The ‘music industry’ has at last awoken to acknowledge the existence of ‘new’ music distribution networks such as the World Wide Web and P2P. It has also begun to realise that quashing these technologies by imposing crippling Digital Rights Management on digital recordings may not be terribly effective, and so a new business model has been proposed - the 360-Degree record deal…

This new form of record deal is in many respects very similar to the classic deals of the 20th century (where the label gets the vast majority of the music sales profits), but this time around the labels want to also take a sizeable cut of the artist’s live performance, publishing and merchandising earnings.

So, what’s the benefit from the artist’s point of view? Well, to put it bluntly, none. In fact, the deal for the artist under this new regime is far worse than anything that had previously been available. For the majority of bands, even very well known ones, their main source of income is usually touring and merchandise - and the industry now wants a slice of this pie. To justify their cut, they say that their PR and promotional engine can help to break new bands, but this is what they had always been doing anyway. Rather than give up so much potential income, new bands would be far better off producing (and distributing) their own music and hiring a dedicated promotional agency to handle the marketing and business side of things.

Here’s a typical breakdown of the 360-Degree Record Deal for new bands:
Label gets approx. 90-95% of record sales
Label gets approx. 10% of touring income
Label gets approx. 10% of merchandise income
Label gets 9c publishing cut per song (or more, depending on media distribution)

Of these elements, the first one is the only clause consistent with previous practise in the industry. The labels have brought this model in as a response to the changing face of music distribution and consumption technologies, but the very prevalence and affordability of these technologies is the reason why no artist should commit to a 360 deal in the first place. If you have enough on the radar to attract the attention of a major, then you really don’t need them.