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| | | Free distribution of music need not signal the apocalypse for record labels. Already recording contracts are being altered to place greater emphasis on alternative revenue streams. The most well-known new model is the “360 contract”, under which labels take a percentage of profit, typically 30%, from all income streams available to the artist. Three sources of revenue are of particular interest: touring, merchandising and licensing. | |
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< | Yet the move to 360 contracts may present a significant risk to artists. Signing a record deal always requires an artist to balance important considerations – an artist must decide whether the advances, financial backing, and marketing support are worth relinquishing control over his or her artistic product. Before 360 contracts, touring, merchandising and licensing were areas left largely in the artist’s control. Not only did this mean a greater share of profits, but also a greater ability to manage an artist’s own brand. Under a 360 contract, however, artists are required to forsake even this limited control, something that any emerging artist should be loathe to do. And control over one’s career should be a concern of every artist, a concern heightened by the recently approved nuptials between Live Nation, which helped spur the move to 360 contracts through its deal with Madonna, and Ticketmaster, the dominant (if not monopolistic) seller of concert tickets. While such a deal may make sense for established artists with bargaining power, new artists, and fans of diverse music, should be frightened by a single entity that would largely control concert venues, tour promotion, merchandise production, ticket sales, and, through Live Nation’s parent Clear Channel, radio access. It is inevitable that record labels will be unable to maintain any real control over the distribution of music -- live music, however, has limited availability, and it certainly not ideal to have one entity control so much of it. | >
> | Yet the move to 360 contracts may present a significant risk to artists. Signing a record deal always requires an artist to balance important considerations – an artist must decide whether the advances, financial backing, and marketing support are worth relinquishing control over his or her artistic product. Before 360 contracts, touring, merchandising and licensing were areas left largely in the artist’s control. Not only did this mean a greater share of profits, but also a greater ability to manage an artist’s own brand. Under a 360 contract, however, artists are required to forsake even this limited control, something that any emerging artist should be loath to do. And control over one’s career should be a concern of every artist, a concern heightened by the recently approved nuptials between Live Nation, which helped spur the move to 360 contracts through its deal with Madonna, and Ticketmaster, the dominant (if not monopolistic) seller of concert tickets. While such a deal may make sense for established artists with bargaining power, new artists, and fans of diverse music, should be frightened by a single entity that would largely control concert venues, tour promotion, merchandise production, ticket sales, and, through Live Nation’s parent Clear Channel, radio access. It is inevitable that record labels will be unable to maintain any real control over the distribution of music -- live music, however, has limited availability, and it certainly not ideal to have one entity control so much of it. | | |
- Madonna does the deal in order to partially annuitize her business, and get the money out upfront. She is, to say the
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