The music industry is an intricate web of contracts, agreements, and legacies. As an upcoming artist, it’s crucial that you understand each document you sign, especially a 360 Artist Contract. This contract isn’t just an agreement; it’s a relationship you form with a record label or management company. Let’s delve into each section to understand what you’re signing up for.
If you need a contract template, please see our free 360 artist contract in word and pdf.
What is a 360 deal?
A 360 deal, also known as a “multiple rights deal,” is a business relationship between an artist and a music industry company, typically a record label. The company agrees to provide financial and other support for the artist, including direct advances as well as support in marketing, promotion, touring, and other areas.
What sets a 360 deal apart from traditional record contracts is the scope of the agreement. In a traditional record deal, the record company primarily makes its money from the sale of the artist’s recordings. But in a 360 deal, the company has a stake in all aspects of the artist’s career. This can include:
- Recorded music: Sales of albums, singles, and other recorded music.
- Live performances: This might involve income from touring, live appearances, and merchandise sales.
- Ancillary revenue: This can include a cut from endorsements, sponsorships, and licensing deals, including use of music in films, television, advertising, and video games.
- Songwriting, publishing, and royalties: Income generated from the writing and publishing of songs.
- Other activities: In some cases, 360 deals might also include revenue from an artist’s acting, book publishing, and other entertainment-related activities.
Why is a 360 deal important?
The 360 deal is important for a record label for several reasons. Firstly, the music industry has changed significantly with the advent of digital music, streaming platforms, and social media. The decline in physical and digital sales means that record labels have had to find new revenue streams, and 360 deals offer a way to do this by taking a percentage of all of an artist’s earnings, not just their record sales.
Additionally, by being involved in all aspects of an artist’s career, the label can better align all efforts toward a common goal, potentially leading to a more successful, better-promoted artist. It also ensures that the record company is compensated for its role in building the artist’s career, even if the bulk of the revenue comes from non-recorded music activities.
Critics argue that 360 deals can be exploitative, taking too large a share of an artist’s earnings for too long and limiting their freedom. It is crucial for artists to understand these contracts fully and to consider getting professional advice before signing such a deal.
Access our Free Sample of a 360 Artist Contract Template.
Explanation to each part of the 360 artist contract
Introduction
What it Is: This section sets the stage for the rest of the contract by identifying the parties involved— you (the Artist) and the Company (usually a record label or management company).
Example: If you’re an independent hip-hop artist named “Jane Doe” and you’re signing with “Big Time Records,” this section would clearly state those names.
Implications: Make sure the names and entities are correct. Mistakes here could lead to legal issues down the road.
Term
What it Is: This specifies the duration of the contract. You agree to work with the company for a defined period, often several years.
Example: If you sign a contract for a three-year term starting from January 1, 2023, the contract will expire on December 31, 2025, unless renewed.
Implications: Understand your commitment. Leaving before the term could lead to financial penalties or legal consequences.
Scope of Services
What it Is: This is a list of all the services the record label or management company will provide.
Example: This could range from music production and distribution to marketing, merchandise management, and even financial planning.
Implications: Make sure the services align with your needs and career goals. A mismatch can stall your growth as an artist.
Compensation
What it Is: This section outlines how you will compensate the company for their services, usually as a percentage of your revenue.
Example: If you agree to give 20% of your streaming royalties, then for every $100 you earn, $20 goes to the company.
Implications: Read this part carefully. Sometimes the percentages can add up quickly, leaving you with a smaller piece of the pie than you anticipated.
Expenses
What it Is: Here, the contract specifies what expenses the company can deduct from your income before calculating your share.
Example: If the contract allows the deduction of recording costs and you spent $1,000 on a studio session, this will be deducted before dividing the revenue.
Implications: Keep tabs on expenses. Unchecked, these can eat into your earnings, leading to less income than you expected.
Intellectual Property
What it Is: This segment identifies who owns the rights to the music and other artistic works you create.
Example: In most cases, you retain the rights to your music, but the company has permission to use it for certain purposes outlined in the contract.
Implications: Always strive to retain your IP rights. Losing them could mean losing control over your music.
Termination
What it Is: This clause states under what conditions either party can end the contract.
Example: If there’s a material breach like the company not promoting your album as promised, you may have grounds for termination.
Implications: Understand the termination process and the conditions that must be met to initiate it. This could save you from a long-term commitment in an unsatisfactory relationship.
Governing Law and Jurisdiction
What it Is: Specifies which laws will apply if there’s a legal dispute.
Example: If your contract states that New York law applies, any legal actions would have to be initiated there.
Implications: Know the jurisdiction as it can affect the convenience and cost of potential legal actions.
Amendments and Waivers
What it Is: This outlines the process for making changes to the agreement.
Example: A written approval might be required to change a service listed in the ‘Scope of Services’.
Implications: Any changes should be formally documented to avoid misunderstandings or legal issues later.
Entire Agreement
What it Is: A statement that this contract supersedes any previous verbal or written agreements.
Example: If you had a handshake deal before signing this contract, the terms of this written contract will replace that earlier agreement.
Implications: This is often the final word in any disagreement, so make sure you agree with everything written in the contract.
Counterparts
What it Is: This allows for the contract to be signed in multiple copies, each being equally valid.
Example: You sign one copy in New York, and your record label signs another in Los Angeles.
Implications: Simplifies the process but make sure you have a copy of the contract signed by all parties for your records.
In conclusion, 360 Artist Contracts are far more than just pieces of paper; they’re foundational documents that can make or break your music career. Understand each clause, consult with legal advisors, and negotiate terms that align with your artistic vision and financial goals.