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The 360 deal is the record label solution• If you lose close to 50% of total revenue in ten years while the cost of doing business is increasing….• No choice but to look for alternative revenue streams
Record label revenue• Music sales physical, digital, licensing and any future delivery forms
Artist income sources• Record royalty• Mechanical royalty• Performance royalty• Synchronization royalty• Merchandise• Ticket sales• Publishing• Sponsorships
The 360 deal is a record contract within a record contract• In reality it is a revenue sharing model
360 deal points• Label receives between 10% to 35% from all non-record sources• Always net income• Sources include: • Ticket sales • Publishing • Sponsorships • Merchandise
Good news for the artist this is a passive deal• You have the right to sign with any support company you desire, i.e. publishing company• Usually……
The label could “recommend” their publishing companyImage by Bob Smith cc
360 Deal Variations• 50 / 50 equity deal • Aggregate all label and artist expenses • Aggregate all label and artist profits • The difference is the net profit • Net profit is split 50/50
360 Deal Variations• 360 on steroids • Superstar deals • Madonna • Jay-Z • Signed with Live Nation received multi-million dollar advances
Is the 360 Profitable?• Potentially, but over time• New artist income (on average) is minimal the first few years• The 360 becomes profitable when the artist becomes profitable
Comparative Numbers• Traditional deal label makes approximately $5.00 per unit• Assume sales of 250,000• Revenue = 250,000 x $5.00 = $1,250,000
Add the 360 Deal Points• Label makes on 250,000 $1,250,000• Assume 360 deal at 25% of artist net income• Assume artist makes $500,000 in non-record revenue
Label Makes….$1,250,000 Record sales$ 500,000 Artist income 25% Label Royalty$ 125,000 To label$1,250,000$1,375,000 Total label profit with 360 deal
Leave you with this thought…• Success is what you believe it to be not what someone else believes!• We are very fortunate to be involved in music in whatever capacity• Dreams can start at any age!
• Image by Leslie Watts • Image by Leslie Watts