The Pros & Cons Of A 360 Record Deal

People often talk about things when they aren’t fully aware of all the details. I have heard people say 360 deals are good and they are bad. How many people actually know what a 360 deal is?

In this post we will give you a proper explanation and definition of a 360 deal, as well as the pros and cons.

First thing is first, the 360 deal has really taken off since CDs stopped selling as much. Back when artist sold millions of records the artist would get maybe 6 to 12 cents per record sold. The rest of that money went to pay the record label and pay the people that worked the project (producers, engineers, label staff etc). Today artist are lucky if they sell over 500,000 copies as opposed to years ago when they sold millions.

Record labels had to adjust because they weren’t making as much money due to downloading, Itunes and the economy. They came up with a plan to do more of a management/partnership so to speak but that comes with a price. They are willing to do more for you in a 360 deal, but that’s because they want to make more money off of you.

According to The American Bar Association, “360 deals are contracts that allow the record label to receive a percentage of the earnings from all of an artist’s activities rather than just earnings from record sales.  360 deals, also called “multiple rights deals,” are contracts where the record labels earn a percentage of the artist’s ancillary rights. 

Ancillary rights may be the earnings made from: concert revenue, merchandise sales, endorsement deals, and ringtones.  In exchange for receiving a larger percentage of the money made by the artists they represent, the labels say they will commit to promoting the artist for a longer period of time and will actively try and develop new opportunities for them.  Essentially, the record label will serve as manager and look after the artist’s entire career rather than focusing only on selling records.”

In layman’s terms, the label owns a part of everything you do from endorsements to t-shirt sales, but they are willing to push you more and give you more exposure. Let’s give a real life examples of how this works.

A$AP Rocky

Reportedly, A$AP’s 360 record deal is worth 3 million dollars.

That’s not $3 Million in his pocket, that’s $3 Million that cover a ton of costs. Basically, the record label fronts A$AP $3 Million for him and the ASAP MOB, which they eventually have to pay back.

How does he pay it back? Shows, Merchandise, Record Sales, Endorsements and More.

If a record label is going to invest that type of money in you, they are more inclined to push your career. They have more of an invested interest in you, because they put more money behind you. Have you ever wondered why certain rappers pop up more than others? The ones that you see more are the ones the labels are heavily invested in.

Signing A 360 Deal

Lets look at the pros and cons of signing a 360 deal:

  • Pro:Label invest more money into you which means they invest more time into you
  • Con: You have a debt over your head that you have to pay back.
  • Pro: More exposure on different platforms. Record labels are subsidiaries of other companies, if you sign to Universal you technically have access to anything under their umbrella (movies, TV shows etc)
  • Con:  You might have to appear in certain things or places you might not want to be a part of.
  • Pro: Labels are more hands on with your project and your career
  • Con: Labels are more hands on with your project and your career (less freedom)
  • Pro: More opportunities for merchandise, endorsements etc
  • Con: Labels take a big cut out of anything that you do

Steve Rifkin whose signed artist such as Wu Tang Clan, Big Pun, Mobb Deep and more explains his thoughts about 360 deals.

Steve Rifkin says, “I don’t believe in 360 deals that much unless we really do something for you. And I think that’s just the record business of getting their piece when they break an artist. I have no problem with taking a piece when I do something for an artist. If I get them a brand deal, a tour, [a] publishing deal, then I feel I deserve a piece. I don’t feel as if I deserve anything if I don’t bring anything to the table.

So would you rather do less work, more exposure and take less pay? Or would you rather do more work, more pay and less exposure?

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Mike Trampe is a rising media entrepreneur, promoter, speaker, and accomplished marketing & social media director. Also known to the industry as “Mic Vicious”, he has made a name as the “go-to person for your go-to person.”
  • LouisianimaL337

    salute…always good to get info on the business side of the game for the indie & up & comin artists

    @Official_aone

  • Evan James Ramsey

    So when an artist’s debt is paid, (ex. asap rocky has 3 million of his revenue returned to the label) does the label continue to take their percentages after that number has been reached? And does the artist make any money (income) before that debt is paid?

    • Zac Redhands Shull

      It depends on the deal but that 3 million is just a loan. Once that is paid off then asap rocky and crew start to make money. Most likely the label are still making a percentage of everything but Asap and crew will start to turn a profit as well since they paid the debt.

    • Tristian Bolongia

      Yes, because it is a “360” deal they continue to make money off of you regardless of an advance being paid off. The key to signing to a 360 deal is to limit the scope/duration of it and only taking it after you have already made enough money to live off of without the label otherwise you become a slave. Also is beneficial if you are unknown. Independence is where it is truly at and in the age of streaming and iTunes (where most money is made) it is better to be indendepent. Merchandise is also where the majority of money comes from so if you have a 360 deal imagine the label taking 50% of that. As an Independent artist you keep more of it to yourself.

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  • https://youtu.be/rFASjIg7sGk Schyl Perry

    If the artist takes money on a 360 deal upfront yet over a period of time cannot meet the goals to payback the upfront money, will the label eventually place a lien against the artist?

    • Morgan

      The artist does not need to pay back the money that the Label invests in them