No. 64: 360 Deals Make Heads Spin

Dec 11th, 2008 // 2 Comments

AP080510014964.jpgIn the current rough climate for recorded music, those companies that were involved in this business of music decided to get creative with their revenue stream—and no avenue of creativity was more popular than the 360 deal, in which companies signed artists to deals that encompassed not just income from recorded music, but merchandise, touring, publishing, and other potential money-making paths as well. Concert-promotion behemoth Live Nation went the “big, splashy deal” route, signing the likes of Madonna and Jay-Z to deals that were valued in the hundreds of millions at the time; Warner Music Group was so into the whole 360 idea, they even signed deals with dead people!



The advantages of the deals for artists weren’t always immediately apparent. Oh sure, they were for artists like Madonna and Jay-Z and Nickelback and Shakira, whose previous achievements allowed them to nab huge checks in advance of their future earnings on tours, t-shirts, and ringtones. (OK, maybe not that last one.) But for greener artists like Paramore, the monetary benefits were a bit more dubious—especially in a year where it seemed harder for new artists to break out than ever, and the recessionary economy put the hurt on ancillary revenue streams like concerts, merchandise, and fan-club memberships.

And as quickly as 360mania grew this year, it may already have started to taper off. Fawning profiles of Live Nation head Michael Rapino aside, the company experienced a bit of a shake-up earlier this year, when the 360-happy exec Michael Cohl resigned and took a “consultant” post. The Zac Brown Band, one of the few smaller bands to sign to Live Nation Artists, severed its relationship with the company earlier this year—although it did jump to the 360-friendly Atlantic, and the statement heralding their signing, while it didn’t get into specifics, did mention their “grassroots base.”

Of course, there were some 360 deals that were failures right out of the gate—recall the tale of Charles Ray Fuller, the would-be mogul who tried to cut himself a $360 billion check from his girlfriend’s mother’s ledger in hopes of launching his own music enterprise. Naturally, he got nabbed, but surely that sort of moxie and willingness to play around with other peoples’ money should have at least netted him a phone call from Live Nation?

80 ’08 (and heartbreak)

idolator

  1. Anonymous

    Rapino is perfectly positioned here. He will take credit for any success and run from any failure – blaming Cohl.

  2. 360 deals were a good try by record companies to expand their avenue of revenue. Its certainly nice to see this level of creativity. They may have to come up with a few more strong ideas in order to stay relevant.

Leave A Comment