and rappers don't do extensive touring before they get those major label deals

Anyways what I was really wondering about is why would someone like Drake or say a band like Paramore sign into this after creating a substantial fanbase .....
It cost money to do all that promotion. The label takes care of all that
  
 
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Yeah but in the two examples I listed they already had a pretty big buzz and atleast I know in Paramore's case they were already doing sold out coast to coast tours, not on the scale they are doing now but that really wasn't that outside of the realm of what they already doing
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Honestly in this day and age of youtube stars what other choice do they have (meaning artists) ... We could all smoke that pipe dream of the perfect indy artist but too many cats want to buy in instead of standing out alone

Also I doubt that Jay-Z's deal is the same as some the deals being mentioned here

Anyways something that really caught my eye was them taking money out of your tv/movie money so say if you're a young Will Smith you gotta pay your movie agent, your publicist, acting coach etc and off the top you gotta pay YOUR label (20-30%) of that Fresh Prince money .. so what about if you haven't delivered the required amount of cds or whatever else is required under your contract but instead became a Tv/Movie star you're telling me you gotta give the label a cut before anyone else even though technically you're not really a music star anymore or at least right now.
 
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fac3 tak30v312 wrote:[hr][/hr]Yeah but in the two examples I listed they already had a pretty big buzz and atleast I know in Paramore's case they were already doing sold out coast to coast tours, not on the scale they are doing now but that really wasn't that outside of the realm of what they already doing
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Honestly in this day and age of youtube stars what other choice do they have (meaning artists) ... We could all smoke that pipe dream of the perfect indy artist but too many cats want to buy in instead of standing out alone

Also I doubt that Jay-Z's deal is the same as some the deals being mentioned here

Anyways something that really caught my eye was them taking money out of your tv/movie money so say if you're a young Will Smith you gotta pay your movie agent, your publicist, acting coach etc and off the top you gotta pay YOUR label (20-30%) of that Fresh Prince money .. so what about if you haven't delivered the required amount of cds or whatever else is required under your contract but instead became a Tv/Movie star you're telling me you gotta give the label a cut before anyone else even though technically you're not really a music star anymore or at least right now.




Well I mentioned this in the other thread. Its actually beneficial. Because there will always be a ceiling if youre doing it independent. There are doors you just cant open without a labels help or a labels backing. You cant go on major tours without a labels investment of 100s of thousands of dollars. You cant go on a successful press release without a label cosigning and paying radios to interview you. You cant have eye catching videos witout a label. Street teams, internet marketing, etc.

And yes Jay's deal is a regular 360 deal he's independent as in he makes his own decisions but he has Live Nation paying for all his expenses. Everytime you see him on a major sporting event or hear his music on ESPN its because of Live Nation. Every movie release that plays Run this town or ESOM Live Nation either pays for it or gets paid for it. Jay every quarter gets a check of the difference. Thats why he probably hasnt been able to push his other artist yet because he still owes Live money for his project. When you see he signed that 100 mill deal thats not all his money thats his bidget. Thats why he's at the world series thats why he's at the super bowl that's why his songs got hella air play, thats why he gets hella air time on the grammy's because he got a gotdamn movie budget.

Now of course his name is already big thats why they took that big of a risk with him because he's Jay Z. They wouldnt invest 100 mill in a Travis Porter or Roscoe Dash. So Big buzz dont necessarily equal dollars. Drake could have already have had a million fans ready to purchase his album. But how is he going to get the albums duplicated and packaged? How was he going to get it sent it to all the stores across North America? Paying all that plus marketing cost millions of dollars even if Drake had that to spend on himself at the best he would probably just get his money back. Where as a label handles all that and maybe gets a percentage of your album sales. Madonna signed a similar 360 deal as Jay. These are big artist so labels are risking more money but the artist are getting raped just the same but they have a higher potential of making more money than the "ATL rapper used in the example".
  
 
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Originally Posted by cartune

fac3 tak30v312 wrote:[hr][/hr]Yeah but in the two examples I listed they already had a pretty big buzz and atleast I know in Paramore's case they were already doing sold out coast to coast tours, not on the scale they are doing now but that really wasn't that outside of the realm of what they already doing
.
.
Honestly in this day and age of youtube stars what other choice do they have (meaning artists) ... We could all smoke that pipe dream of the perfect indy artist but too many cats want to buy in instead of standing out alone

Also I doubt that Jay-Z's deal is the same as some the deals being mentioned here

Anyways something that really caught my eye was them taking money out of your tv/movie money so say if you're a young Will Smith you gotta pay your movie agent, your publicist, acting coach etc and off the top you gotta pay YOUR label (20-30%) of that Fresh Prince money .. so what about if you haven't delivered the required amount of cds or whatever else is required under your contract but instead became a Tv/Movie star you're telling me you gotta give the label a cut before anyone else even though technically you're not really a music star anymore or at least right now.
Well I mentioned this in the other thread. Its actually beneficial. Because there will always be a ceiling if youre doing it independent. There are doors you just cant open without a labels help or a labels backing. You cant go on major tours without a labels investment of 100s of thousands of dollars. You cant go on a successful press release without a label cosigning and paying radios to interview you. You cant have eye catching videos witout a label. Street teams, internet marketing, etc.

And yes Jay's deal is a regular 360 deal he's independent as in he makes his own decisions but he has Live Nation paying for all his expenses. Everytime you see him on a major sporting event or hear his music on ESPN its because of Live Nation. Every movie release that plays Run this town or ESOM Live Nation either pays for it or gets paid for it. Jay every quarter gets a check of the difference. Thats why he probably hasnt been able to push his other artist yet because he still owes Live money for his project. When you see he signed that 100 mill deal thats not all his money thats his bidget. Thats why he's at the world series thats why he's at the super bowl that's why his songs got hella air play, thats why he gets hella air time on the grammy's because he got a gotdamn movie budget.

Now of course his name is already big thats why they took that big of a risk with him because he's Jay Z. They wouldnt invest 100 mill in a Travis Porter or Roscoe Dash. So Big buzz dont necessarily equal dollars. Drake could have already have had a million fans ready to purchase his album. But how is he going to get the albums duplicated and packaged? How was he going to get it sent it to all the stores across North America? Paying all that plus marketing cost millions of dollars even if Drake had that to spend on himself at the best he would probably just get his money back. Where as a label handles all that and maybe gets a percentage of your album sales. Madonna signed a similar 360 deal as Jay. These are big artist so labels are risking more money but the artist are getting raped just the same but they have a higher potential of making more money than the "ATL rapper used in the example".
  

A 360 deal makes sense for a established artist like Jay-Z. He's gonna do atleast 1 million. But it makes absolutely no sense for a artist to do a 360 deal who's selling under 1 million. Being indie has a ceiling. But money-wise its ceiling is just as high as being a major if not higher. Labels need to be called out on this $%@. This is slave labor. This is not coo. But I suppose there's nothing anyone can do other than go indie. Labels aren't developing artist anymore. Label's aren't doing $%@ but relying on the artist to market themselves. And getting compensated for it?

Label's first off need to quit spending marketing dollars like its 1995. Nobody is going platinum anymore and selling 300,000 copies is becoming the norm. Label's need to adjust to the times rather than rape the artists even more than they use to.
 
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Its a gift and a curse my dude. Its the little man vs the machine.

Its starting to get worse tho because of the sales decline. They are getting more strict on certain things. You cant book shows outside of your label without getting in some kind of contractual trouble. These big heads are even stopping their artist from collaborating with artist if they arent signed to a label they arent even trying to negotiate with you for a verse.
Even if you have the money they not trying to hear it. They're doing little things like this to knock out the indy dudes its crazy.

I got ideas to change !#+# so hopefully in the next couple years I can land an exec job somewhere
 
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Originally Posted by cartune

Originally Posted by YoungAnakin

work hard and you can make a lot of money through a 360 deal (i.e. soulja boy).

  
Soulja Boy didnt sign a 360 deal.


Jay Z just signed a 360 deal with Live Nation...Boss? not really
yes, he did.

and i believe i've seen you pass off jay's contract with live nation as a 360 deal in other threads. why do you insist on this? it's not true, or at least not in the sense of the traditional 360 deal.
 
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Either way now more than ever you gotta start thinking of yourself as your own label/company, and only seek out a distribution contract
Since what amounts to no more than a loan you're set to give away most of your earnings
It's that or bet on your first album being a smash

Also I would like to see what a typical indie contract looks like too since the majors have bought up a good bit of the larger indie labels
 
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Originally Posted by YoungAnakin

Originally Posted by cartune

Originally Posted by YoungAnakin

work hard and you can make a lot of money through a 360 deal (i.e. soulja boy).

  
Soulja Boy didnt sign a 360 deal.


Jay Z just signed a 360 deal with Live Nation...Boss? not really
yes, he did.

and i believe i've seen you pass off jay's contract with live nation as a 360 deal in other threads. why do you insist on this? it's not true, or at least not in the sense of the traditional 360 deal.
No he didnt bruh I talk to Soulja Boy and Mike on the regular Im getting my dude Calico Jonez signed over there. He didnt sign a 360 deal He got his own situation through Collipark and Interscope

Thats why dudes always say Soulja might not be the best on the mic but business wise he's light years ahead of dudes


As far as Jay I dont know why u trying to fight me on this one a 360 deal is a 360 deal and Yes he signed one. Jay is an artist just like everyone else. A major artist, yes but even Mike Jackson was under a leash why dont you think Jay is?

"I don’t know if I’m willing to do a 360-degree deal at this point," 50 said. "I mean, Jay is in a different space in his career. He may be tired of running around and negotiating each individual deal. The 360 deal would be actually putting that in someone else’s hands to support those outside ventures taking place." - 50 cent
  
 
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