Phrenzie.com

Given that CD sales have been tanking, it was inevitable that labels were looking into getting more of the pie by structuring what are called 360 deals. Basically, labels would give more money as an advance to an artist, but get it back in recorded music sales AND concert tix, merch, advertising, etc.

360 deals are good for artists who can be called brands…maybe the music isn’t that good, but the artist is a character. 50 Cent is a current example. MC Hammer comes to mind too (although, back then, I doubt if he had a 360 deal).

Historically, artists relied heavily on concert tix sales and other non-recorded music sales to put money in their pocket, since the recorded music sales were subject to recoupment of the advance.

I would expect to see more 360 deals, within limit, since not all artists can be seen as brands (multi-talented who can act, perform well, pitch a product, etc).

What’s more interesting is that I would expect more labels to be acquiring non-label companies. Some labels are beginning to do this. One I know recently purchased a merchandising company to bring this function in-house. Imagine that labels would own businesses within the verticals…advertising companies, ticketing companies, merchandising companies, etc. As labels need to grow revenues and profits, acquiring a vertical that can be accretive to earnings immediately or shortly afterwards will be key and expected…barring any regulatory rules, that is.