360-degree model - Artist Management and labels

Today, consumers attach no direct value to music anymore, because the way how they get new music changed through technology. In the past, music labels generated most of their income by selling records. An artist released a record and went on tour to stimulate sales. Today, consumers listen to new music on YouTube, Facebook or via subscription services. Many young people share their favorite music online or copy gigabytes of music to hard drives. Music lost its value and labels have to find new ways to earn money with their artists. Nowadays, most labels sign artists "360-degree". Besides the right to use the recordings of the artist, the record label participate in other income streams, including publishing, live performance, merchandising, sponsorship and endorsement deals. For this reason the model is also known as an "all rights" deal. If the publishing rights are excluded, it is called a "270-degree" deal. It is often necessary to sign such a deal because marketing investments are high and a label only invests, if investments can be recouped. Another way is, to produce music on an independent label and license it to a major label. In this case, it is possible to sign a package & distribution (P&D) or master licensing deal without giving the label a piece of everything, the artist earns. A typical breakdown of the 360-Degree record deal for new bands can look like this:
"Label gets approx. 90-95% of record sales. / Label gets approx. 10% of touring income. Label gets approx. 10% of merchandise income. / Label gets 9c publishing cut per song (or more, depending on media distribution)" Unknown, U. (2008).
Established artists often sign 360-degree deals and receive huge advances. Madonna received a 80 million advance from Live Nation in 2007 for giving them 360degree rights. When independent labels sign 360-degree, they need to have a good business plan and success in their past business operations to convince an artist about the benefits of their label. Its a huge commitment for artists to sign 360 degree.

References:

Phillips, C., & Shepherd, M. (2010). The 360-degree Deal and other Music Business Models. Retrieved October 1, 2011, from: http://www.boltburdon.co.uk/en/Business%20Clients%20Bolt%20Burdon%20Solicitors%20London/Media%20and%20Entertainment%20Bolt%20Burdon%20Solicitors%20London/The%20360%20degree%20deal%20and%20other%20business%20models.aspx

Unknown, U. (2008). 360 Degree Music. Retrieved October 1, 2011, from: http://brettgoldberg.wordpress.com/2008/01/11/360-degree-music/

Meyerowitz, J. (2009). 360 Record Deal. Retrieved October 1, 2011, from: http://www.podcomplex.com/blog/why-360-degree-deals-wont-turn-the-music-industry-around/