360 Deals: Savior or Bane to Artists?

With CD sales taking a complete nosedive over the last couple of years, the music industry is straining to find alternative revenue streams to keep it afloat. Actually, I should qualify that statement - record companies are straining. Companies involved in other aspects of the music industry, such as the venue promoter Live Nation, are doing just peachy thanks to a newer type of music agreement - the 360 Deal.

Unlike traditional recording agreements, which provided funds for recording, distribution and some marketing of a physical CD, 360 Deals promise to develop an artist into a true rockstar. Under these agreements, companies like Live Nation are teaming up with third-party affiliates that specialize in things like merchandising, pressing and distribution; things Live Nation doesn't necessary do or have the know-how to accomplish. Through these connections, the artist gets a whole team of experts (so that theory goes) that will mold and shape them into international superstars. Artists with more than a CD -- Artist with clotheslines (Avril), perfume (Mariah), you name it! By signing these deals (especially with major companies like Live Nation), Artists get a full range of expert advice. Amazing, right?

Well, not everyone thinks so. Critics of the 360 come in all shapes and sizes. First, Artists, bucking the idea of companies taking over more than just creative control of their records (something Artists constantly fight to keep), are equally appalled by an attempt by companies to "brand" the Artist's face all over endorsement products -- even if they are products that fans buy and identify with. After all, that's "selling out." Then there are others that say 360 Deals are simply an attempt to bite into a piece of pie that has traditionally belongs solely to Artists -- income from tours and merchandise. In order to become a rockstar these days, you have to pay the price (literally).

However, 360's aren't all bad for the artist. After all, it's hard enough for a band to get signed to a crappy record deal in the first place, nevermind land a decent merch company and a manager to book their tour in decent venues. Here, companies are offering a "one stop shop" option for artists - put that pen to the paper and get all the resources you'll ever need, including grooming you into a superstar. For many struggling artists, this is a perfect solution! Be forewarned though: 360 Deals are longer (some up to 10 years) and more encompassing (meaning the company you sign with will take pieces of everything you do). If the deal doesn't work out, you're either stuck together for years or you get dropped (or leave) and are back at square one.

It's difficult to say if these agreements will catch on in the long run. There's also the argument they may not be 100% legally enforceable -- naive artists have been known to get out of huge deals under the doctrine of undue influence and coercion. Mega-companies like Live Nation need to tread lightly. Also, it's unclear if these deals will pan out for "regular" artists; to date, the media has only reported huge deals in excess of $150 million for the likes of Madonna and Jay-Z. For all intents and purposes, Madonna and Jay-Z are the last folks that need development into rockstars -- HELLO?!? That begs the question of whether the potential pay-off from newer artists is worth the risk. Only time will tell.