Posted on 11/11/2008 10:49:19 AM PST by weegee
With many major labels posting significant losses every quarter, Warner Music have decided that enough is enough and as such have decided to require all of their artists to sign the new '360 deal' before working with them.
Whereas previously, labels only got a cut of album sales and related airplay, under the '360 deal' they will entitle themselves to a slice of the merchandise and touring pie. In effect, the band will become a subsidiary company to the record label and be required to declare its earning in every field which the label will then take a cut of. The name likely comes from the fact that no matter where a band turns in degrees, there's someone there with a hand out demanding money.
The reveal came at the Web 2.0 Summit in San Francisco where Warner Music Group CEO Edgar Bronfman Jr. took to the stage for a keynote address.
"Every new artist we sign, we sign now with rights in all their revenue streams: ticketing, touring, merchandising, sponsorship," Bronfman said. “We're only signing artists that way and we now have over a third of our current roster signed to 360 rights.”
It is unclear if bands with existing contracts will be required to sign the new deal. Earlier this year, Creation Records founder Alan McGee, the man responsible for breaking Jesus and Mary Chain, Teenage Fanclub, My Bloody Valentine and Oasis spoke out against the new deals. He has since retired from his management and label positions in the industry. He said:
"Why am I reading about record industry honchos defending 360-degree deals? I find it incredible, this passion to rationalise one's industry's demise.
"The record industry's demand for bands to sign over a portion of their merchandise and tour revenues as part of a recording contract is an admission that selling music is not a sustainable business model.
"I understand survival. I understand business. I understand it is not always win/win as it should be. I understand some lose and some win. But I don't understand raping and pillaging in business.
"Artists have been getting ripped off since the beginning of the marriage of commerce and art. Musicians have been getting the sharp end of the stick since the start of recorded music. You don't have to look far to find a bankrupt or poverty-stricken musician.
"It was trailblazers such as Peter Grant here in the UK and Shep Gordon in the States who fought for artists, winning them a percentage of the door at gigs. They pulled artists out of the slavery of 1970s deals.
"Didn't we all applaud that? Wasn't it great when the Beatles started their own label?
"In a 360-degree deal, this is what the records company is doing: ripping off the door at the gig. Let's call it like it is. Where is the morality in that? The cops would bust someone for stealing at the door. And everyone would applaud.
"So what's going on here?
"It raises the question of legality. If you want a record deal you have to give up money you earn from other endeavours. Isn't this a form of extortion? I hope some attorney gives counsel on this for us all.
"Because music is free and the traditional record industry model obsolete it doesn't give the industry the right to move into the business of promoters and merchandisers.
“What next? Will oil companies own our cars?”
Lately I've been listening to a lot more music by small bands that sell through places like CD Baby or their own record labels.
It’s the same with Film Studios being run by people with no regard for film history. I admire the way the BBC runs their dramatic wing. The people in charge have backgrounds in Literature and Drama not Business Admin.
does this mean with 360 the artist will be GUARANTEED an income?
does this mean with 360 the record label assumes some of the costs?
But they do an excellent job indeed.
Now, Livenation will take a cut of merch when you play one of their venues (and they’ll take a cut of ticket sales under the guise of “handling fees”).
“The name likely comes from the fact that no matter where a band turns in degrees, there’s someone there with a hand out demanding money.”
The label won’t assume any of the cost. All costs are written down against “future earnings”. The labels will get an artist in debt quickly and it will take the better part of a decade to get out of debt (makes you work harder for your label who owns your catalog).
The labels aren’t making so much these days, so they want a stake of the “celebrity” pie. They are also now starting to sell “session photos” and other promotional images that were in the vaults. The art market is willing to pay $1,200-3,500 a photo. And the artist may not see a dime (the label and maybe, if he’s lucky, the photographer will split it).
I worked in the live end of the biz for over 20 years and you are right on. Most of the acts out there will sign anything. I've seen contracts, which if enforced to the letter, would require the artists to fork over a % of ANY money they received while under contract ie. Christmas money, inheritance, tax refund, even a mail in rebate.
There are also entertainment lawyers out there who will recommend signing a bad deal, telling the client that once and if they do break big, the attorney can always come back and rework the contract, billed hourly of course.
Shouldn’t be long before they are knocking on the Whitehouse door for some bailout love. LOL
Hollywood DID get a bailout. Multimillion dollar films. There was at least one FR thread about it.
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