360 deal

My best explanation of why the 360 deal is bad

Tuesday, May 12th, 2009
by Mark Carras

My best explanation of why the 360 deal is bad

Ok, I talked about this once before, but I didn’t go into direct detail about why the 360 deal is so bad and anti artist. Last time was more about opinion. So here I will try to not only explain it all, but maybe show a more clear picture of why this is so bad for artists. First let me explain how things used to be done.

The old way record companies would do business was to sign a new band to a record deal where they would a huge advance and give the band a percentage of the profits for their cd sales. Sounds good right? Well, it does until you really look at what that means. Say for example you are given a loan of 500,000.00 for your business. Now let’s say that instead of you taking that money from the bank and spending it on the things you think your business needs to become profitable, the bank spends the money. They spend your loan and you pay it back. Pretty weak eh? It gets worse. The band’s not only have to pay back money the label spent, but while the label keeps 90% of the profits the band pays back the loan with their 10% cut. So out of that $20 a fan pays for a cd, the band gets nothing until they pay back every penny the label spent to promote them. Because the loan is being paid back with only ten percent of the profits, it takes decades for even well established bands. In the old days a great majority of bands would never see a single penny from any cd sales. It just didn’t happen. Unless a band went multi-platinum they never got a slice of that pie. Sometimes even bands with hit videos being run into the ground every day on MTV ended up in debt to their label.

So how did the band’s survive if they never made money from cd sales? For decades band’s survived strictly from touring and merchandise. Without those two sources of money most of your favorite bands would have never made it past album one. We are talking about less than one percent of the band’s that get that ever elusive record deal would have never made it without touring and merchandise money being all theirs. If a band made it over that hill to where they did make money from the cd, it was called “artist development”.

The 360 deal changes that! The 360 deal says that the poor record company isn’t making enough by taking every penny of 99.99% of every cd sale. Now they get a good chunk of the merchandise and touring as well. Artist development is now thrown out the window. If a band doesn’t become a major break out success right away they just disappear. The label own their ass until they pay off that “advance” (that’s really a loan), so they can’t do anything until that happens. It used to be that a band could at least tour like crazy if they wanted out of their unfair contract. Just keep touring until the label is willing to negotiate. Now even playing a show is under the contract. So the only thing they can do is break up.

So please encourage your favorite band to never sign a 360 deal. I hear Fat Wreck Chords like to talk smack about the 360 deal, so I love them for that. If you know of a label that is willing to stand against the 360 deal please let me know so I can love them too.

So what is so wrong with the 360 deal?

Wednesday, March 11th, 2009
by Mark Carras

So what is so wrong with the 360 deal?

For those that do not know what a 360 deal is, it is the current trend in record contracts. Labels try and claim they getting enough money from record sales (which many call B.S. on). So they now con the artists into giving up a large percentage of the tour and merch money as well. Many defend the record company saying that they have to make their money somewhere, but I ask why punish the artists? TechCrunch has some ideas on why the labels have no problem with this.

There is also something that I don’t think the industry has thought out. Artist development. For several decades at least artists have not made a penny on their cd’s. When the R.I.A.A. talks about protecting artists they really mean protecting the bottom line of the record companies. You know those big “advancements” bands brag about when they sign a contract? That and every penny the label spends on a band is a loan the band has to pay back. Without going into too many details (and having this article grow to a few thousand words), that loan is paid back by the band’s percentage. So if the band gets 10%, the label of course keeps 90%. The loan is paid back with the band’s 10% and they don’t see a penny until that loan is paid off. This normally takes decades at best. Most band’s never pay it off and then never get paid anything for their own music. The label takes 100% of the money a great majority of the time.

So how does the band get from town to town? How do they pay their rent and feed their family’s? Well, for just as many decades bands have survived from the money they make from touring and merch sales. You always wondered why Kiss has so much merch? Greed may be part of why it happens now, but I am willing to bet it was just Gene’s sense of survival in the lean years. So now that the labels are taking a chunk of that crucial survival money, bands will not have a chance to grow. Unless a band becomes a major hit overnight they won’t be able to survive those first few years. Most of your favorite bands toured for years with several albums behind them before they multi-platinum cd. They had a chance to fine tune their sound through a few years on the road. That won’t happen now because the 360 deal has killed off artist development.

So now bands will be more desperate to become a hit too early. This means more auto-tune, more pro-tools, and less true passion in our music. Music is going to get more sterilized, homogenized, and pasteurized so that there is nothing raw about it. Forget about meat and potatoes rock and roll, because the 360 deal is here and all personality will now be removed from all new artists.

In short, if your band signs a 360 deal you are part of the problem. You also suffer from something called Stockholm syndrome. You might want to get that checked.