The Legal Beat: Beyond the Standard "360" Record Deal

In recent years major labels have been almost exclusively offering new artists what are known as “360 deals.”  In the traditional major label recording contract the record company only took a percentage of record sales. With a 360 record deal, the label also takes a percentage of such revenue streams as touring, merchandising, endorsements, music publishing and even acting and modeling.  It should be noted that not all 360 deals are the same; there are many variations

On one end of the spectrum is being signed to a major and on the other end is being truly independent and selling your music on your website.

Most artists don’t like 360 deals for obvious reasons: they don’t want to share ancillary revenue streams with a record company. But is there anything you can do about it? Fortunately, there may be.

Limit the Revenue Streams
It is possible you can limit the income streams the label takes percentages of. For instance, if you are already an established actor, you can argue the label should not take any of your acting income. The argument is that the label should not share in this income since they had nothing to do with creating it.

Decrease the Percentages
If the label wants, for instance, 35% of your touring income, you can try and negotiate it down.You can also argue that if the label wants a percentage of touring income, then they should give you tour support and a separate advance for touring.

Do It Yourself
You can simply not sign with a major record label in the early stages of your career or at all. If you build up your fan base before you sign, you may be able to get a better deal.  If you have enough clout, you may be able to negotiate a joint venture type agreement. Let’s look at the example of Chance the Rapper. He began his career selling mixtapes which led to connections to established music producers. He also started getting publicity, such as a feature in Forbes Magazine.

Eventually, Chance began to appear on other artists mixtapes and was the opening act on Childish Gambino’s first North American tour. There was a bidding war to sign him with the major labels but he didn’t sign, saying, “There is no reason to sign to a label.” Several of his records were released exclusively on Apple.  While his is a nice success story, there are some advantages to signing to a major label.

New Models
Some independent labels may offer an alternative to the standard 360 deal. For instance, Samuel D. Hayslett, President and Founder of independent label Music Files Inc., offers artists a singles deal where the label has the option to choose a number of singles recorded by the artist.

The label does not pay for the recording costs as Mr. Hayslett states most new artists nowadays have home studios or ways to record themselves.  The artist is not committed to a long-term recording contract and it is not a 360 deal.