As the digital revolution has taken hold over every industry in the past 20 years, companies have had to adapt. Thanks to the digital revolution, 360 record deals helps record labels stay relevant today.

360 record deals allow a record label to receive a percentage of the earnings from every activity a band partakes in. Other contracts just pay a percentage from sales of a recording, or from money-making activities that the record label actively has a hand in.

360 record deals have become pretty popular among the major record labels because record sales just aren’t what they used to be – thanks to the popular rise of streaming.

Recorded music generated about $14.5 billion in revenues in 1999, but that dropped to approximately $7 billion by 2012.

Balance Careers

Money may not be pouring through the door with record sales, but an artists’ tour will bring them in significant profit. Not only touring but artists and bands also make money via their own merchandise and even endorsements. People, consumers, fans – whatever you want to call them – just aren’t buying up CDs and music like they used to.

How Do 360 Record Deals Work?

360 recording contracts, otherwise known as “multiple rights contracts”, allow record labels to receive an income that would not have been available to them in a “typical” record deal.

These new revenues that 360 record deals allow a label to receive include:

• Digital sales
• Merchandise sales
• Revenue from tours and live performances
• Endorsement deals
• Appearances in movies and television shows
• Songwriting and publishing revenue

360 record deals allow a label to tap into royalties for publishing, touring, merchandising and other sources of revenue that were previously owned solely by the artist

What Do the Labels Do in Return?

In return for access to all of these income avenues, record labels promise to promote the band or artist for a longer time. And they’ll actively look to create opportunities for the artist too. This means that a record label in question operates as a manager of sorts for the band or artist. One that looks after the career of the band/artist, instead of focusing on selling records only.

A 360 record deal allows a record label to acquire the copyrights of the artists’ recordings, as well as options for multiple album recordings. Like traditional record deals, a 360 deal features agreements from locations and regions, producer royalties and net sales, deductions for packaging, etc. that see an artist’s royalties reduced.

Under a traditional deal, an artist would only receive royalties for record sales. The cost of producing the album and other fees were deducted from the artists’ royalties, and an artist could only really expect royalties if their album was a commercial success. Now, 360 record deals allow a label to tap into royalties for publishing, touring, merchandising and other sources of revenue that were previously owned solely by the artist.

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