360 deals: the latest music industry rip-off
If anyone needed further evidence that the major labels are in league with the devil, now comes news about “360 deals.” Driven to desperation by declining CD sales, record companies are requiring new artists to sign these contracts (also known as “multiple rights deals”) that take a percentage of every single thing the artist does: merchandising, ticket sales, paid appearances, interviews. Any band which signs such a deal might as well consider changing their name to Faust.
For decades, record companies have been content to “steal” the creative products of musicians. Not only do they typically take ownership of the songs through owning the recording master as well as the lucrative copyright and publishing, but they charge the artist for the costs of production, artwork, manufacturing, publicity and anything tangentially related to the album. Prince famously wrote “slave” on his face during his lawsuit with Warner Bros. to protest this kind of treatment. But 360 deals make these old arrangements seem downright generous.
Capitol Music Group CEO Jason Flom, in one video, arrogantly justifies 360 deals by claiming that “nobody knows who they [artists] are” and “we turn them into stars.” That’s a little disingenuous, since major labels typically don’t sign artists unless they have a successful track record selling CDs and concert tickets. He laughingly acknowledges that any of today’s superstars would scoff at signing such a deal (although Madonna and Jay-Z already have). But don’t expect a new artist to get a break upon becoming tomorrow’s superstar. At best, the artist would be able to negotiate a lower percentage of the 360 deal, as attorney Kendall Minter describes in the YouTube video below.
So what’s next, your first-born son?
For more info, see the TechCrunch article, “360″ Deals Become Mandatory as Labels Prepare for Free Music.
[...] industry response to lower revenues has been to Squeeze the artists tighter! ….. 360 (or multiple rights) deals are now being signed with new bands, where the record [...]
Very interesting. I had always understood that the music industry had some pretty one sided deals in reference to how artist get paid. It really pays to understand how the animal works. What does this mean for the artist? How can they better navigate the business side. I believe many would be willing to do more if necessary. Mr Minter explains that they already have to do quite alot after a deal has been made. Its too bad the artist doesn’t have some sort of hourly contract limit or increase in profit sharing. It sounds like the industry generally gets the artist to do unlimited hours of work for contract price with no overtime paid. How they get away with that?
This is a general industry theme, artist will screw other artist. I performed in a band called Blue October in 2002 – 2003, recorded and toured with them. They were a Universal Music Group signed artist. Then after less than a year they decided we weren’t working out. So one of the managers gets his girlfriend to play in place of me. OK fine I wouldn’t want to force them to use me but here is the problem. I was getting paid as a band member for at 5 or 6 months of our engagement. Band members got paid a stipend of like $1000 a month. I was out on the road working just like every other member getting paid the same. The music was on a major movie soundtrack – American Pie, American Wedding . They sold some album for History For Sale. Where was my cut? I worked as a band member, was paid as a band member. The music industry seems to get away with more than the should be able to.
So in essence the music industry ,Universal Music Group and the band can make mistakes. Most businesses are held to the fire by some state entity. If they perform bad business practices such as this they can be punished or made to pay by the state. Is this the case for the Music Industry?