What Is A 360 Deal In The Music Industry, & The Pros And Cons Of Signing One

What Is A 360 Deal In The Music Industry

Artists are offered a variety of deals and opportunities every single day.

Unfortunately, there are plenty of legitimate looking businesses that simply prey on artists and their desire to become ultra-successful. Plus, email spam is commonplace in virtually everyone’s inbox unless you have amazing filters. Watch out for those just trying to get into your pockets!

But what would you do if a major record label offered you contract?

Many artists would jump at the chance, thinking it’s their ticket to stardom and wealth. Other, more calculated artists would likely carefully comb through the details of the contract to determine if it’s the best agreement they could hope for.

There isn’t necessarily a right and wrong answer, but if you don’t know what you’re getting into, you could end up making a regrettable decision, especially when it comes to 360 deals. Although signing a contract like this could help you advance your career, it also has the potential to harm it.

Here are the pros and cons of signing a 360 deal as an artist.

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What Is A 360 Deal?

There was a time when record contracts were much simpler. In the past, labels only took a cut of record sales and other revenue generating activities they were directly involved in. That’s not what a 360 contract is.

A 360 deal entitles the record label to a percentage of earnings from everything you generate as a band or artist.

With a multiple rights deal (which is essentially what a 360 deal is), labels can lay claim to a percentage of your: Digital sales, streaming royalties, merchandise sales, licensing and placement royalties, endorsements, songwriting, publishing revenue, advertising revenue, and virtually any other income stream you can think of. It even gives the label the right to acquire your copyrights.

In the past, there was something called an artist development deal. You don’t hear much about these anymore, because labels don’t generally want to wait for an artist to develop and reach their potential over the course of two, three, or maybe even four albums.  But labels also offered such contracts in exchange for rights to royalties or anything else that made the contract more beneficial to them.

Today’s 360 deal is a bit like an artist development deal from the past, except labels are far more upfront about the fact that they will have a finger in every pie. The upside for the artist is that in a 360 deal, labels will often act as managers, looking after your entire career and helping you develop as an artist.

This is mostly what it boils down to – 360 deals give labels a chance to sign artists they wouldn’t otherwise be able to, because they may not even have to recoup their investment if the artist fails. They can even keep working with the artist, after they’ve failed, if they see it as a worthwhile prospect.

Pros Of A 360 Deal

There’s a good chance you’re already starting to sort out both the advantages and disadvantages of a 360 deal in your own mind. But here’s a more detailed look at what makes 360 deals potentially worthwhile for artists.

You May Not Have To Cover All Your Own Costs

This is a bit of a subjective realm, because it depends on the contract.

With some record contracts, you might end up having to do a lot of your own promotion work and even foot most of the expenses.

This is where 360 deals are usually a little different. Many of your costs will be covered by the label, and they may even book entire tours on your behalf, although let’s be real – that’s just their way of saying “get to work”.

Naturally, you’ll save a bit of money not having to pay for a booking agent or your own merch. The label is more amenable to doing that since they make a percentage on everything you generate. But if your music flops, labels will do anything they can to recoup costs, leaving you with the short end of the stick.

You May Have The Opportunity To Develop As An Artist

Getting a record contract as a musician

As I was saying earlier, artist development deals are mostly a thing of the past, except with some independent labels. Most major record labels don’t want to take any major risks, and usually just sign artists who have their music, image, and branding in perfect order.

But a 360 deal is generally low risk for labels. If they choose to keep working with you after your first album and tour, it could mean they see the potential in what you’re doing and want to give you a fair chance at growing and succeeding.

Even if you never “hit it big”, the lessons you learn from working with a label could certainly be applied to a successful and even lucrative career as an independent artist. But if you see failure in a record contract as “the end of the road”, as many artists do, you’ll never get around to creating your own version of success.

The flip side of this is that you could be dropped by the label at any time.

Access To The Best People In The Industry

“Best” is always a subjective term, but since you’ll be signed to a major label, you will have access to experienced producers and engineers, and of course a marketing powerhouse.

Basically, you won’t have to worry about all the details. If they’re doing their job, the label should be helping you to get your music on the radio, book tours and manage your itinerary, find licensing and placement opportunities, and so forth.

Getting to work with industry luminaries is always an exciting prospect. This doesn’t mean you’ll get to choose who you work with, but you will be set up with people who know what they’re doing.

Cons Of A 360 Deal

To be fair, there are some significant upsides to a 360 deal, and there’s even the chance you’ll land on your feet, just as Paramore did.

But for better or for worse, the cons still tend to outweigh the pros in a deal like this. Here’s why.

Record Labels Take A Percentage Of Everything

This is not how standard record contracts work, though in these tumultuous times, “standard” is a bit of a moving target.

As I’ve already shared, one of the most prominent characteristics of a 360 deal is that labels claim a percentage of all the money you generate as an artist. In this contract, you’ll never truly be free to make your own money. If the income is attributable to your music career, then a piece of that pie belongs to the label.

Should you sign a 360 deal offered by labels?You should never enter a contract without knowing what you’re getting into. If you agree to these terms, then you can’t complain after the fact. You are responsible for your decisions.

I recognize that many artists see getting a record contract as the holy grail. But in many cases, it isn’t everything it’s cracked up to be. To be perfectly honest, some artists would do better as independents and might even have a better chance at success on their own terms staying independent.

But whatever you do, please review the contract and understand the terms and conditions. Note what percentage of your revenue the label will be keeping.

Record Labels Can Lay Claim To The Copyright

Over the years, some artists have fought for their copyrights, publishing royalties, and other assets.

The support of a label is appealing to the extent that they help and take care of you and advance your career. But when they agree to do this, there’s usually some kind of stipulation.

Again, it depends on the exact nature of the contract, but in some cases, you might give up the copyright to your music. That means the music does not belong to you, and you can’t do anything you want with it.

Certainly, you can still raise your profile as an artist in this situation, and that can work to your advantage down the line. You may even be able to fight to get your copyrights back later.

But just know what you’re getting into. You’re essentially giving up all the blood, sweat, and tears that went into creating and writing your music, even if temporarily.

You May Give Up Creative Control

Getting offered a major label contractThe exact nature of your contract may require you to give up creative control to the label, who will determine how your music should sound, what length each song should be, what production methods to use, and so forth.

Now, to be fair, it’s rare for a label to allow an artist to go on their merry way, producing whatever music they see fit. At the very least, they usually want someone from their team involved in the production process.

But in a 360 deal, it’s unlikely that the label will volunteer to be passive. Active participation is what they’re aiming for.

Is there room for negotiation? Absolutely. But this does not mean you will get what you ask for.

The best thing to do is negotiate the marketing. If the label is adamant about creative control and they’re taking a percentage of everything you make, you should turn around and ask them what they’ve committed to in terms of booking tours, how they intend to promote and distribute your merchandise, how they’re going to go about getting licensing and placement opportunities for you, and so on.

Basically, determine how they’re planning to hold up their end of the bargain. They should not have a finger in every pie if they’re not going to help you in those areas.

The Onus Is On The Artist

If your music flops, who takes the blame? The label?

No, in most cases it’s the artist that ends up paying the price. And pay the price you will.

In a 360 deal, it’s the label giving your career a cash injection. It doesn’t help that they take a percentage of everything you make, but in an instance where they can’t recoup costs, you’re probably the one going into debt.

I know I said that 360 deals are relatively low risk for labels, but they still don’t like losing money. If sales don’t meet their expectations, they’ll be happy to kick you to the curb.

They May Take Advantage Of You

This goes back to what I said earlier about artists who see record contracts as the holy grail.

If you’ve been at this for a while, you might have an amazing career already, and not even know it! You could be out-earning 80 to 90% of artists because of how you’ve been able to keep costs low and take charge of your own marketing.

But what happens when a label approaches you in this situation? Many artists would think all their hard work is paying off, and they’re finally getting the opportunity of a lifetime they’ve been waiting for.

You may be right, but you could also be wrong. You need to consider the size of your fan base, how many plays you have on YouTube, whether you’re getting airplay, and so forth. It’s not as though a record contract can offer you a great deal more if you already have a solid foundation.

If that wasn’t bad enough, labels can still drop you at a moment’s notice, although they probably won’t if they see you’re doing well and they just want a piece of the pie.

What Is A 360 Deal, Final Thoughts

I know I may have painted a bleak picture for 360 deals. But I don’t think I’m being unfair in my assessment. These types of contracts are skewed heavily in favor of the label and not the artist.

In some cases, a 360 deal might be the perfect opportunity for you to take your career to the next level. It has worked out for some notable artists, and I could never rule out that possibility for you.

But I would suggest treading with care. If you’re offered a contract, get an experienced entertainment lawyer to help you understand your obligations. This type of agreement should not be taken lightly under any circumstance. Get everything out on the table before you sign a contract.

P.S. Remember though, none of what you've learned will matter if you don't know how to get your music out there and earn from it. Want to learn how to do that? Then get our free ‘5 Steps To Profitable Youtube Music Career' ebook emailed directly to you!

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