What is a 360 Deal?

With news that Jay-Z is very close to following in the footsteps of Madonna and U2 and signing a deal with Live Nation brings the issue of 360 deals to the forefront again. In Jay-Z’s case, Live Nation have reportedly offered $150 million for a ten year venture in which they get a piece of virtually everything Jay-Z touches, from putting out his records to earning a percentage from his clothing line. Major labels have embraced these kinds of deals and following the lead of Live Nation in trying to get their artists signed up to contracts that reach much further than recorded music.

But is it fair? Major labels have suffered a substantial drop in CD sales, and the story goes that music fans no longer want to pay for recorded music, but they are willing to pay for concert tickets and merchandise. With a 360 deal, a label can tap into that the money that band earns from playing shows and selling t-shirts. In exchange, (so the story goes) the label will work with the band on their overall career, trying to drum up opportunities beyond album sales. The labels say that this actually lets them devote more time to developing an artist, because they don’t have to go all out chasing big sales front the start to try and recoup their investment. If they have more ways to make their money back, then they can take a slow and steady approach to building a band and give the band more space and time to become a success before getting dropped. There is even a hint that less commercial bands could find major label homes under these deals.

I’m unconvinced. A band with slightly less pull than these two is essentially signing away all of their rights and everything of value that gives them any leverage. There is a huge incentive for labels to turn the bands into brands instead of musicians and use their image to sell everything from pillowcases to hygenie products (hello, High School Musical toothbrush line). These deals aren’t about selling music - they’re about selling anything - literally anything - that will make some money.

By the way, Live Nation and Jay-Z, meet Robbie Williams and EMI, early pioneers of the 360 deal. In 2002, EMI signed Williams to an 80 million GPB contract that gave them a stake in his entire career.