Hip Hop News: The Music Industrys 360 Deal Takes a 180 Tur (2024)

This is a guest editorial by Reshaun Finkley, an attorney at Townsend & Lockett. Finkley has worked with numerous recording industry artists and musicians. He can be reached at [email protected].

For years, the music industry has lived largely on the 360 deal. This exclusive contract between a label and an artist has allowed labels to take a share of an artist’s revenue from music, merchandise sales, TV appearances, concerts, publishing, and even ringtones.

Basically, the 360 deal means the label gets a piece of everything. And for the longest time, artists didn’t seem to mind.

JAY Z got a reported $152 million 360 deal with Live Nation in 2008, a 10-year deal that included his album sales, publishing and licensing deals, and other external acquisitions and investments. Drake subsequently got an even bigger payday — a $400 million deal that Variety dubbed “a 360 deal on steroids” — with Universal, including recordings, publishing, merchandising, and visual media projects.

But this industry norm has been under attack recently, as more artists apply the new Taylor Swift standard when negotiating their contracts. Swift’s highly publicized fallout with Big Machine Records and eventual owner Scooter Braun led her to re-record her first six studio albums — allowing her to own the new masters.

Now, artists are pushing harder than ever to emulate Swift and control the ownership and destiny of their work product. They have come to view record labels as predatory, taking more than they deserve from every facet of an artist’s business.

Today, more artists want to own their masters, publishing, sync and merchandising rights, and control the length of licensing rights to their recordings. That means artists are pushing back against deals that give the label or distribution company rights in perpetuity to their music catalogue.

This has resulted in distribution deals that look more like partnerships between artists and their labels, with an agreed-upon split that encourages artists to — among other things — put out more music consistently, start a label and distribute their music, and create strategic brand partnerships within and beyond the entertainment industry that would not have been feasible or financially lucrative under an old 360 deal.

This new deal structure also allows artists to re-record old songs and get a greater percentage of the sales than they would typically receive under their original record deal. By replacing “in perpetuity” with shorter licensing terms, artists can regain ownership of their masters after recouping whatever the distribution company spent promoting an album or album.

Not surprisingly, the record labels aren’t rolling over. They still want to own the masters in perpetuity. They still want to receive a hefty percentage of the artist’s business and will only take a haircut when dealing with the biggest artists, such as Swift.

Labels also want more albums — not less — as part of a contract. That means at least three or four, with very few one- or two-album deals. They also seek to control when the next album can be released, prohibiting an artist from putting out new music for many months until the label recoups its latest album's outlay. Nine months seems average, with labels not bending much on this negotiating point.

And because most artists are not Taylor Swift and will not get a chance to re-record an album they don’t own and call it Taylor’s Version, they only have so much muscle to negotiate. For them, the terms of the next deal will likely be dictated by their personal financial situation and whether they want to risk what may be a one-time shot at fame and fortune.

They don’t have the luxury of going back and forth with the record label. But if they find the fortitude to fight back, greater ownership and control of their music may await them.

Reshaun Finkley is an attorney at Townsend & Lockett, where he has worked with numerous recording industry artists and musicians. He can be reached at [email protected].