THE BLOGRONAUT DISCUSSES 360 DEALS
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.