The future of music

What Is a 360 Deal in the Music Industry?

July 21, 2023
What Is a 360 Deal in the Music Industry?

Are you wondering what a 360 deal in the music industry is?

360 contracts have increased in popularity during the rise of the digital age of music, so it’s important that aspiring artists understand what is being offered to them.

This article will walk you through what a 360 deal is, how it came about, how it is advantageous for both labels and artists, and how to ensure your safety if you enter a contract like this.

We hope you learn a lot!

What is a 360 Deal?

A 360 record deal, known simply in the industry as a 360, earned its name due to the all-in nature of the contract.

In essence, it is a contract between an artist and a record label in which the label earns a percentage of the artists’ music sales.

This doesn’t just apply to straight units sold, unlike other types of contracts.

This also applies to merchandise, concerts, publishing, television appearances, and any other revenue that the artist pulls in.

How Did the 360 Deal Come About?

360 deals have only really been a thing since the early 2000s, due to the massive decrease in album sales around that time.

This is of course due to the emergence of social media and streaming – think Spotify and YouTube – and the beginning of the digital music age.

Labels decided to combat this by expanding contracts to encompass all activities that the artist partakes in.

This means that if an artist only sells 100,000 copies of an album, but makes millions when touring, the label can still come out on top and make a tidy profit.

Is a 360 Deal Good for Labels?

A 360 deal is an advantageous contract for labels due to the fact that they may not earn much of a profit simply from music sales.

This means that if they sign a smaller artist who potentially hasn’t had a real breakthrough, they can gain revenue through other means.

However, for labels that may not have much money to fall back on, a 360 is a bit of a gamble.

A label will pay for an artist’s studio time, hair and makeup, wardrobe, appearances, photo shoots, and more.

While these things generally bring in revenue, this isn’t a guarantee!

This means that labels could be shelling out money without getting it back – they’re essentially banking on the artist’s success.

It is less of a gamble than some other deals, though.

They’re increasing their chances of getting their money back since it isn’t solely based on music sales. 

In most contracts, anything a label spends during a 360 deal is owed as a debt at a later time.

Is a 360 Deal Good for Artists?

For a budding artist, a 360 deal might be a golden ticket.

Record labels will mainly focus their approaches on new, indie artists since they know that it is a beneficial relationship for both parties.

New artists are unlikely to have the funds to produce, market, and tour, while labels will have funds to spare.

This means that an artist’s chance of a breakthrough increases exponentially when they sign to a label, even though it appears as though they’re losing a lot of money in the early stages of their career.

The benefit – once their career has begun, they’ll hopefully be making enough money to afford the repayments.

The cost – if their income isn’t as large as hoped, they have a large amount of debt. 

If an artist signs any deal with a label, 360 or otherwise, then they will share the label’s connections, budget, and relationship with distributors.

This is an excellent trade-off when they’re trying to break into the industry.

The only problem – every expense a label spends on launching a career is recoupable, i.e. held as a debt against future royalties.

Even advances are required for repayment.

A 360 sale really is an all-in contract that is not to be sniffed at.

If an artist isn’t certain about whether they want music to be a full-time career, then it’s not for them.

It is a deal that will bring a lot of pressure but in theory, the artist can come out with more profits than the label!

How Do You Ensure Your Safety in a 360 Deal?

So, you’re a new artist searching for a breakthrough and you’ve been handed a 360 deal from a respectable record label.

How do you make sure that the deal is safe and worth your while?

Your first port of call is to hire a good lawyer.

This is the same as with any deal, not just 360s.

They will be able to explain your proposed contract in full, handle negotiations, and make sure that your image remains professional despite any queries and questions you may have.

Even if you don’t have many funds, a decent lawyer is well worth the spend.

They’ll be able to negotiate better terms for you and ensure that you fully understand the decision you are making.

Secondly, make sure you fully understand the contract and any blanket terms used.

Again, this may require advice from a lawyer.

Some deals may try to trick or coerce you into having over profits from something other than your music, such as shares in a different business that you run.

Of course, this isn’t a good deal, and you should steer clear of contracts like this.

You need to be totally clear on what exactly they’re entitled to if you sign.

Your lawyer will come in handy when it comes to clearly defining this.

You don’t want any vague terms – if they ask for 50% of music revenue, define this.

Does this apply to digital sales or hard copies, or both?

Remember to make full use of your negotiating powers!

You can certainly acquire benefits, even if you can’t decrease their cut.

For example, if they decide to take 40% of your profits from touring, you can specify that they must pay your travel costs. It’s a two-way street!

What Is a 360 Deal in the Music Industry – Final Thoughts

That was the basics of a 360 deal in the music industry!

You now know what it is, how it came about, the pros and cons for both labels and artists, and the importance of hiring a lawyer before signing a contract.

We hope you now understand the all-in nature of this deal, and how to protect yourself if you’re handed a proposal.

A 360 can be the easiest way to begin your rise to stardom and is definitely a contract type to think about signing.

You may also like: What Is A&R (Artists & Repertoire) & How Does It Work?

Will Fenton

Will, the founder of MIDDER, is a multifaceted individual with a deep passion for music and personal finance. As a self-proclaimed music and personal finance geek, he has a keen eye for futuristic technologies, especially those that empower creators and the public.

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