As the music industry transitions from CD sales to digital streaming, it creates difficulties for artists to make revenues compared to the pre-2000s. Nevertheless, there are still some options for artists to generate revenue streams in the music industry today. For example, from streaming; artists are paid by Spotify about $0.00437 per stream (Schofield, 2019). From merchandising, artists can sell different products (t-shirts, posters, hats) during concerts or collab with brands (h&m, forever 21) to sell them in stores. From motion picture music: artists are paid between $5000- $400 000 for a song during a film or end credit. In this paper, it aims to discuss touring and 360 deals in more depth along with some institutional and organizational challenges artists may encounter during touring and signing a 360 deal.
In recent years, concert tours are getting bigger and music festivals are drawing crowds because dedicated music fans crave more intimate experiences with their favorite artists. Due to the disappearing of physical records, people are less certain that record sales are crucial to a strong touring base (Passman, & Glass, 2015) Some artists nowadays can have huge fan base during tours without a record deal, this seems to be successful with DJs, rockers, jam bands, and YouTube stars (Passman et al., 2015). These artists may able to develop a cult following, thus can lead to a healthy touring career and even a record deal if they are interested (Passman et al., 2015). According to Passman, based on the pricing in Los Angeles, smaller artists can earn from $250-$1500 a night at night clubs (2015). If they are well known in the local scene they can earn up to $ 10,000 a night (2015). While midlevel artists can make about $5000-$50,000 a night, major artists can get a guaranteed percentage of the net profits or gross of the show instead of being paid a flat fee (2015). This guarantee is called a split, in which artists can earn from $100, 000 to $500, 000 per night or even more(2015).
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Certainly, artists often struggle to make money on tours until they become major stars. Passman claimed that it is common to lose money on touring especially in the beginning stage (2015). Since artists need to pay managers, agents, lawyers, and promoters, they actually do not receive a lot of income in their own pockets at the end. In addition, new artists may experience emotional distress because “[they are] stuck in an opening for another act, in uncomfortable dressing rooms, with food leftover from last night’s headliner. And [they are] regularly humiliated, playing to half-empty concert halls, since the audience is coming later to see someone else. Also, the people who show up early will be buying beer, talking loudly during [their] ballads, and chanting the headliner’s name if they don’t like the show.” (Passman, 2015, p.1217).
Another common option that artists may consider in the early stage is signing 360 deals with major record labels. A 360 deal allows a label to participate in the full circle of an artist’s income from activities beyond record sales including live performance, publishing, merchandising, sponsorships, acting gigs, etc (Kellogg, 2014). Sometimes many major artists would receive an ownership interest in the master recordings as part of their 360 deals (Kellogg, 2014). Important to realize, a 360 deal with artists like Jay-Z is more profit-sharing than a recording contract and the majority of artists are in a weak bargain position in comparison (Marshall, 2013). If an artist is lucky enough, the deal he/she signs can be potentially worthwhile depending on the contract.
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Indeed, 360 deals have received more criticism than praise, especially from artist managers and lawyers (Marshall, 2013). Since labels claim a percentage of all the money artists make, they may have a difficult time to make their own money. In Marshall’s article, he argues that many record labels sign artists with 360 deals because their business is failing, and use artists’ revenues to subsidize the company (2013). Moreover, artists’ representatives are skeptical that labels don’t have the appropriate expertise to bring value to artist development (Marshall, 2013). As an illustration, a company would propose to an artist that it be the merchandiser, but the business affairs executive has no experience in merchandising thus not able to get any deals (Marshall, 2013). With this mind, 360 deals may also distract record labels from their core tasks of producing and distributing records to doing tasks that they are not good at.
Overall, working in the music industry can be intricate because even major super artists experience deceptions with record labels. Such in the case of Taylor Swift and Scooter Braun, in which Scooter owns the master recordings of Taylor’s first six albums and Taylor was rejected to own her masters (Woodward, 2019). The only way for her to gain ownership was to sign a new decade-long contract with Big Machine so she could only earn back the rights to one old album for each new one she made (Woodward, 2019). Ultimately, there are many methods for artists to make revenue streams but it is important to read over contracts with professional lawyers to avoid record labels taking advantage.
- Passman, D., & Glass, R. (2015). All You Need to Know About the Music Business. (9th ed.). New York: Simon & Schuter.
- Kellogg, P., (2014). Taking Care of Your Music Business. (2nd ed.). P J’s Publishing.
- Marshall, L. (2013). The 360 deal and the “new” music industry. European Journal of Cultural Studies, 16(1), 77–99. https://doi.org/10.1177/1367549412457478
- Schofield, J. (2019, October 31). Which is the best streaming service for supporting artists? The Guardian. Retrieved from https://www.theguardian.com/technology/askjack/2019/oct/31/best-streaming-service-mp3-pays-artists.
- Woodward, E. (2019, September 27). Scooter Braun Finally Opened Up About His Feud With Taylor Swift. Buzzfeed. Retrieved from https://www.buzzfeed.com/elliewoodward/scooter-braun-responded-taylor-swift-rolling-stone-interview.
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