360 RECORD DEALS; THE ALL-REVENUES RECORD DEAL HAS THE MUSIC INDUSTRY BUZZING, BUT WILL THESE DEALS BENEFIT THE ARTIST OR THE COMPANIES THAT SIGN THEM

For nearly twenty-five years Madonna had been a Warner Bros. Records recording artist. However, in October of 2007, Madonna informed the label that she was signing a new ten-year, $120 million deal with LiveNation, an international concert and theater production company.

The deal, while not the first, was certainly the biggest 360 record deal signed. LiveNation has since proceeded to sign a $150 million 360 deal with Jay-Z.

Both deals are at the instruction of new LiveNation executive Michael Cohl, now perhaps the key player in LiveNation's international development plan. Before joining LiveNation, Cohl dominated the international concert industry with impressive and creative financing of international mega-star tours, such as the Rolling Stones and U2, to name a few.

The 360 record deal is a major break from the traditional artist-label relationship. The new structuring of a 360 record deal allows the label (or companies like LiveNation) to participate in all revenue streams generated by an artist, not just record sales.

In return for more comprehensive support and budgeting, the label takes a handsome percentage of revenues that have traditionally been exclusive to the artist, such as the hugely important revenue from touring, as well as revenue from merchandising and the various forms of digital marketing.

How a 360 deal will work out for Madonna, or LiveNation, or others who sign 360 deals, is yet to be seen. As USC Thorton School of Music Professor Mark Goldstein says, in an informative interview on artistshousemusic.org, it may take "three to five years" to determine the benefits or burdens of the newly structured 360 deals.

None the less, Goldstein says, many more 360 deals will be signed in the coming months, because the big labels and international concert producers want to be the first to successfully navigate these waters.

It may follow that the big-named acts, with established touring history, and marketing history, will be the focus of 360 record deal development. It seems likely that the touring component of an artist's career, and related longevity, will be key to these 360 deals. If touring is an important revenue for the artist, than a 360 deal may be what the record company or its concert-producing competitor wants.

Here is Mark Goldstein's interview on ArtistsHouse (Are "360 Deals" Worth It?), and a good article from the MELONblog on the particulars of 360 deals (360 Deals Pt. 1).