The 360-degree Deal and other Music Business Models
The 360-degree deal
Essentially this is just a recording contract, however in addition to the artist granting his exclusive rights to exploit his recordings to a record label, he also grants to the label rights to either control ancillary rights or share in other income streams, including publishing, live performances, merchandising, sponsorship and endorsement deals. For this reason the 360 model is sometimes also known as an ‘all rights’ deal, and a similar deal where publishing rights are excluded is also known as a ‘270-degree’ deal.
Why do record companies want ancillary rights?
Record sales have been on the decline for years, so some say that record companies needed to find a way to ensure they are still profitable. The primary cause of declining record sales arose due to the availability of music on the internet which could be downloaded unlawfully free of charge.
Should artists give away these ancillary rights?
It is not only major record companies that enter into 360-degree deals but also smaller independent record companies. Any artist offered such a deal needs to weigh up the benefits he will receive by giving away additional rights and an interest in ancillary income. The record label will need to show they have a good business plan and that the deal is not just a convenient way to make more money without some effort or for no justified reason.
Other business models?
Some artists will be unwilling to grant rights in their recordings especially where they have made or paid for those recordings themselves. Investors may be willing to advance funds for recording costs in consideration of a return of their investment and an additional right to share in any income from subsequent exploitation. Artists and investors can therefore enter into joint venture agreements, as co-directors and shareholders, allowing them more control over releases and sharing of profits. Often production companies are set up in this way – and once finished ‘master’ recordings are produced, the artist and investor can agree to licence these on to a major recording company to take advantage of their far reaching distribution teams and well connected marketing and promotional departments.
Seek legal advice first
Before signing any music business agreement it is vital that you seek specialist legal advice. We can help:-
- record companies to decide the best type of deals to offer to performing artists, taking into consideration their size, budget and experience; and
- artists who are offered any deal – who need advice on whether the terms offered are fair and if not your options on how to improve the offer without jeopardising the deal itself.
Contact us
Chris Phillips and Mike Shepherd who head up the Media and Entertainment department here at Bolt Burdon are experienced lawyers used to negotiating and advising on all relevant business models.
To find out more, and how we can represent you, please contact us on 0207 288 4700