Monday, February 14, 2011

Damn that 360 Deal!

Let's enlighten some of your brain cells folks. You need to know as an artist or band that there is business afoot in the industry and the foot smells like it ain't been washed in years. To recap the past few decades in music would only summarize the end result of much of the quality of the music that’s coming out or already out. No matter how you look at it, hear it, slice it, eat it, chew it, or however you decide to take it in, there is not a ton of quality music on the airwaves. What can be even more depressing is the fact that most of the songs on the radio all fit into one sub genre. Then add to that the fact that all the radio stations play the same songs for weeks, maybe months, straight by the same artists. There seems to be very little diversity.

The music industry went full blast with the one hit wonder scene early in the new millennium. It didn’t matter which genre the artist was in, if they had a glorified hit (least to the labels) then that was enough to get put on. The labels wanted to expand and make fast money. The one hit wonders did it for them. Imagine all the songs that came out in the past decade that were hits. Then imagine where you’ve seen the new faces that made these hits recently. Probably nowhere. All this congestion of hits-only music made the industry worse. On top of that, the major label mentality trickled down into the indie/underground scene. What came to pass was a lot of new faces that sounded like, or tried to sound like, all of the hit bands/artists that were currently in the biz but doomed for failure.

It became the quantity over quality situation. It was mainly caused by the industry. Why blame the labels? Well, when so many people with talent that want to make it don’t but the next Joe Schmoe that has no talent does, who puts the talent less ones on stage? Who runs the radio stations, the music television channels, the music stores? The labels do. And if people in the indie/underground scene want to make it, they got to sound like the stuff the labels are putting out.

The one hit wonder phase backfired on the industry. The masses weren’t fooled anymore by artists that they wanted to connect with but couldn’t because the artist was here today, gone tomorrow. People stopped buying music and started bootlegging more. Why waste time and money buying an album from a non-established artist, only to hear one hot song on the album and that is the song which convinced you to buy it in the first place? I can bootleg it and if I think its hot enough, chances are I’ll buy it…or not.

If the RECORD LABELS can’t make any money off the marketing and selling of RECORDS, then what are they to do? The labels realized that their funds weren’t coming in as much or as often as they used to, but the artists were still eating. The artists were eating off of endorsement deals, tv and film contracts, merchandising, touring and ticket sales, as well as off the radio, film, tv, and multimedia outlets from publishing. The majors did not like that. They got the feeling that they were being shafted and given the short end of the stick. No matter how long the labels have been fucking artists over with shitty contract deals, it didn’t matter because now the labels weren’t making a good return on the investment put into an artist. For the majors, if they can’t make money off of doing what they are SUPPOSED to be good at, then they would find another way to get money from the artists.

Enter: The 360 deal. Seeing the need to completely change the scope and scale of the music industry business model, the labels and their lawyers got together and developed a new deal with the mindset that if they’re not going to make money off of record sales, but the artists were still getting paid off of their fame, then the labels needed to tap more into the other outlets that the artists were into. I mean hell, they couldn’t have been famous without the help of the majors right?? So it’s only right that your new record label signs you to a deal in which they can get a percentage off of everything else you get paid from as a result of your being made famous. It doesn’t matter if they help negotiate these outside deals (known as vertical income streams) or not, they just want the money.

The surge and acceptance of the 360 deal in the music industry as the dominant contract to sign marks in a new era. An era that may prove to be more harmful than helpful to certain artists. Now if you’re Madonna, J-Lo, Jay-Z, Shakira, or any one of the major superstars with an already established fan base, then this 360 deal is just another contract. One that those artists’ super entertainment lawyers can tweak toward their clients own terms and conditions. For the rest of us, the unsigned ones, the indie ones…the 360 deal can prove to be quite dangerous to sign. I’ve been reading from some entertainment lawyers that a handful of talent have signed 360 deals that give the label percentage over ALL outside business endeavors the signee either owns or is a part of. Sometimes these deals are designed to last well after the artists has fulfilled their contract or gets dropped from the label. Sometimes these deals are designed to last FOREVER!! That means no matter who you as an artist re-sign with, you still have to pay that one label a cut of your profits.

Profits are where its at. GROSS PROFIT are what these deals chip away from. Not your net. For example…if part of your 360 deal is to chip off 30% from your tv earnings, then that is from your GROSS PROFIT after taxes and other fees have been taken off of that amount or paid back to whomever you have to pay. So if you land a TV deal to do a few episodes of America’s favorite sitcom and the deals pays you $100k, then the label gets $30k! If your net is below $75k after taxes, then you got to pay your stylist, your hotel bill…food, travel, and other expenses, you could be left with less than $60k. The label will get $30k which leaves you with almost $30k. Now to some artists that may seem like a lot if they’re not used to making that kind of money, but if you’re in a 4 man band and have to split your profits then that $30k don’t do nothing.

I want artists to understand that the 360 deal is a sound thought about the investment that labels put into its artists. But they need to reformat these deals to work within certain parameters. One entertainment lawyers says the deals would be fine if the time frame was shortened during the artists time on the label. Or each label could reverse the percentage cut once the artists has paid back monies owed to the label from advancements and other monies provided to the artist. Alas though, the labels aren’t about just letting go of an artist these days. If they can keep the artist then they’ll keep the rights of the music that artist makes and now they will have their hands so far into your pockets, they’ll be grabbing private parts.

I do not recommend that any artist sign a 360 deal. The truth is that many of you probably will thinking you’re going to make it big. If history has proven anything is that not every artist that signs a deal is going to make it big. Many of them are pushed back for more established talent. Some are just dropped from the labels if the labels feel there’s no need for the artist. Yet in all of these scenarios, if these artists have signed 360 deals, then they are stuck with paying money to a label that didn’t help them get fame at all or that their fame was short lived.

Like the old womanly quote says: “A moment on the lips, A lifetime on the hips!”