THE BLOGRONAUT DISCUSSES 360 DEALS
Tuesday, November 3rd, 2009 at 2:00pm by Sacha Dunable
I understand that the music industry as we’ve known it is in somewhat of a bind. The ease of “illegal” downloading coupled with a crappy economy has cut off much of the flow of income a record label is built to generate. In this position, any sensible business would find a way to adapt in order to survive.
Last week I read about a certain metal label trying out something called a 360 deal, where instead of mainly collecting revenue from record sales or other intellectual property rights (publishing, licensing, etc.), the record label takes an agreed-upon cut of merchandise, concert ticket sales, and I suppose just about anything else having to do with the band. Actually I’m sure deals like this already existed, but this label got even more “WTF” with it and announced they would be giving this new band’s album out as a free download. I honestly think this is a great idea. Giving away the music for free since it holds little value to consumers, then sending the band on tour and collecting a decent percentage off nightly guarantees and t-shirt sales since people still pay full price for those – going where the money is. Sure, it’s a business.
What confuses me is how any band would be ok with this. They signed to a record label who isn’t actually putting out or distributing a record. They’re promoting intangible recorded material so that there’s a reason for the band to tour and sell stuff for them, while the band makes even less money on the things they would have been sustaining themselves on in an old school record deal. So, why do you need a record label then?
I don’t want to say that record companies are on their way to being obsolete. Some of my favorite people in the world are employed by or own labels, and I actually love the one my band is signed to. I just think this idea needs to be fine tuned a bit, because really, once you take the physical music product out of the equation, the label is really not doing anything the band couldn’t do on their own.
Think about it, you don’t need a big budget to put out a record anymore. You know you have a friend with computer recording software in a garage who can make you sound less terrible than you really are. Also, people these days rarely listen to anything other than MP3s — through computer speakers even — so there’s going to be very little noticeable difference between your project recording and Metallica’s Black Album at this point. Then you have to make it available to the public, free of charge. Does anyone out there not know how to do this?
Promotion? Banner ads on sites like Metalsucks, or print ads in metal magazines aren’t as expensive as you might think. Touring? The very fact that you are promoting yourself in national publications will probably get you in with a booking agent, as long as your band isn’t horrible. If it doesn’t, there is myspace. And if in 2009 you can’t book a tour through the internet, then there is seriously no hope for you anyway.
Most new bands will only earn something like $100 a night as a guarantee on tour opening for someone who draws 50 people on average (44 of them won’t even watch your band), and then the booking agent takes 10%. Can you imagine a label taking another 20? What about if instead of ordering your shirts from the manufacturer for $4, you have to buy them from the label for $8? Do you raise the price of shirts for the six people who watched you at the show who probably wouldn’t pay more than $10 for your shirt?
I think my point is that if labels are going to switch to this sort of deal for future signings, young bands aren’t going to have anything to sustain themselves on and are going to get fucked financially while trying to make their band work and its going to turn into a disgusting situation where bands are trying to out-haircut and crabcore each other in order to be successful and everything meaningful in music that hasn’t already died will die. If music isn’t going to be paid for anymore it’s time for bands to take their future into their own hands and do everything else themselves. I’d be curious to see the contract, but I’m pretty sure that anyone who signs something like this is 100% retarded.
I’m open to debate or to discuss this with anyone who has questions (or anyone who can enlighten me) in the comment section.
-SD
I agree with this.
To quote Lord Gold, “I think I would describe the state of music today as ‘clowns who sell clothing to people.’” I would characterize this as a succinct description of a baffling change of circumstances.
Arthur Von Nagel touched on this a few weeks back; specifically, the question, “What are labels good for anymore?” I meant to ask him to discuss his views on the issue further. Thank you for covering your thoughts on the matter in your space, and I hope you get some really good feedback in the comments section, so I can get schooled as well.
I was also reading in *Terrorizer* magazine about a digital-only label run out of New England. The label owner had some really interesting thoughts on what role labels can fill in the music industry – if they can manage to adapt to changing circumstances. I’ll dig that up tonight and post more details, hopefully to facilitate more discussion. I’d like to get feedback on that guy’s ideas, too.
For my part, the only use labels have for me anymore is to enable my favorite artists to make their work available for my consumption – and it seems questionable that they will continue to serve me in that capacity. I already no longer need them to scout new talent and introduce me to new artists. On the whole, it pains me to think that anyone thinks music itself doesn’t have any value anymore, simply because technology makes it possible to acquire it for free. There simply HAS to be another answer.
that lord gold comment is so right on, and will become a reality if the business ends up revolving around selling shirts.
I think the idea that the “music” industry may soon rely on selling things that aren’t music isn’t really as silly as it sounds.
Take for example, the webcomics industry. I read an awful lot of webcomics, and a lot of the bigger ones’ authors do it for a living. That’s right, they draw silly pictures on the Internet, as their full time job. They’ll never be rich, but they’re comfortable middle class. A lot better than most touring musicians, that’s for sure.
How do they do this? They sell merchandise. They get some revenue for advertising on their site, but the biggest piece of their pie comes designing and selling pithy t-shirts.
It might not be the greatest thing in the world, having to divert a large part of your time away from what is ostensibly supposed your job as well as your passion and your art to design t-shirts, sell t-shirts, package them up and mail them around the world. But you know what would suck more? Competing with thousands of other comics to gain distribution to newspapers through syndicates, and then have to answer to said syndicate about your content. To censor yourself, to always be under deadline pressure.
Instead, these guys write and draw whatever they want and answer to nobody. They’re beholden to only their consumers, and even then only sort of.
Does this sound familiar?
You might not want to say it, but record labels certainly are on their way towards becoming obsolete. I don’t think that labels will ever disappear, but today you don’t need a label funding your band – for the very reasons you stated. People will probably continue to use labels (I say they are becoming obsolete, not that they will become obsolete), but the recording and touring climate today is incredibly different than it was just ten years ago.
I completely agree with this. In the beginning, my band was open to looking at record companies wanting to sign us. Once we actually started generating money on our own, a few labels came forward with offers. Once we looked these offers over, we realised that they werent doing anything that we weren’t doing ourselves (and still wanted a 30% cut). In fact, after we rejected such a deal, we had some music placed in a video game add. Had we signed with a label, they would’ve taken 30% of our hard earned money for not doing a thing!
At this point in our “career”, we are trying to stay as independent as possible. With the way labels have been hosing musicians in the past, we’d rather build up our fanbase organically rather than rely on shitty marketing techniques that are going to do nothing but put our faces in front a people who don’t give a shit to begin with. Everything is accessible now, so if a band can’t make it work on their own, they’re going to be in for a dose of hard reality if they expect to move up the ranks of the musical heirarchy.
Sasha, i’ve enjoyed Prehistoricisms stoned many of times. Can’t wait to hear what you dudes are cooking up! Congrats on the India trip! It looked like a lot of fun.
there you go. through years of experience i’ve noticed that quality music made by people with half a brain will almost always yield positive results. of course, not everyone knows how to “work it” and thats where a label could still be useful.
good deal man.
Labels will continue to offer a few things.
First, they’ll act as tastemakers. Given the lower barriers for entry, more and more people are saying “fuck it, I want to be in a band”. Even with the ease of sharing and finding out about new music, the signal to noise ratio is low enough that bands need help connecting with their intended audience. When people know that they like the music a label puts out, they’ll naturally pay attention to a new affiliated act.
Second, while it’s easier to market and record music, it is still more expensive and time consuming to do it right rather than just do it. Labels should develop the marketing expertise to know where to spend money on a particular act. Maybe your money isn’t best spent on a Metalsucks banner ad, maybe it is. How do you know? (Note: the “you” here isn’t directed at the post’s author.)
As for recording, there are still plenty of bands who are aware of the ease and lower cost of DAW based prosumer recording and yet spend money to have someone record it for them in a real studio with high quality equipment. True, most of those who listen may not care much. But the level of permanence and satisfaction of a higher quality recording is worth the expense to the band and at least some of those who listen to their music.
Which leads us to product – some folks still want a physical copy of the band’s music. Although it’s tiny in absolute volume, there has been a significant percentage increase in vinyl sales over the past two or three years. The relationships, expertise and money that a label has will be worth it for some bands to partner up to get their product made and distributed.
The margins and business model for running a record label are tighter than they ever have been, but smart labels will figure out how to provide the stuff I’ve mentioned here and not get caught up in trying to preserve the way that things have been. I suspect you’re probably right about the merch cut business model – it’s just not going to be worth it for bands. But there are still enough real steps between the people who play music and the people who listen to music that those who facilitate the recorded product should be able to make some money if they do it well.
One thing that’s very good about this turn of events, though – given how high the expectations are for a label to deliver in the face of obsolescence, labels that are shitty to their bands will have a much harder time surviving. A few dumb bands will sign away into jackass deals that fuck them out of existence, but when the dust settles, those labels that treat their bands fairly and release good music will probably survive. The others will be hard pressed.
= Justin
really jusin foley?
Austerity Program Justin Foley, not Killswitch Engage Justin Foley
Some guy in Killswitch Engage has the same name I do. I did not know this.
Anyway, yes to what D Boon said.
= Justin
Nice. Especially like your last paragraph. Let’s hope that comes to fruition.
This is bang on I think. Labels need to evolve more into music marketing companies. Not so much reaping the profits from the actual products, rather being paid to promote them. Partnerships with bands who wish to be involved in doing this stuff is an interesting idea as well.
PS. ‘obsolescence’ that’s a word I can get behind. lol
Exactly. However, that in some ways, supports the concept of the 360 deal.
“First, they’ll act as tastemakers.” I agree. I was thinking the same thing about Southern Lord. Labels like that will always survive because they love music, they make great product, and they know more about the music than many fans do. Their like the bug light of music labels: people are drawn to them. A band could be relevant today, or 10 years after they broke up, but if you’ve never heard of them, it don’t mean shit. Labels like Southern Lord (or even what Relapse did with Pentagram) help keep the music relevant and exposed to the fans.
i agree with this completely BUT, there is still a place for record labels, obviously. as long as they do their part with regards to promotion, recording budgets, and tour support, i still think it’s possible for labels to continue to exist. i think a lot of labels have screwed up their priorities and have really forgotten that it’s their place to help and support bands. there are some labels that have done a really good job with supporting certain bands, and it shows – not just in record sales, but also with regards to (if i can use some a&r scum lingo here) “taking them to the next level.” there are, honestly, certain markets & promotion budgets that are just out of reach for the independent band, so it really only makes sense to partner with a bigger label if they can help establish you in those markets. but still, even asking for NOTHING whatsoever seems a little extreme. is it too hard to put up a paypal button suggesting that if people like it, they should donate some money? i don’t know. maybe i have my head up my ass on that one.
but like other people have stated here, you really have to ask yourself what you feel a label can do for you and whether or not it’s necessary. thanks in no small part to the internet, you have the world’s largest record store/distribution network at your fingertips. i would think the hardest thing is to get people to pay attention to your music, but as long as you’re out there, harassing the right people, it’s not impossible.
The thing i think labels will still be used for in the future is funding big projects, like if a band wanted to use a full orchestra on their album, it is highly unlikely they will have the funds to pay for that on their own without a loan. So a lot of those bands that have big ideas will probably go for the label so they can get their ideas out. But for bands like mine where we don’t need any extra people to play or record our albums since we have the knowledge and equipment, we can do it on a minuscule budget which we can easily just cover ourselves. And if we want it to sell it in stores we will just secure a distribution deal and promote it ourselves, like what was mentioned above, banner adds and other advertising are a lot cheaper than people think.
But I think we will stick to giving them away for free online, and for the cost of the plastic and packaging for the physical product at shows, plus shipping if it was ordered.
You’ll just “secure a distribution deal?” It’s that easy, ya think?
It is. I simply sent Relapse and The End Records copies of my album, said “Hey guys, could you distribute?” They said they liked the album and agreed. Now you can buy Metazoa from both of them. It’s that easy.
The music industry is not rocket science. You just have to ask.
I have a lot of problems with this statement
“Promotion? Banner ads on sites like Metalsucks, or print ads in metal magazines aren’t as expensive as you might think. Touring? The very fact that you are promoting yourself in national publications will probably get you in with a booking agent, as long as your band isn’t horrible. If it doesn’t, there is myspace. And if in 2009 you can’t book a tour through the internet, then there is seriously no hope for you anyway.”
this is a huge over simplification. First off, internet advertising is not very effective from my experience. Print advertising in reputable magazines is incredibly expensive for independent bands. This concept that it’s easy for unsigned bands to book a real tour through myspace is a myth. The “touring” reality for unsigned bands is playing in front of 2 people at bob and willie’s corner bar in ashville ohio.
These internet myths and exaggerations have been going on for years. Unsigned bands are not taken seriously. Established Record Labels give bands credibility and connections that unsigned bands can not get on their own.
I’m not so sure. Think about how huge a social networking site like say Facebook is, I believe sites like that are powerful tools. I see lots of bands doing lots of promotion on there, building a fan base and getting real face-to-face interaction with their fans. As long as bands are up-to-speed on Social Networking, and promote themselves well in that way, it can be an extremely powerful medium for them. Connecting with other acts as well can also prove very beneficial in organizing tours. Combining fan bases together is another possibility, and the ease in which information can be shared across the world is at an all-time high. It’s never been easier than it is right now to reach anyone anywhere in the world.
They are powerful and important, but Erik is more right on to be honest. And Sascha also seems to insinuate getting an agent is easy, as well.
This is exactly the kind of thinking that got record labels behind the times and in trouble in the first place.
“…out hair cut and crabcore each other” is the new metalsucks meme.
The merch is worth more than the album?
What a joke.
I have already seen t-shirt printing machines that you hook up to your computer. People will be downloading the the t-shirt graphic and making their own t-shirts for about $2 each.
Who is going to go and see a live band in an overpacked venue with shit views and sounds when we can download the HD DVD version of the concert which I can watch in the comfort of my $10 million dollar home theater.
Get real…
The record labels are doomed.
The only thing that will save the industry is increased internet connection rates and a massive recession.
You will never see a home t shirt printing application that can do what you can on a t shirt. Not to mention more elaborate merch.
Fuck. Eighteen years old and I’m already a dinosaur, bemoaning the loss of the physical album.
“Back in my day”, I complain at the twelve-year olds, “Music was available in CD form for those dedicated few cultists who gave a shit about presentation, and who were actually willing to spend money on something that someone else had spent money making. Sure, people stole, but only 99% of them did.”
Although I will probably, hypocrite that I am, download this album when it emerges, and not buy a copy. Truth be told, I only buy albums I absolutely must have, like Death’s.
Having worked in college radio and seeing how many millions of dollars in promos record companies are willing to send out, it doesn’t surprise me that the labels are trying to recoup some of that cash from merch and tour revenue. It’s all politics I suppose. When can we expect a new Intronaut record though? “Prehistoricisms” is going to be hard to top!
>Implying that the internet is killing the music industry
To Mr foley-
You’re right about certain labels that have a “brand loyalty” thing going on. There are still a few out there who I still follow and keep up with due to a history of good output. However, this is not the norm, especially with labels who would be likely to adopt a cd-less 360 deal M.O. earlier than the rest, so I can’t see this being the be all end all.
Also to reiterate, I’m not saying there’s no need for record labels, as long as we’re still selling music.
erik-
To clarify the touring thing, of course a no name band is going to have trouble going out and blindly booking a tour. But if you are at all active in your scene by going to shows, meeting other bands, and especially helping out of town bands with places to stay, the right promoter to contact etc, its easy to create a network so that when you self release an album and your band isn’t garbage, those people will gladly return the favors. Ask any successful band who wasn’t put together by a management company and they will tell you this is just as important as writing good music.
I love the all American can do spirit, but in reality, it sounds like throwing a handful of sand at the ocean. The amount of energy it takes to successfully market a band is no simple operation. The concept of playing weekend warrior regional gigs amounts to nothing. Independent bands and musicians as a whole are strapped with so many distractions, adding a concrete marketing campaign on top of trying to be a real band is next to impossible.
The idea of being independent is enticing. Keeping 100% of the profit is ofcourse ideal, but 100% of negative 10,000+ dollars will destroy anyone.
It’s very possible for wealthy people to be independent and bypass the “evil” record labels. Every media outlet, agent, and producer can be bought, but most people (especially metal musicians) will never have that type of disposable income. This is where record labels are worth their weight in gold.
“I love the all American can do spirit, but in reality, it sounds like throwing a handful of sand at the ocean.:
-I’m sure it is, with that attitude!
” The amount of energy it takes to successfully market a band is no simple operation.”
-no shit, if it were easy then every shit band you knew would be as big as lamb of god!
“The concept of playing weekend warrior regional gigs amounts to nothing.”
-completely untrue. if you are going out and playing new places, you will get new fans. this rule is of course void if your band is not good.
“The idea of being independent is enticing. Keeping 100% of the profit is ofcourse ideal, but 100% of negative 10,000+ dollars will destroy anyone.
It’s very possible for wealthy people to be independent and bypass the “evil” record labels. Every media outlet, agent, and producer can be bought, but most people (especially metal musicians) will never have that type of disposable income. This is where record labels are worth their weight in gold.”
-everyone in your band bought guitars, amps, drums etc right? I mean everyone has spent some money just to be able to plug in and rock. if you have four members in a band, splitting up costs like that gets a lot easier.
I think there is a reason that 99% of bands choose to sign with a record label once they’ve proven themselves to be a force independently.
It’s because 99% of bands can only go so far independently and NEED a record label to help them get to where they want to be with their music “career”.
It all sounds like a massive shit sandwich and every musician in metal that isn’t super famous today has to take a big ol’ bite out of it. It’s damn near getting to the point where you say fuck it, might as well just stay at home, write and record some shit, put it on the internet for free and that’s the extent of being a metal musician. Pretty fucking sad, wish I was in my twenties in the mid 90’s when you still had a fucking chance.
Cool, I just realized I posted right below Sacha. Hey mang, Intronaut is bad ass!! I’m a big fan.
Thanks Marc! I know how discouraging this can be but good music will always be rewarded in some form or another.
By the way
It’d be funny i it weren’t so disgusting, the growing popularity of 360 deals with labels.
As Sascha said, it’s tantamount to abuse for an artist. It’s great for labels, yeah, that’s why they’re doing it.
It’s just kind of hard to believe that labels are so short-sighted and stuck in their ways that their reaction to the way the music industry is changing is to come up with something that screws people even more.
Hopefully the only good thing about this deal is that it will hasten the already inevitable demise of these fuckheads. Good Riddance.
“people these days rarely listen to anything other than MP3s — through computer speakers even — so there’s going to be very little noticeable difference between your project recording and Metallica’s Black Album at this point”
This is the stupidest crap I have ever read in my entire life !
It’s completely and 100% accurate.
“It’s completely and 100% accurate.”
… yeah it is true if you are the kind of guy who cannot spot the difference between a 2kbps and a 320kbps !
Anyway …
Yeah, and that’s about 95% of the music buying public.
yep! it’s sad but true. plus with DAW recording, it’s very easy to polish any turd.
I’ve foundt that many computers do not play back mp3s correctly. There is something really skrewy with a lot of soundcards altering the mix by tucking the vocals, leads, amplifying effects etc. I’ve had 2 computers that really alter the mix of recordings even at 320 kps. I put the cd into a true car stereo or a real stereo built for cds and it sounded as it should. Anyone else have this problem w/ playback on computers?
This is pretty much exactly what I was thinking when I heard about this last week. Why the fuck would any small metal band sign to this kind of deal? It’s the sleeziest shit I’ve ever heard of.
The 360 deal doesn’t have to be a negative for artists. I don’t know the details of any existing contracts but if the artist was treated more like an employee that earns a regular pay-check and benefits instead of a contractor I can see the deal working out quite well.
On its face it seems this could be a viable model for a label. Hire bands as employees and when they aren’t busy with touring or recording they could work in the office helping promote the other bands on the label or in the warehouse shipping merch. Hell, what about an employee owned and operated label with that type of model? Of course it would never work what with all the ego’s getting in the way but it’s a nice little pipe dream.
There’s not a single indie label on the planet that could bankroll 200+ employees from 50+ bands.
I was thinking on a much smaller scale. But yea, wouldn’t work with any sizable label. Like maybe four or five bands putting together a label and working for it.
Plus it’s not as though existing labels that have a few bands on 360 deals will want to do the same for their whole roster. I’m just thinking that if a band got a steady paycheck from these deals it might be worth it to them.
Actually that does remind of what a lot of very small/local independent labels do, f’rinstance, labels like SST or Touch and Go in their early days.
Of course the bands are usually doing it because they’re friends with the label owner or they just have a strong belief in wanting the label (and by extension, their band) to succeed, rather than any formal employer/employee relationship.
correction -”….instead of BEING a contractor…”
Vinyl is back. If your band is going to be putting out vinyl than it might not be such a bad idea to have some kind of arrangement with a label. Cd’s need to become obsolete. Waste of fucking materials. There’s enough trash as it is. Charging money for mp3’s is pretty ridiculous if you ask me. Everyone should release their album for free. It’s no longer a ‘product’, but an advertisement for you band.
The 360 deal definitely is pretty retarded unless all you care about is being famous. The more money a label can make off you, than the more they’ll put into promoting you. This doesn’t necessarily equate to any financial gain for the artist, but it does give them a lot more exposure. If that’s all you care about than go ahead and take that 360 deal and hope that they throw in some vaseline. Which they probably won’t, but at least you can write it off on your taxes.