European Journal of Cultural

Studies
http://ecs.sagepub.com/

The 360 deal and the 'new' music industry

Lee Marshall
European Journal of Cultural Studies 2013 16: 77
DOI: 10.1177/1367549412457478

The online version of this article can be found at:

http://ecs.sagepub.com/content/16/1/77

Published by:

http://www.sagepublications.com

Additional services and information for European Journal of Cultural Studies can be found at:

Email Alerts: http://ecs.sagepub.com/cgi/alerts

Subscriptions: http://ecs.sagepub.com/subscriptions

Reprints: http://www.sagepub.com/journalsReprints.nav

Permissions: http://www.sagepub.com/journalsPermissions.nav

Citations: http://ecs.sagepub.com/content/16/1/77.refs.html

>> Version of Record - Jan 21, 2013

What is This?

Downloaded from ecs.sagepub.com at University of Bristol Library on January 21, 2013

457478
2012
ECS16110.1177/1367549412457478European Journal of Cultural StudiesMarshall

european journal of
Article

European Journal of Cultural Studies

The 360 deal and the ‘new’

16(1) 77­–99
© The Author(s) 2012
Reprints and permission:
music industry sagepub.co.uk/journalsPermissions.nav
DOI: 10.1177/1367549412457478
ecs.sagepub.com

Lee Marshall
University of Bristol, UK

Abstract
In the last few years the so-called ‘360 deal’, in which record labels receive a portion of income
from revenue streams such as merchandising and publishing, have become increasingly common
in the recording industry. However, the most publicised 360 deals have been made not by labels
but by Live Nation, the world’s largest live music promoter, and some have argued that the
emergence of the 360 deal reflects a shift in the balance of power within the music industry. This
article provides an overview of 360 deals, discussing their emergence and overall structure as
well as arguments for and against the 360 approach. It examines the broader implications of the
360 deal, concluding that the current situation of the major labels may not be quite as bad as is
commonly perceived, and that the 360 approach may help them manage the challenges that they
have faced in the last decade.

Keywords
360 deals, Live Nation, multi-rights deals, popular music, recording industry

The recording industry has been in a well-documented state of upheaval since the start of
the century. With income from the sales of recorded music falling by approximately 40
percent since 2000 (International Federation of the Phonographic Industry (IFPI), 2011),
the four major record labels which dominate the sector (EMI, Sony, Warners and
Universal) seem particularly vulnerable, and some commentators have questioned the
long-term viability of selling recorded music (e.g. Wikstrom, 2009). The transformations
in popular music production and consumption made possible by internet technology go

Corresponding author:
Lee Marshall, School of Sociology, Politics and International Studies, University of Bristol, 11
Priory Road, Bristol BS8 1TU, UK.
Email: l.marshall@bristol.ac.uk

Downloaded from ecs.sagepub.com at University of Bristol Library on January 21, 2013

78 European Journal of Cultural Studies 16(1)

beyond merely the selling and buying of records, however, with the nature of popular
music stardom itself changing under the influence of advanced branding and marketing
techniques. These broader transformations are affecting the ways in which record labels
negotiate contracts with their artists. In particular, the last few years have seen the emer-
gence of the ‘360’ or ‘multi-rights’ deal, in which the record label participates in and
receives income from a range of musical activities beyond the sales of recordings. These
new contracts are a clear reflection of the changing nature of the popular music economy
but are also part of the wider discourse regarding these changes given that the most pub-
licised 360 deals have been concluded not by labels but by Live Nation, the world’s
largest concert promoter. In contrast with the fortunes of the recorded music industry, it
is commonly argued that live music is experiencing an economic boom at the moment
(e.g. Bintliff, 2010), and the 360 deals that Live Nation has struck with, for example,
Madonna and Jay-Z, have been used as evidence of a shifting balance of power
within the music industry.
However, this situation may not be so clear-cut. Considered in a broader historical
perspective, the prevalence of the 360 deal demonstrates important historical continui-
ties as well as change, and in this article I will outline and contextualise the signifi-
cance of the 360 deal. The article begins by discussing the emergence of this new type
of contract, before considering the relative positions of Live Nation and the major
labels. It then offers more fine-grained detail on the nature of 360 contracts and the
arguments for and against their use. Finally, the article examines the implications of
these new contractual relationships, concluding that the major labels’ situation may not
be quite as bad as is commonly perceived, and that the 360 approach may help them
manage the challenges that they face.

The emergence of the 360 deal

Robbie Williams and EMI, 2002
Although the deal between Williams, one of the biggest stars in Europe, and EMI was
not an actual 360 deal and occurred before the 360 had been conceptualised as such, it
was an innovative deal that garnered much media attention and offers a significant
precursor to deals later in the decade. In this instance ‘the deal’ was actually two sepa-
rate deals, the first of which was a fairly standard recording contract, albeit one with
an advance and royalty rate befitting Williams’ superstar status: Williams received
£25m to £30m in advance for his next two albums (the already-recorded Escapology
and a ‘Greatest Hits’ package), with another £25m to £30m advance for a further four
albums (including one more greatest hits). It was the second part of the deal that makes
the Williams deal an innovative precursor to the 360: unlike a conventional recording
contract in which the record label receives a proportion of income generated by record-
ings only, Williams agreed to share some of the income generated by his activities
outside of recordings. An independent company, In Good Company, was formed to
manage these income streams, reported in the media as including TV specials, mer-
chandising, publishing, touring, sponsorship and ‘other areas’. The company was part-
owned by Williams and EMI on a 75/25 basis.

Downloaded from ecs.sagepub.com at University of Bristol Library on January 21, 2013

Marshall 79

EMI received significant press criticism for this deal. Following in the wake of a
number of high-profile contract buyouts, including paying Mariah Carey a reported
$28m to never record for them again (Billboard, 2002), the Williams deal was portrayed
as yet another example of recording industry extravagance and profligacy. The value of
the deal was widely exaggerated, and it was incorrectly assumed that the deal relied on
Williams breaking America to be profitable for the company. In reality, it was quite a
sensible one for EMI and, according to Wadsworth, ‘went into profit for EMI pretty
quickly’ (Forde, 2010: 66). It also showed a considerable amount of foresight in seeking
revenue streams outside of record sales, the significance of which other major labels
were slow to realise.

Korn and EMI, 2005; Korn and Live Nation, 2006

EMI were still leading the way when in 2005 they signed a deal with Korn that bears
more resemblance to a 360 deal. The deal covered a two-album and touring cycle period,
and provided Korn with a $25m advance for which EMI received 30 percent of all of
Korn’s income until 2010. It is not clear that this deal was as successful for EMI as the
Williams deal. Given that Korn received 70 percent of net profits from their record sales
(far in excess of any conventional royalty rate achievable by even a superstar artist),
profitability relied heavily on Korn’s touring schedule, and it was expected that Korn
would perform roughly 100 shows per tour (Garrity, 2005).
However, the significance of Korn in the development of the 360 deal lies in a sec-
ond deal that they signed a few months later with Live Nation. Live Nation paid Korn
$3m, plus a share of concessions and parking fees at Live Nation venues, in return for
a 6 percent share of Korn’s income from touring, licensing, publishing, merchandising
and record sales. This deal received little media coverage at the time – certainly less
than the deal with EMI – but with the benefit of hindsight, it seems significant, with
Live Nation conceivably using the Korn deal as a pilot project to test its new strategy
of moving beyond tour promotion. By acting as a ‘dry run’ for negotiating with artists
on areas other than live concerts and for getting a sense of the practicalities of licens-
ing, for example, Live Nation would have learned from this relatively small deal as it
eyed bigger catches.

Madonna and Live Nation, 2007

The Madonna deal was a big deal in every sense. Most obviously, the amounts of money
involved were very high. However, this deal was also symbolically significant. First, it
brought the concept of the 360 deal into public discourse. Second, and more signifi-
cantly, the fact that a star as influential as Madonna signed a deal with a tour promoter
rather than with a record label was understood to reflect major changes in the music
industry, demonstrating that the major labels were becoming much weaker. As Madonna
noted, ‘the paradigm in the music business has shifted’ (BBC, 2007).
The deal was widely reported as being worth $120m, although the full financial
details were not disclosed. Reportedly, Madonna received 1.2m Live Nation shares
(worth approximately $24.5m), a $17.5m signing bonus and a $17m to $20m advance

Downloaded from ecs.sagepub.com at University of Bristol Library on January 21, 2013

80 European Journal of Cultural Studies 16(1)

per album for at least three albums. According to Live Nation CEO Michael Rapino, in
return for their investment, Live Nation would receive a portion of ‘everything that
Madonna will do music-related over the next ten years, anywhere in the world, including
touring, private events, studio albums, DVDs, film [and] TV’ (Ashton, 2007: 2).
However, given its outlay, the proportion of income that Live Nation will receive may
not be as high as expected. Reportedly, Madonna will retain 70 percent of merchandising
income, 50 percent of licensing income and up to 90 percent of touring income.1 The
economics of this deal seem risky for Live Nation, particularly as the deal does not obli-
gate Madonna to tour. It is by no means certain that Live Nation will make a direct return
on its investment, and it is notable that the value of Live Nation’s shares dropped sharply
when the deal was announced (Karubian, 2009). However, it can be argued that for Live
Nation this deal was not merely about the bottom line; rather, that it served broader sym-
bolic purposes in establishing itself as a major player in the new music industry, in gain-
ing a figurehead for demonstrating its new strategy, and in acquiring a prestige artist who
would attract other artists to the company.

The rise of Live Nation

Live Nation’s new strategy involved the formation of a new division, Artist Nation,
which, according to its press release, ‘redefines the music industry with [a] unified rights
model’, its stated goal being to ‘partner with artists to manage their diverse rights, grow
their fanbases and provide a direct connection to fans’ (Live Nation, 2007). Artist Nation
consists of five major divisions: recorded music; merchandising; fan sites and ticketing;
broadcast rights and digital rights management; and sponsorship and marketing. It is
notable that music publishing is absent from the list. Publishing has been declared as not
a priority area for Live Nation, which is interesting because music publishing is com-
monly perceived to be one of the most dependable forms of music revenue in the uncer-
tain digital future. It is also worth noting that although Artist Nation has a recorded music
division, it lacks the infrastructure of a major label, especially in relation to the distribu-
tion of recordings. One repercussion is that Live Nation will have to license records to
one of the major labels for distribution. For example, Roc-Nation, the label established
by Jay-Z and Live Nation, has signed a deal with Sony to distribute its releases. These
distribution deals, likely to be completed on a case-by-case basis, will cost Live Nation
roughly one-third of the wholesale income of the record.2
To achieve its aim of becoming a ‘one-stop shop’ for artists in managing their touring,
merchandising, fan sites and so on, Live Nation has been aggressively acquiring compa-
nies with expertise in relevant areas. The most notable acquisitions are listed in Table 1.
Acquisitions have centred mainly on merchandising, online fan clubs and ticketing, and
have occurred simultaneously with the more widely-publicised merger with Ticketmaster.
It seems likely that Live Nation’s strategy involves bringing ticketing and online fan
clubs together in more targeted ways (for example, in the promotion of VIP fan packages
for concert attendance).
Alongside these company acquisitions, Live Nation also concluded a small number of
360 deals with other headline artists. Most notable among them was a $150m deal with
the hip-hop star Jay-Z. This gained much media attention due to the value of the deal and,

Downloaded from ecs.sagepub.com at University of Bristol Library on January 21, 2013

Marshall 81

Table 1.  Notable Live Nation acquisitions 2006–2008a

Date Organisation Business Clients

July 2006 Music Today Online store Client list includes more than 500
acts, e.g. Dave Matthews Band,
The Rolling Stones, John Mayer,
Kenny Chesney, Bonnaroo,
Christina Aguilera, Eminem and
AC/DC
April 2007 Trunk Merchandising Client list includes AC/DC,
Aerosmith, The Beatles, Blondie,
Jimi Hendrix, Pink Floyd, The
Grateful Dead, The Rolling
Stones and David Bowie
September 2007 Ultrastar Online fan clubs Client list includes The Police,
Genesis, The Rolling Stones, The
Who, Red Hot Chili Peppers,
Sting, Mariah Carey and
Katharine McPhee
October 2007 Signatures Merchandising Client list includes The Beatles,
Network U2, Justin Timberlake, Bruce
Springsteen and Kanye West
aLiveNation’s acquisitions did not end in 2008. For example, in 2010 it acquired or took major
stakes in 14 new companies (Peoples, 2011a).

like the Madonna deal, the magnitude of the artist involved. However, the deal is inter-
esting because alongside payment for Jay-Z’s own music (a $10m advance per album for
a minimum of three albums, plus $20m for other rights such as licensing and publishing),
the deal also involved the establishing of Roc-Nation, a joint venture which is effectively
Jay-Z’s own record label. To finance Roc-Nation, Live Nation provided $25m to cover
overheads for five years, and $25m for artist acquisitions.
Between March and July 2008, other major deals were signed with U2, Nickelback and
Shakira, although the agreement with U2 was not technically a 360 deal as it did not cover
recordings. However, it was a substantial agreement, with Live Nation agreeing to provide
the band’s website management, tour promotion and merchandising for 12 years. The deal
with Nickelback was comparable to the deal that EMI had signed with Korn three years
earlier: Live Nation paid $50m to $70m for a share of 12 separate rights for a three-album
and three touring cycle period.3 The deal with Shakira was for a similar amount and for a
10-year period covering ‘tours, recordings, sponsorship and merchandise’.4
This rash of signings in 2007 and 2008 meant that Live Nation had notable figure-
heads in pop, rock, hip-hop and Latin. The publicity surrounding these signings, contex-
tualised by widespread commentary on the decline of the recording industry, meant that
Live Nation was clearly presenting itself as the future of the music industry. The follow-
ing slide, from a Live Nation investor presentation, shows its vision of how the music
industry will develop. In it, rather than the record industry being at the centre of the
music industry, live music (and thus Live Nation) will now be the core (Figure 1).

Downloaded from ecs.sagepub.com at University of Bristol Library on January 21, 2013

82 European Journal of Cultural Studies 16(1)

Figure 1.  Slide from Live Nation investor presentation

Note: In Live Nation’s new model, music publishing does not exist.
Source: Live Nation investor presentation, Goldman Sachs internet conference, Las Vegas,
NV, 22 May 2008. Available at: http://phx.corporate-ir.net/phoenix.zhtml?c=194146&p=irol-
calendar#2008 (accessed 26 September 2008).

The reaction of the major labels

EMI excepted, the major labels demonstrated an initial reluctance towards the 360
model. Shortly after taking over at Warner Music Group in 2004, Edgar Bronfman Jr said
of deals such as Williams: ‘I’m not convinced it’s in my best interests. I’m presuming I
have to give up something to get something’ (in Goodman, 2010: 256). Presumably,
Bronfman felt that he was better off holding on to the most profitable part of the music
industry: CDs. Conventionally, the production and especially the distribution of CDs
have been the area of the music industry with the highest profit margins (with profit
margins in the mid-twenties, compared with 5–7 percent in the live industry; Woods,
2009). The format was largely responsible for the recording industry’s boom during the
1990s, with major labels increasingly stripping away other facets of their companies in
order to specialise in CD manufacture and distribution. Although CD sales had declined
in the first few years of the 21st century, labels argued that this was caused primarily by
piracy, and that the decline was a blip which could be rectified by improved intellectual
property enforcement.

Downloaded from ecs.sagepub.com at University of Bristol Library on January 21, 2013

Marshall 83

However, over the last few years it has become increasingly apparent that the decline
of CD sales is not merely a blip and, furthermore, that sales of digital music are unlikely
to make up for the fall in revenue since the CD peak. Labels are having to develop alter-
native revenue streams and generally have become persuaded as to the merits of the 360
approach. Ironically, Warners has been the label most aggressive in pursuing 360s, and
by the end of 2007 had a policy that it would only sign new artists to such deals. As
Bronfman Jr stated in that year, ‘we’re not going to continue to sign artists for recorded
music revenue only’ (in Karubian, 2009: 423). To support its new strategy, Warners has
acquired Artist Arena, a company specialising in online ticket sales and fan clubs, and
launched Brand Asset Group to oversee artist branding.
Warners may be the most vocal supporter of the 360 model, but all of the majors are
reorienting themselves towards this new approach, utilising various combinations of
acquisition and internal reorganisation to support the model. For example, Universal has
launched Twenty First Artists, an artist management agency, and Bravado, ‘the only
global 360° full service merchandise company’, while Sony has collaborated with brand-
ing specialists Exposure to launch SBX, a ‘new communications and artists agency’ that,
according to its website, ‘creates outstanding 360° solutions’. All of the majors are
investing more in divisions that focus on licensing, synchronisation rights, merchandis-
ing and sponsorship.
However, the most significant change has been a rhetorical one: all of the majors have
stopped calling themselves record labels and have started referring to themselves as
‘music companies’. When Roger Faxon was appointed head of EMI in 2010, he circu-
lated a memo to staff in which he outlined his vision for the company, stating that the
company would have a ‘more diversified revenue base’ in the future, becoming a service
company in partnership with its artists which ‘we cannot continue to view … as being
limited to selling records’ (this was the only use of the words ‘record’, ‘recording’ or
‘CD’ in the whole 3000-word memo). The goal, he stated, was to transform EMI into an
‘artist-focused global rights management business’, to become a ‘wholly different music
company’ (Faxon, 2010). Similar sentiments can be found throughout what was once the
recording industry. For example, Richard Story, the chief operating officer of Sony
Music Continental Europe, described SBX as ‘a key pillar of our new business strategy.
It delivers on our mission to transform Sony Music from a record label into a global
music entertainment partner for our artists and brand clients’ (Exposure, 2008; emphasis
added).
At least on the surface, the major labels have rethought their mission statements com-
pletely in the last few years. Indeed, while much has been written about the impending
decline of the recording industry, the above statements enable us to assert confidently
that the record industry already no longer exists; in its place stands the global music
entertainment partner industry.5

Characteristics of 360 deals

One thing that this means is that the 360 contract is now the normal contract that a
recording artist will sign, described by Music Week as ‘standard for new acts at major
labels and common among indies’ (Woods, 2010: 22). Initially they were more common

Downloaded from ecs.sagepub.com at University of Bristol Library on January 21, 2013

84 European Journal of Cultural Studies 16(1)

in the USA than in the UK (Passman, 2011 suggests that this was the result of tougher
restraint of trade laws), but are now becoming prevalent in the UK and other European
countries: Warner has established 360 divisions in both France and Italy while, in
Finland, despite legal challenges from the local Musicians’ Union, Universal is actively
pursuing 360 deals. Clearly, the reach of the 360 deal is spreading.
So, what do 360 deals usually entail? In this section, I shall outline the broad conven-
tions of 360 deals, but this data require two significant provisos. First, 360s remain rela-
tively new and, as such, no clear standards have become institutionalised (although
lawyers are reporting that things are now settling down and becoming more standard-
ised; Woods, 2010). Second, contracts are private matters and many contain confidential-
ity clauses; therefore, getting the actual details of actual contracts is difficult. The figures
outlined below are gathered from reports from managers, and especially lawyers with
firsthand experience of 360 deals. There is enough consistency among their accounts to
suggest some degree of reliability, although clearly this is not absolute.
A final point to make here is that the deals outlined earlier in this article, with super-
stars such as Madonna and Jay-Z, are irrelevant to any discussion of the conventions of
the recording industry. Those blockbuster deals were important in establishing 360 as a
concept but they are more like profit-sharing deals than recording contracts. These net
profit deals will tend to be more generous to artists than royalty-based deals but are only
available to the most powerful artists in the major label system, as their track record
gives them a stronger bargaining position.6 The majority of artists are in a weak bargain-
ing position and will sign a contract with major record labels which pays the artist a
royalty for each album sold. When the 360 was emerging it seems that labels sometimes
would offer a bonus to the artist, such as a higher royalty rate or an unrecoupable advance,
in exchange for the extra rights that they gave up. However, as the 360 has become more
standard, these bonuses have vanished and ‘unless you’ve got enormous bargaining
power, the record part of a 360 deal looks pretty much like a standalone record deal’
(Passman, 2011: 103).
The record deal is, however, only one part of the 360 package, the defining character-
istic of which being that the label receives income from revenue streams outside of
recordings. What other rights may be included? The most important ones are recordings,
publishing, merchandising and touring (Passman, 2011 lists these as the four cumulative
nineties of a 360, so that potentially one can make a ‘180 deal’ incorporating, for exam-
ple, recordings plus publishing). There are also various subsidiary rights that could be
discussed under these headings, such as secondary ticketing income. However, the
breadth of rights that can be included leaves little outside of the contract: Nickelback’s
deal with Live Nation included ‘literary rights’, while lawyer Bob Donnelly states that
contracts can include things such as ‘the books that artists write [and] the Hollywood
movies in which they act’ (2010: 4).
The non-recording parts of the 360 deal do tend to be more like profit-sharing agree-
ments, with labels requiring a proportion of the artist’s net income. Passman (2011) sug-
gests that most labels require 10–35 percent of non-recording sources, dependent upon
the artist’s bargaining power, with most deals being in the 20–30 percent range. However,
negotiations occur for each different kind of right, and so the percentage of income that
a record label may request will vary across the different aspects of the deal. Using details

Downloaded from ecs.sagepub.com at University of Bristol Library on January 21, 2013

Marshall 85

from 360 contracts at Warners and an independent label, Day (2010) outlines the follow-
ing percentage splits: ‘endorsements (15–20%), performance (10–30%), merchandising
(20–50%) and film/TV money (15–40%)’.
An important distinction to make is between active and passive rights. In a passive
deal, the label will request a percentage of the artist’s income from publishing, for exam-
ple, but will not play a role in the management of those rights. So in this case, the artist
can sign with a separate publisher but the record label will top-slice a percentage of the
publishing revenue. By contrast, an active deal is when the label insists on having a role
in rights management by, for example, demanding that the artist signs a deal with its in-
house merchandising division.7 Most deals are actually a mix of both active and passive
rights: for example, by mid-2007 Warners’ policy was to insist on active rights in record-
ings, merchandising and fan clubs, with passive rights being negotiated for all other
kinds of rights (Goodman, 2010).
The important thing to recognise is that these revenue streams can be cross-collaterised.
Cross-collaterisation always has been a fundamental feature of recording industry con-
tracts. In a conventional recording contract, the label pays the artist an advance for
recording an album, which covers their subsistence while this happens. However, this
advance is recoupable, which means that the artist must repay the advance from their
subsequent income: that is, their record royalties. If the album sells less than expected
and the artist does not earn enough royalties, they remain ‘unrecouped’. However, if any
future album released under the contract is successful, royalties from the successful
album can be used to recoup the advance of any previous albums. The technical term for
this process is cross-collaterisation: all albums under the recording contract are cross-
collaterised against each other. The same situation exists under a 360 deal, only now
cross-collaterisation can occur from income sources other than recorded music. So, for
example, the artist’s income from the sale of T-shirts can be used to offset the advance
paid by the record label for recording an album. This does not necessarily mean that all
of the different revenue sources will be cross-collaterised, as that is a matter for negotia-
tion in each individual case, but this principle of cross-collaterisation from sources other
than recordings is one of the fundamental characteristics of the 360 deal.

Justifications for the 360 deal

Given that the 360 deal is now the standard offered by major labels, it is important to
consider how labels are justifying taking income from revenue streams other than
recorded music. Broadly speaking, there are two different kinds of justification being
provided: a ‘just desserts’ argument and an ‘active partnership’ argument. Before outlin-
ing these positions, it is important to recognise the context in which these justifications
are being made. It is now obvious to the major labels that income from recorded music
is not going to sustain them in the future; what is equally important is that labels are rely-
ing on everyone else recognising this as well. The major labels are extremely adept at
using their business problems for rhetorical benefits. It seems unlikely that someone in
the recording industry has not considered top-slicing alternative revenue streams in the
past. However, this approach has not been pursued, partly because the profit margins
from CDs meant that it was a low priority, but also because any such claims would have

Downloaded from ecs.sagepub.com at University of Bristol Library on January 21, 2013

86 European Journal of Cultural Studies 16(1)

been unacceptable to other parties – it would have just looked too greedy. While by no
means has the 360 deal has been accepted uncritically by others in the music industry, the
public discourse concerning the ‘crisis of the music industry’ means that the shift to 360
seems more realistic at this moment.
In order to avoid accusations of outright greed, the labels need to justify taking income
from areas which, in recent memory at least, have been deemed off-limits to them. The
‘just desserts’ position, in which labels emphasise the role that they play in building the
artist’s career, which then positively impacts on a much wider range of income than
records, is summarised neatly by Donald Passman:

Of all the players in your [the artist’s] life, we [the label] are the only ones who spend substantial
money to make you a household name. Then, thanks to our rocket launch, you make tons of
money by touring, songwriting, selling your face to teenagers on T-shirts etc. This isn’t right.
We should share in all the businesses we help build for you. (2011: 102)

In this instance, labels are emphasising the role that they already play in developing art-
ists’ careers – not something that they claim they will do in the future, rather something
they have always done but are now making explicit. As the former managing director of
Parlophone, Miles Leonard, stated:

[Labels] invest a lot of money in making an artist – the exposure to the public is huge. The
knock-on effect is celebrity endorsements, which we don’t share the income from. Going
forward, that is going to have to change. Income from record sales isn’t enough to sustain the
artist. (in Cardew, 2007a: 4)

Of course, there are countless examples of artists complaining that their label failed to
support their career, did not promote their albums adequately, did not support their artis-
tic directions, financially exploited them and so forth. However, whatever dubious prac-
tices may exist in the recording industry, it is true that the majority of popular music stars
have benefited from record company investment. Traditionally (and, as I will argue
below, still), recording has been central to popular music careers, as even the most indus-
trious of bands are limited in the number of people they can play to each year. By provid-
ing artists with funding for recording an album (and perhaps more importantly, for
promoting it), by offering money to support bands going on tour (as touring is generally
loss-making for all but the most successful artists) and by having considerable expertise
in ‘breaking’ an artist, record labels have played a vital role in establishing pop careers,
and it is the establishment of a career which generates financial opportunities for artists
(endorsements, merchandising, playing bigger tours and so on). This is how the old sys-
tem could work: on the one hand, because of advances and low royalty rates, most artists
have never received money from their recordings, but the success of their recordings has
helped to produce income from other sources; record labels, on the other hand, have been
able to overlook these alternative sources of income because they receive the vast major-
ity of profit generated by the records. However, as the income from recorded music has
rapidly declined, labels are highlighting the role that they play in career-building and
arguing that they should receive a return for it.

Downloaded from ecs.sagepub.com at University of Bristol Library on January 21, 2013

Marshall 87

If the ‘just desserts’ argument claims that labels have always been the drivers of career
development for pop musicians, then the second form of justification for the 360 deal – the
‘active partnership’ position – asserts that labels will do much more for artists in the future.
Signing artists to 360 deals, the labels argue, gives them a greater incentive to participate
actively in the artist’s career and to support artists for longer periods. Supporting the 360
approach, Franz Ferdinand’s manager, Cerne Canning, suggested that ‘it keeps the labels
on the game longer. If you give them ancillary rights, labels have got a vested interest to go
down the road with you’ (in Cardew, 2010). Importantly, it also means that labels can view
an artist’s career holistically rather than focusing narrowly on record releases. As Mike
Smith, former managing director of the Columbia Label Group, stated, 360 deals mean that
‘we are able to do things that go much further than record sales. It means we can work on
an act’s career’ (in Cardew, 2007a: 5). Signing a 360 deal means that the labels’ strategy
does not focus too strictly on the album cycle. Providing an example of how the deal with
Korn liberated the artist–label working relationship, Jeff Kempler, then-chief operating
officer of Capitol Music Group, discussed the release of two albums, Korn Unplugged and
Chopped, Screwed, Live and Unglued (a remix/live album):

We didn’t have to get into a whole big rugby scrum with the band over, ‘Does this count as an
album?’, ‘How do we apply royalties since it is old songs?’ ‘What do we do about the
publishing?’ … We didn’t have to try to manoeuvre our way through a touring agent who might
not have wanted to have them in rehearsal for Unplugged when they could have been touring.
I don’t think you would be able to get those additional pieces of product [so quickly] in a
normal deal. (in Martens, 2007: 22)

While the two different kinds of justification risk being contradictory (with labels arguing that
they will start doing something which they are claiming they have always done), both forms
of justification are being put forward simultaneously. Indeed, these two kinds of arguments
justify the different kinds of deals outlined previously in this article: whereas the ‘just des-
serts’ argument justifies the acquisition of passive rights (‘we should get a share because our
investment significantly boosts your income’), the ‘active partnership’ defence justifies the
acquisition of active rights (‘we will provide you with new services and you shall pay us for
them’).

Criticisms of the 360 approach

Despite the rationales offered for the 360 approach, these deals have received more criti-
cism than praise and, perhaps unsurprisingly, the loudest complaints have come from artist
managers and lawyers. For a variety of reasons, major record labels do not have a huge
amount of goodwill from many in the music industry. A certain amount of scepticism exists
towards labels’ motives and intentions, as well as a certain schadenfreude regarding the
difficulties that they have experienced in the last decade.
The most frequent criticism made is that the extra rights required in a 360 deal are little
more than a ‘land grab’ being made by companies whose business model is failing. For exam-
ple, artist manager John Glover stated that ‘a lot of people want 360 degrees because their
business is going down the toilet’ (in Cardew, 2007b: 6), while lawyer Bob Donnelly argues:

Downloaded from ecs.sagepub.com at University of Bristol Library on January 21, 2013

88 European Journal of Cultural Studies 16(1)

[N]ow that the record business economy is faltering, label honchos are complaining that they
can’t make enough money from record sales alone. Perhaps not surprisingly, they expect their
own recording artists to sign so-called ‘360’ deals to subsidise executive compensation
packages worthy of Wall Street. (2010: 4)

Clearly, these criticisms are more appropriate for passive rights, in which the record label
top-slices a proportion of income for no extra work. It is reasonable to expect that manag-
ers and lawyers may have a more positive attitude towards active rights, in which the label
is at least offering services that they did not previously. However, many artists’ repre-
sentatives are sceptical that labels have the appropriate expertise to bring value to artist
development:

Many of the labels don’t just want a participation – they want to have approvals over decisions
traditionally made by the artist manager … In negotiations, we’re having to educate the
business affairs folks on how the business runs in areas outside of records. That makes me
worry about how prepared the majors are to get into these areas. (lawyer J. Reid Hunter in
Butler, 2008a: 22)

In a recent deal, the company proposed to be the merchandiser, but the business affairs guy
didn’t understand merchandising. We couldn’t even get the deal done. The ivory tower sends an
edict to start signing merchandising rights, but the poor business affairs guys haven’t been
educated in those deals. (lawyer Gary Gilbert in Butler, 2008a: 22)

If they want to be actively involved in your touring, that’s problematic because they really don’t
understand the touring business. (lawyer Elliot Groffman in Butler, 2008a: 22)

The perceived lack of appropriate expertise means that some managers are sceptical that
the labels have really changed. As one manager, Iain Watt, stated: ‘I was offered a 360
deal recently that I thought was classic major label thinking, with the worst parts of a
record deal and loads of extra rights’ (in Barrett and Clarke, 2008: 9), with another,
Graham Wench, commenting that ‘nothing much has changed. I think the rude awaken-
ing is yet to come because many record labels think they have changed’ (in Barrett and
Clarke, 2008: 9).
The final criticism made of the labels’ 360 deals is that in focusing on ancillary rights,
360 deals may be distracting record labels from their core task of producing and distributing
records. Some lawyers and managers have suggested that the label should have to achieve
minimum levels of record sales before earning revenue from alternative sources:

Labels having a piece of things like touring … makes no sense if they don’t sell [enough] records
… Unless they sell a certain number of records in two [albums], there should just be a notice and
an out … It is hard to meet, but if they only sell 100,000 units, I’m not sure that’s good enough to
merit participation in other income streams. (Gary Gilbert, in Butler, 2008a: 22)

Given the manner in which the 360 has become established as the new standard record-
ing contract, such mutual accountability seems unlikely to evolve any time soon. The

Downloaded from ecs.sagepub.com at University of Bristol Library on January 21, 2013

Marshall 89

balance of power between the record label and the new artist remains heavily skewed
in the label’s favour, and thus it retains the ability to establish the terms of the deal.
However, there are many commentators on the music industry who believe that this
balance of power may be changing. To such commentators, ‘in the new music econ-
omy, the record label is no longer in the driver’s seat; it is the artist, or the artist/
manager, who is’ (Wikstrom, 2009: 143). From such a perspective, the 360 deal is an
important reflection of the changing dynamics of the music industry. In the final sec-
tion of this article I intend to evaluate this argument and consider the ramifications of
the emergence of the 360 deal.

Making sense of the 360 deal

The 360 deal has become a bit of a buzzword in discussions concerning the music
industry, with the Madonna, U2 and Jay-Z deals in particular taking on a certain zeit-
geist feel. Coupled with public discussions of rampant piracy and plummeting CD
sales, there is a sense of radical reorientation within the music industry as the CD, the
cornerstone of the music industry for almost three decades, rapidly declines in signifi-
cance, while a supposed ‘live music boom’ occurs, featuring an increase both in the
number of tickets sold and overall ticket prices (see Frith, 2007). The overall picture
painted by some commentators is that having tied their fortunes to the CD format,
record labels, for decades the biggest fish in the music industry pond, are in terminal
decline (e.g. Knopper, 2009; McLeod, 2005). From one side they are being chal-
lenged by new major players, most notably Live Nation and Apple; from the other
side artists are in a much stronger position than they were in the past, able to acquire
financing from venture capitalists or fan-funding, and reach audiences through the
internet without label support. Whichever way you look at it, the future seems bleak
for the major record labels.
I wish to argue that this position, although quite widespread, is somewhat exagger-
ated. It is certainly true that the major labels’ stranglehold on the music industry has been
loosened somewhat, and that they have lacked strategic direction over the last decade or
so. However, this particular moment may be the darkest one for the labels and it is con-
ceivable that, when considered in a broader historical perspective, their situation may not
be as bad as it seems on the surface and, furthermore, that their current circumstances
and responses demonstrate considerable historical continuities. In this section I shall
outline four reasons for this view.

Recordings will remain at the centre of the popular music

experience
Throughout the course of the 20th century, popular music has grown up alongside, and
been dominated by, the record. Toynbee (2006), for example, discusses how the dissemi-
nation of records has structured the very sounds of popular music (what he refers to as
‘phonographic orality’) but, for the present article, the more significant factor is the
impact that the record has had on the listeners of popular music. Put simply, the vast

Downloaded from ecs.sagepub.com at University of Bristol Library on January 21, 2013

90 European Journal of Cultural Studies 16(1)

majority of people have heard the vast majority of popular music through recorded
music. This creates what Bennett calls a ‘recording consciousness’ that ‘defines the
social reality of popular music’ (in Middleton, 1990: 88). It is the record that defines the
popular song: if asked to think of a particular song, it is the recorded version that one is
likely to hear in one’s head. The record dominates our sense of popular music and this
affects how we hear live music, with live performances generally heard as crude inter-
pretations of the recorded experience, as variations from the record (Eisenberg, 1987).
Although the CD format may be in decline, there seems little reason for the signifi-
cance of recorded music to decline soon. Indeed, the changing format of musical record-
ings has been one of the major features of the music industry over the last century, and
the significance of the record has supposedly been threatened in the past by new inven-
tions such as radio. The means that the media through which we access recorded music
may change, but YouTube hits, Spotify streams and ringtones are still recorded music.
Piracy levels indicate that records remain important. The physical limits of live perfor-
mance and touring ensure that people will still hear the vast majority of the music through
recorded music. This can be easily illustrated by comparing 2010 data: in the USA there
were exactly 300 million more album purchases than concert ticket purchases (326.2m
and 26.2m respectively; of the 326.2m albums sold, 225.8m were physical rather than
digital purchases) (Branch Jr, 2011; Christman, 2011).8 Worldwide, the most popular live
act in 2010 was Bon Jovi, who sold just under 1.6m tickets (Waddell, 2010). The most
popular album in 2010 was Eminem’s Recovery, with an estimated 6m combined physi-
cal and digital sales (IFPI, 2011) plus many more millions of unauthorised downloads.
Recorded music remains significantly more important than live performance in popular
music culture.

Labels remain in a relatively strong position

Recorded music, the thing that the major labels specialise in producing, is thus likely to
remain in a central position for the foreseeable future. However, there are other compa-
nies and individuals capable of producing recorded music and, as mentioned previously,
there are other kinds of companies interested in contracting artists to 360 deals.
Nonetheless, in relation to these competitors, the major labels remain in a relatively
strong position both financially and culturally.
Financially, their strength comes from the fact that the major labels own a lot of the
most popular music recorded over the last 70 years or so. Catalogue ownership provides
labels with a big advantage over many competitors, in that a reliable source of income is
ensured from selling and licensing these works. Licensing is particularly significant in a
cultural environment that samples heavily and is very nostalgic. In terms of residual
income, it is also important to recognise that the CD is not dead yet. The rate of decline
of CD sales has been dramatic, but it is unlikely to continue the same trajectory until it
reaches zero. Instead, it is more likely that the pace of decline will stabilise: the pop
mainstream has been most affected by the decline in CD sales but, for example, older
music consumers, country music fans and Germans are still buying CDs (Peoples, 2011b;
Ross, 2011; The Economist, 2011). CD sales may have declined by roughly half in the
last 10 years, but they were still worth $12bn in 2010 (Peoples, 2011b), with the major

Downloaded from ecs.sagepub.com at University of Bristol Library on January 21, 2013

Marshall 91

labels accounting for the majority of that total. These sources of income provide some
insulation for the major labels, giving them the opportunity to develop strategies more
suited to contemporary circumstances.
Culturally, too, labels remain significant, not least because it is recognised that ‘there
are still a lot of very good people in record companies with real expertise’ (Adele’s man-
ager, Jonathon Dickens, in Barrett and Clarke, 2008: 9). As discussed previously, one of
the labels’ core functions is developing artists’ careers in ways that facilitate income
opportunities from merchandising and sponsorship, for example. Given that arguably,
these non-record income streams are becoming more important in the music industry,
and viewing the artist as a brand is becoming more common, it is recognised that the
labels have expertise that remains relevant in the contemporary industry. It is, of course,
reasonable to argue that this expertise has diminished given the dramatic cuts in staff at
major labels since the start of the downturn. Overall, 29 rounds of job cuts were
announced by the majors between 2004 and 2008 (Barthel, 2008) and Wikstrom (2009:
65) suggests that the record industry has seen a 25% reduction in its workforce since
2000. Further job losses will inevitably occur as a result of the sales of EMI and WMG
in 2011. Even before the downturn, labels had been outsourcing the ‘creative’ elements
of artist development in order to concentrate on distribution of physical product. As such,
and as illustrated earlier in this paper, some critics argue that the major labels have little
relevant expertise to offer artists.
There is definitely substance behind such a stance. However, it is also important to
note that, as well as laying off large numbers of workers, the major labels have also been
recruiting in areas related to artist brand development. Furthermore, where internal
expertise was deemed lacking, labels have sought to acquire more specialised firms. For
example, as early as 2000, Warners acquired Artist Arena, an online ticketing and fan
club specialist (Christman, 2008) while, in 2007, Universal acquired Sanctuary, the man-
agement-company-turned-independent-label considered as one of the 360 pioneers
(Hayward, 2007). The internal reorganisation of the labels and the extra emphasis being
given to artist management, licensing and merchandising divisions, indicates that labels
are taking seriously their promises to provide new services and this has been recognised
in some quarters. Warners, in particular, has been praised for enhancing its merchandis-
ing expertise (Peoples, 2010).
This expertise helps explain why, culturally, labels still matter and most bands still
want to sign with major labels. Getting a record deal remains a significant marker of
status, a sign of having made it – perhaps even more so in an environment in which any-
one can make recordings available to the public. The cachet of being a major label artist
can be demonstrated by a survey of 1869 independent artists by Reverbnation (2011), in
which three-quarters of artists wanted to sign a deal with a record label, with the major
labels (and their subsidiaries) consistently being stated as preferred destinations.9

The labels’ overall strategy is not fundamentally changing

The majors’ expertise in developing artists’ careers points to a further reason why their
future may not be as bleak as commonly presented. While the 360 deal may reflect a
refinement to their approach, their fundamental strategy is not changing. This may seem

Downloaded from ecs.sagepub.com at University of Bristol Library on January 21, 2013

92 European Journal of Cultural Studies 16(1)

Figure 2.  Major record labels’ strategy for management of artist rosters

like a bad thing on the surface, given that their strategy has resulted in declining income;
however, the benefits become clearer when it is recognised that the description ‘record
industry’ was a misnomer, given that its profitability did not depend upon the production
of records. Over the last 30 years or so, the fundamental functions of the major record
industry have been twofold. The first is the generation and exploitation of intellectual
property rights (Frith, 1987) and, despite the quite public challenges to the intellectual
property regime prompted by the internet and widespread file-sharing, rights will remain
an important source of revenue to the labels in the future through licensing songs to tel-
evision, advertisements, websites and so on (the ‘business-to-business’ model). However,
here I want to focus on the second basic function of record labels: the creation and main-
tenance of stars.
The development of pop stars is important to the recording industry because stars
generate new markets and make existing markets reliable in an industry characterised by
unpredictability and high failure rates (Marshall, forthcoming 2014). Recording con-
tracts signed with the major labels are always long-term deals, more like seven albums
rather than one or two, although later albums have to be ‘optioned’ by the label rather
than being guaranteed by the contract itself. The length of such contracts reflects two
characteristics of label strategy: first, that the majority of artists who sign with a major
label are unsuccessful; and second, that early career pop stars are not very profitable,
with artists often not becoming profitable until their second or third albums (but then
becoming very profitable if succeeding – pop stars have a ‘high upside’ but a relatively
low chance of success). Thus the labels utilise portfolio management, signing many art-
ists and expecting the few that are successful to generate sufficient income to subsidise
the costs of the unsuccessful ones and create profit (Negus, 1999). To effect this strategy,
labels sign a number of new artists to long-term contracts, take a financial hit in the early
years of the contract while the artist’s career is developing and, for the few that are suc-
cessful, reap the benefits in the later years of the contract. Figure 2 offers a representation
of this strategy.
In the shift to the 360 approach, very little is changing in the overall shape of this
figure. What is happening is that as income from CD sales becomes unsustainable,
labels seek parts of other revenues generated by the star’s career. However, even this

Downloaded from ecs.sagepub.com at University of Bristol Library on January 21, 2013

Marshall 93

transformation has precedents, given that cross-media stardom, including the sponsor-
ship and endorsements of non-music products, has been significant for earlier popular
music stars such as Bing Crosby (Negus, 1992), country music stars from Jimmie
Rodgers to Garth Brooks, and non-Western markets such as Japan, where the 360
model has long been a convention (McClure, 2008). There is little historical reason to
suggest that the previously successful strategy of portfolio management and star-build-
ing will become unsuccessful.

Labels remain vital to artist development (and thus the future

viability of the music industry)
Without wishing to present the major labels as self-effacing patrons of the arts, it is
important to recognise the important structural role that they play in the ecosystem of the
music industry, offering investment and expertise to new artists to help them become
established. One thing this does mean is that the major live industry is to some extent
parasitic on the recording industry. Despite talk of a live music boom, the majority of
revenue is concentrated in a very few acts, mainly heritage acts such as The Rolling
Stones and U2. Generally speaking, live music is only profitable for acts that are already
successful, and virtually all of the acts that are able to make a profit from touring have
reached their position as a result of record label investment. This is the case even for
many bands held up as paradigms of modern, independent artists, such as OK Go: when
asked the best way to make it as an independent artist, OK Go’s digital strategy manager,
Mike Rosenthal, replied: ‘be on a major label for ten years first’ (in Lindvall, 2011).
If the major labels disappear, then new ways of supporting fledgling artists will need
to develop. However, there do not appear to be any alternative sources of investment
appearing. At the time of the Madonna deal Live Nation explicitly stated that it is not
interested in developing new acts:

We don’t want to be in the business of pouring tens of millions of dollars into unknown acts,
throwing it against the wall and then hoping that enough sticks that we only lose some of our
money and not all of our money … It’s not part of our business plan to be out there signing 50
or 60 young acts every year. (Michael Cohl, then chairperson of Live Nation, in Waddell,
2007: 25)11

Figure 3, from a Live Nation investor presentation, graphically demonstrates its lack of
interest in artist development. It presents a new and totally unrealistic model of the music
industry in which an artist can go from posting a song online to selling out an arena in
three months.
The argument that major labels retain an important functional role in the music industry runs
counter to many of the popular arguments that their significance is declining because artists
have access to other sources of funding and other ways of reaching their fans through the inter-
net. However, in an industry perhaps even more uncertain than in the past, the major labels
remain the primary source of investment for developing artists. The sources of venture capital,
such as Power Amp and Ingenious, are available only to artists with already established fan

Downloaded from ecs.sagepub.com at University of Bristol Library on January 21, 2013

94 European Journal of Cultural Studies 16(1)

Figure 3.  Slide from Live Nation investor presentation

Source: Live Nation investor presentation, Live Nation Entertainment 2010 Investor and
Analyst Day, New York, 15 July 2010. Available at: http://phx.corporate-ir.net/phoenix.
zhtml?c=194146&p=irol-calendar#2010 (accessed 7 February 2011).

bases. As the Sugababes’ co-manager, Sarah Stennett, stated: ‘people talk about private inves-
tors, but people will not invest in new music outside of the major labels’ (in Cardew, 2010).
This is not to suggest that it is impossible for artists to be successful without major
labels (and it may be that what counts as ‘being successful’ will change radically in the
next few years). However, in an industry perhaps even more uncertain than in the past, the
major labels thus remain the primary source of investment for developing artists. This
explains why most bands still want to sign with record labels: very few artists have been
successful without one. Tom Silverman, founder of Tommy Boy Records and the New
Music Seminar, argues that ‘the premise of technology being the great democratizer and
allowing more artists to break through than before — actually, we’ve seen the opposite
effect. Fewer artists are breaking through than ever before, and fewer artists who are
doing it themselves are breaking through than ever before’ (in Van Buskirk, 2010).
Silverman points out that, in 2008, only 225 artists in the US sold 10,000 records for the
first time and, of these, only ten artists did not have a record label while ‘79,000 releases
sold less than 100 copies. Under a 100 copies is not a real release – it’s a noise, an
aberration’.10

Downloaded from ecs.sagepub.com at University of Bristol Library on January 21, 2013

Marshall 95

Figure 4.  Schematic representation of major labels’ income from artist rosters
before and after the emergence of 360 deals

Conclusion
Can the 360 deal save the record labels?
Just because an important functional role exists does not necessarily make it financially
viable. Is it possible for labels to continue making enough money to continue to invest in
new artists? I would argue that it is, and that the current crisis being experienced at the
present time is deceptive. It is important to recognise that this may well be the worst pos-
sible moment for labels. First, income from old-style record deals (i.e. those that rely on
income from recordings) is declining. Second, substantial income from new-style 360
deals has not yet begun to materialise, as they have been signed with new artists who are
in the early part of their careers and thus unlikely to be profitable (as would have been
the case with the standard recording contract). This is represented in Figure 4 below.
Of course, one thing this means is that the 360 deal remains rather speculative, with
few likely to have made any significant money thus far. Labels are taking 360s as a
hunch and, as they do not exactly know how the music industry will develop, they are
seeking to get their fingers into as many pies as possible. Yet the 360 approach does
create some possibilities for weathering the labels’ current problems. There will be
some changes, as the high profit margins of the CD, and thus the boom years of the late
1990s, are unlikely to return. It is also plausible that the high failure rates associated
with the recording industry may become less sustainable; but on the whole, the record
labels should be able to find a way of continuing their business model.
They will not be record labels any more, though, but global music entertainment
partners with interests in a diverse array of popular music activities. In this sense, one
of the interesting ramifications of current developments may be that labels begin to
resemble what they were in the middle part of the 20th century. During the 1970s, for
example, EMI had control of a major British cinema and theatre chain (one of the major
live music circuits), a network of clubs, discos and dancehalls, a network of talent and

Downloaded from ecs.sagepub.com at University of Bristol Library on January 21, 2013

96 European Journal of Cultural Studies 16(1)

artist agencies, concert promotion companies, ticket outlets and a ‘muzak’ library. It
was Britain’s largest distributor of musical instruments and owned, among others, an
American recording equipment producer, the record store HMV, an American rack-
jobbing enterprise and a shopfitting service (Frith, 1983). The general approach of the
major recording companies at this time was to seek income from all forms of musical
activity and, in their new business models, labels may find themselves going back to the
future, becoming more all-encompassing music empires once more.

Funding
This research received no specific grant from any funding agency in the public, commercial or
not-for-profit sectors.

Notes
1. Presumably under the terms of the deal, Madonna is obligated to use Live Nation as a tour
promoter and perform in Live Nation venues as much as possible, so Live Nation will profit
from the tour before receiving its 10 percent cut from the 360 deal. However, given that
Madonna’s previous tour was promoted by Live Nation, this is probably of negligible benefit.
2. Perhaps in part to alleviate this issue, Live Nation made an unsuccessful bid for the recorded
music division of Warner Music Group in March 2011.
  3. The rights specified in the press release announcing the deal are touring, tour sponsorship,
tour merchandising, VIP packages, secondary ticketing, recorded music, clothing, licensing
and other retail, non-tour sponsorship and endorsements, DVD and broadcast rights, fan club/
website and literary rights.
  4. At the times that these deals were signed, Madonna still owed one album to her record label
under the terms of her existing deal, Jay-Z owed one album to his label (although he subse-
quently paid $5m to negate this), and Shakira owed three albums to her label.
 5. Neither is it just the major labels who are rebranding themselves in this way: declining
mechanical royalty payments from CD sales and the transition from album sales to single
track sales have led some publishers to start to offer 360-type deals to new writers (Butler,
2008b) while Music Week reports that even some public relations companies are offering 360
contracts to unsigned artists (Barrett, 2008). As different types of companies see the value of
their share of the pie wither, and as new technologies enable greater convergence between
different aspects of the music industry, it seems that an increasing number of companies are
offering the same kind of package to artists.
  6. The net profit deal is also commonly used at independent labels and in smaller national music
markets.
  7. In some cases, the label is actually requiring a passive share of income after the merchandis-
ing company has taken an active share already (Passman, 2011). The rationale for this is that
the merchandising company is technically a different company, even though it may be part of
the same parent company.
  8. These are official figures compiled by Soundscan and Pollstar, and as such do not cover every
such purchase; however, this does not undermine the overall argument.
  9. Reverbnation is an online company that provides promotional tools and distribution channels
(e.g. to iTunes) for independent artists. As such, one may expect artists completing their poll
to be positively inclined toward the opportunities afforded to artists outside of the major label
system. However, the poll suggests that many artists see resources such as Reverbnation as
a stepping stone to a more stable major-label career, rather than using them as a means of
establishing a DIY career.

Downloaded from ecs.sagepub.com at University of Bristol Library on January 21, 2013

Marshall 97

10. Two things need noting here. First, as a leading advocate of independent labels, Silverman is
arguing for the value of record labels per se, not just the major labels. Second, Silverman’s view
is not uncontroversial. In particular, Jeff Price, founder of independent distributor Tunecore, has
been extremely critical of Silverman’s reliance on Soundscan data (see Price, 2011).
11. Cohl left Live Nation in 2008, reportedly over the role of the 360 deal in Live Nation’s
strategy. Since then, new chairperson Irving Azoff has stated that the company will not pur-
sue any further 360 deals (Waddell, 2011). However, through its acquisition of Frontline
Management, Live Nation owns the management of more than 300 artists, although not nec-
essarily signed to 360 contracts.

References
Ashton R (2007) Live Nation lures $100m material girl. Music Week, 27 October, p.2.
Barrett C (2008) The changing face of public relations. Music Week, 29 November, p.21.
Barrett C and Clarke S (2008) Managing music’s future. Music Week, 17 May, p.8.
BBC (2007) Madonna signs radical record deal. 16 October. Available at: http://news.bbc.co.uk/1/
hi/7047969.stm (accessed 9 June 2011).
Billboard (2002) Virgin, Mariah, call it quits. Available at: www.billboard.com/news/virgin-
mariah-call-it-quits-1276772.story# (accessed 14 December 2010).
Bintliff E (2010) Live music boom drives off recording blues. Financial Times, 29 August. Available
at: www.ft.com/cms/s/0/c8ff8d50-ac85-11df-8582-00144feabdc0.html#axzz1PtNTmxrQ (accessed
19 June 2011).
Branch Jr, A (2010) 2010 concert ticket sales drop due to economy and fickle audiences. Ticketnews.
com. Available at: www.ticketnews.com/news/twenty-ten-concert-ticket-sales-drop-due-to-
economy-and-fickle-audiences121030974?utm_source=email&utm_medium=2011-01-06
(accessed 25 January 2011).
Butler S (2008a) Degrees of difficulty. Billboard, 5 January, p.22.
Butler S (2008b) 360 publishing deals? Billboard 19 April, p.20.
Cardew B (2007a) From a stream to a river: The rise of the multi-platform deal. Music Week, 16
June, p.4.
Cardew B (2007b) Delegates engage in the 360 dance. Music Week, 3 November, p.6.
Cardew B (2010) Sugababes’ manager shows support for 360 model. Music Week, 15 June.
Available at: www.musicweek.com/story.asp?sectioncode=1&storycode=1041524 (accessed
18 January 2011).
Christman E (2011) US album sales dropped 12.8 percent last year, digital tracks post small
gain. Billboard.biz. Available at: www.billboard.biz/bbbiz/industry/retail/u-s-album-sales-
dropped-12-8-last-year-digital-1004137880.story (accessed 25 January 2011).
Day W (2010) 360 deals are todays ‘record deals’. Rap Coalition. Available at: http://thedayreport.
blogspot.com/ (accessed 15 June 2011).
Donnelly B (2010) Buyer beware: Why artists should do a 180 on 360 deals. Billboard, 27 March, p.10.
Eisenberg E (1987) The Recording Angel: The Experience of Music from Aristotle to Zappa. New
York: Penguin.
Exposure (2008) Sony Music and Exposure launch SBX, a new communications and artists
agency, press release. http://www.prnewswire.co.uk/cgi/news/release?id=241690 (accessed 9
June 2011).
Faxon R (2010) Memo to EMI staff. Available at: www.billboard.biz/bbbiz/content_display/
industry/news/e3if8cf70233aa65f1b0635d6242d016b91 (accessed 15 June 2011).
Forde E (2010) A very different deal. Music Week, 16 October, p.66.
Frith S (1983) Sound Effects. Bury St Edmunds: St Edmundsbury Press.

Downloaded from ecs.sagepub.com at University of Bristol Library on January 21, 2013

98 European Journal of Cultural Studies 16(1)

Frith S (1987) Copyright and the music business. Popular Music 7(1): 57–75.
Frith S (2007) Live music matters. Scottish Music Review 1(1): 1–17.
Garrity B (2005) Korn’s ‘twisted’ deal. Billboard, 12 November, p.5.
Goodman F (2010) Fortune’s Fool: Edgar Bronfman Jr., Warner Music, and an Industry in Crisis.
New York: Simon & Schuster.
International Federation of the Phonographic Industry (IFPI) (2011) The Recording Industry in
Numbers. London: IFPI.
Karubian S (2009) 360 deals: An industry reaction to the devaluation of recorded music. Southern
California Interdisciplinary Law Journal 18(2): 395–462.
Knopper S (2009) Appetite for Self-Destruction: The Spectacular Crash of the Record Industry in
the Digital Age. London: Simon & Schuster.
Lindvall H (2011) Is it OK for bands to court brands? The Guardian, 1 April. Available at: www.
guardian.co.uk/music/musicblog/2011/apr/01/bands-brands-corporate-sponsorship (accessed 7
April 2011).
Live Nation (2007) Live Nation’s Artist Nation division redefines the music industry with
unified rights model, 16 October. Available at: http://phx.corporate-ir.net/phoenix.
zhtml?c=194146&p=irol-news#2007 (accessed 9 June 2011).
McClure S (2008) Surround sound. Billboard, 21 January, p.20.
McLeod K (2005) MP3s are killing home taping: The rise of internet distribution and its challenge
to the major label music monopoly. Popular Music and Society 28(4): 521–531.
Marshall L (forthcoming, 2014) The structural functions of stardom within the recording industry.
Popular Music and Society 37(1).
Martens T (2007) Back on top. Billboard, 9 June, p.21.
Middleton R (1990) Studying Popular Music. Milton Keynes: Open University Press.
Negus K (1992) Producing Pop. London: Arnold.
Negus K (1999) Music Genres and Corporate Cultures. London: Routledge.
Passman D (2011) All You Need to Know about the Music Business (7th edn). London: Penguin.
Peoples G (2011a) What you didn’t know about Live Nation’s growth In 2010. Billboard.biz.
Available at: www.billboard.biz/bbbiz/industry/legal-and-management/what-you-didn-
t-know-about-live-nation-s-1005059352.story (accessed 7 April 2011).
Peoples G (2011b) Inside the IFPI’s cheery 2010 numbers. Billboard.biz. Available at: www.
billboard.biz/bbbiz/industry/global/inside-the-ifpi-s-cheery-2010-numbers-1005103902.story
(accessed 23 April 2011).
Price J (2011) How people use Nielson to hurt musicians. Tunecore Blog, 21 January. Available at:
http://blog.tunecore.com/2010/01/how-people-use-nielsen-to-hurt-musicians.html (accessed
18 June 2011).
Reverbnation (2011) Survey results: 75 percent of indie artists seek a label deal – Sony top label
of choice, 29 March. Available at: http://blog.reverbnation.com/2011/03/29/survey-results-
75-of-indie-artists-seek-a-label-deal-sony-top-label-of-choice/ (accessed 15 June 2011).
Ross A (2011) Q1 country album sales down 13 percent. Music Row, 7 April. www.musicrow.
com/2011/04/q1-country-album-sales-down-13/ (accessed 9 June 2011).
The Economist (2011) Media’s ageing audiences: Peggy Sue got old, 7 April. Available at: www.
economist.com/node/18527255 (accessed 23 April 2011).
Toynbee J (2006) Copyright, the work and phonographic orality in music. Social and Legal Studies
15(1):77–99.
Van Buskirk E (2010) What’s wrong with music biz, per ultimate insider. Wired.com, 7 September.
Available at: www.wired.com/epicenter/2010/07/tom-silverman-proposes-radically-transpar-
ent-music-business/ (accessed 12 January 2011).
Waddell R (2007) Behind the deal. Billboard, 27 October, p.25.

Downloaded from ecs.sagepub.com at University of Bristol Library on January 21, 2013

Marshall 99

Waddell R (2010) Year-end: Bon Jovi leads as top touring act of 2010. Billboard.biz, 10 December.
Available at: www.billboard.biz/bbbiz/content_display/industry/news/e3i3a15dfaab86484f-
b803efe9748f4591f (accessed 12 January 2011).
Waddell R (2011) Madonna about to record new LP, Irving Azoff says. Billboard.biz, 11 February.
Available at: www.billboard.biz/bbbiz/industry/record-labels/madonna-about-to-record-new-
lp-irving-azoff-1005031772.story (accessed 9 June 2011).
Wikstrom P (2009) The Music Industry. Cambridge: Polity Press.
Woods A (2009) Running the Nation. Music Week, 31 October, p.44.
Woods A (2010) The changing law of the band. Music Week, 16 October, p.22.

Biographical note
Lee Marshall is a senior lecturer in sociology at the University of Bristol. His research interests
centre on issues concerning authorship, stardom and intellectual property. His first book,
Bootlegging: Romanticism and Copyright in the Music Industry (Sage, 2005) won the Socio-Legal
Study Association’s early career book prize. His second book, Bob Dylan: The Never Ending Star
was published by Polity Press in 2007.

Downloaded from ecs.sagepub.com at University of Bristol Library on January 21, 2013