360 Deal Case Study

Superior Essays
The evolution of music distribution has impacted the way people consume music today. With the new ability of obtaining music for free, whether if it is legally or illegally through numerous file sharing sites, record labels have been put in a special situation where they have to come up with new ways to gain profit beyond record sales, their main source of profit in the past. In a new type of record deal, the 360 Deal, the hassle of investing millions of dollars into an musician’s career to get a mediocre return in today’s music business has a potential of being decreased. In Southwestern University’s School of Law professor, Edward Pierson, article Negotiating a 360 Deal which was published in the American Bar Association’s law review Entertainment …show more content…
In Pierson’s article it is discussed how this major decline in record sales has started as early as 2000, along with many failed investments of trying to launch an artist. Pierson says, “The anti-360 advocates will argue the advances, resources, and ability to deliver success and results are also diminished in the downsized recorded music companies of today and in an age when the pie for all musicians may be smaller; thus, it is unfair for the labels to now demand a greater share, especially in activities where they may offer little expertise or resources,” (Pierson 1). Both sides of the 360 Deal argument come to the similar understanding that the music industry is not what it used to be when the business was more lucrative, and today companies are trying hard to gain every dollar …show more content…
For example, it is not always the case that the record label is required by law to take a certain percentage out of the touring income made by an artist. Even though the numbers are not always the same there is a general understanding about the keys to the contract. According to Pierson there are three general keys to a 360 Deal contract; the first key indicated is what the revenue sources are. Another key is which costs will come off the top in calculating the label’s participation. The third key is for how long the label’s participation in the artist’s career

Related Documents

  • Improved Essays

    Technology began to advance rapidly and the record labels could not keep up starting from the 60s to the 2000s with the development of tapes, where people recorded radio, and later the invention of the CD. The labels were scared because they were losing control of the public with burnt CDs and mixed tapes made essentially free. During these years there were five major labels: Sony, EMI, Universal, BMG, and Polygram. As the years proceeded into the 2000s, labels bought out other labels because they were losing so much revenue. Now, 2014, there only stands three major labels whereas the others have been absorbed.…

    • 2138 Words
    • 9 Pages
    Improved Essays
  • Improved Essays

    Music Piracy Effects

    • 1293 Words
    • 6 Pages

    This idea of trading or sharing has put top music executives and artist, along with other music business partners, in a tough holding. Illegal downloading has categorized music as a commodity and not an art, thus creating this difficult way of life for the creators of it. New technology means new laws, at least I think. Many try to give justifiable reasons to why they can download illegally, but these actions have left the music industry with less funds and opportunities for artist development and new talent. Starting in the late 1990s till now, consumers of music have become very cost-effective.…

    • 1293 Words
    • 6 Pages
    Improved Essays
  • Improved Essays

    Author James D. Torr states that leaked albums mean “More sales for musicians that might otherwise never have been heard of” (Torr 5). Record companies still worry, as they don’t notice the extra sales. Torr also states that “the real gripe for these record companies and some artists is the fictional “lost sales,” but the sharing is cheap publicity” (Torr 5 ). The record companies may fret, but they secretly love the publicity. Writer Jason Koebler found that “A new study by a researcher at North Carolina State University suggests that frequently pirated albums sell slightly more copies than one that aren’t” (Koebler 1).…

    • 919 Words
    • 4 Pages
    Improved Essays
  • Great Essays

    The music industry has lost over $12.5 billion to music piracy (Adkins), making it clear that the intellectual property laws in place are not adequately doing their job. Although some people have faced the legal consequences of music pirating, there are just too many people getting away with it. We need to change how people ethically and morally think about the issue and I believe legal streaming services can do this. In 2012, a study was released stating, “the number of music files being illegally downloaded was 26% less in 2012 than in 2011. What’s more, 40% of the people surveyed in the study who said that they’d illegally downloaded in 2011 did not do so in 2012” (Knapp).…

    • 1456 Words
    • 6 Pages
    Great Essays
  • Improved Essays

    So I have mixed feelings about Napster being an online tool to share music and it being a way to steal music. Inevitably I agree with what a gentleman in the documentary said, which was somewhere along the lines of how the artists and record labels should have adapted and adjusted to the new technology instead of fighting it. I strongly agree with that statement mainly because of the fact that after Napster was created, there was no stopping this new way to share and download free music. I look at it like this, artists and record companies could sit around and mope and spend millions of dollars on attempting to stop this or adapt and to find a way to use it to their advantage. Napster definitely created a new kind of pressure on the artist…

    • 773 Words
    • 4 Pages
    Improved Essays
  • Great Essays

    While this does help the artist in a way Spotify is stingy with how they pay the artist through the streaming service. For every song that is streamed the artists receives $0.007 per stream (Streaming Reaches Flood Stage: Does Spotify Stimulate or Depress Music Sales? 2015). Spotify and other music streaming sites are a great way to put file sharing to a hold but it would help the musicians more if their music was paid…

    • 1501 Words
    • 7 Pages
    Great Essays
  • Improved Essays

    Therefore, having paid music creates a motion of revenue regarding the people involved in making songs. This can lead to a healthy and well stimulated economy. Overall, proponents need to understand the importance of the song revenue to the American economy. In conclusion, the issue regarding legalizing free music downloads has reasonable arguments for both sides. However, the enactment of this proposal can be devastating to thousands of musicians and the American economy.…

    • 620 Words
    • 3 Pages
    Improved Essays
  • Improved Essays

    Movie Piracy

    • 1055 Words
    • 4 Pages

    In that sense, I suppose that I would consider it stealing. The music is not mine, I acquired it for free, and someone is technically at a loss because of my actions. Many would make the argument that these artists, music producers, and music companies would still be well-off without the contribution of paying $1.29 or $0.99 on iTunes or another music buying site or application, which may be true, but it is still taking from someone 's livelihood, in most cases. Although these artists make exponentially more revenue out of a few tickets to a concert, a dollar is a dollar, and legally (and ethically), it is not right to take one from…

    • 1055 Words
    • 4 Pages
    Improved Essays
  • Decent Essays

    Terika Bunch Ms. Ridley-AVID 1A 30 November 2016 Music & Money How do music artists increase their revenue? There are many ways music can bring money in. There are a few strings attached depending on what road you take. Some ways could possibly bring in more money than others. Music artists get money from getting record deals.…

    • 1632 Words
    • 7 Pages
    Decent Essays
  • Great Essays

    Selle Vs Gibb Case Summary

    • 1338 Words
    • 6 Pages

    If the decision would have been ruled differently, Selle would have been impacted greatly with the royalties that he would have collected. On the other hand, would it have affected the Bee Gees? Maybe a little financially, but this wouldn’t have stopped them from writing big hits. Seeing this from a thriving musician standpoint, one can come to the conclusion that the little guy is more than likely always going to lose against those bigger than us. That goes to show how the industry has worked for the last several decades; however it is slowly changing for the…

    • 1338 Words
    • 6 Pages
    Great Essays

Related Topics