However, this isn’t just any record deal. On that day, whether they knew it or not, they were about to change the music business indefinitely; by signing the first ever new artist 360 deal.
The 360 deal, or multiple rights deal, is when the record label takes in more revenue from the artist then in a traditional deal. Instead of just cashing in on record sales, the label also rakes from other revenue that the artist generates, which may include concerts, merchandise, endorsements, etc. The label will also have more creative control over things such as release dates and the overall direction of the artist. In exchange, the label will promote the artist for a longer period of time than normal and stay committed to acquiring more opportunities to make money for said artist.
Big picture-wise, what this all boils down to is that your label basically becomes your manager. They can essentially draw your career out for you; get you tour placements, features and even sponsorships without you even lifting a finger. But the catch is you have to give them a slice of the pie.
Now the deal was not an entirely new concept. The first ever 360 deal was crafted in 2002 by Tim Clark and David Enthoven, managers for English singer Robbie Williams. In an attempt to break him into the American market, the two decided that in order to make that happen, the label (EMI) would have to have more control over Williams’ musical as well as business decisions.
According to BBC, Williams’ representatives lauded the £80m deal (then the second highest in music history), dubbing it a “multi-platform approach to the respective elements of recording, live work, film and television.”
The deal was adopted because at the time album sales were trending downward. According to Soundscan data, since its peak in 2000, album sales have gone down by the millions almost every year since. And by using more data, we find that in 2003, CD’s made roughly 93% of all music purchasing formats. By 2005 it would decrease nearly 42% to 54.1%. By 2007 it would decrease again to 27%, half of what it used to be just two years prior, with digital sales (particularly singles) making dramatic rises.
As the masses adapted to new music-listening platforms like YouTube and iTunes, so did record labels. You didn’t have to buy albums at the record store to hear your favorite songs anymore. You could just as easily listen to it for free on the Internet through various, sometimes illegal means. This meant that the labels were losing money by the boatload, and needed new ways to get cash. Enter 360 deals.
But that’s enough history; what does this mean for hip hop?
Rap and 360 deals have had a tumultuous relationship to say the least. Wiz Khalifa recently sued his former manager Benjy Grinburg and Rostrum Records, alleging that they screwed him over by not disclosing to him all the ins and outs of his 360 deal, which Wiz says cost him songwriting and merchandising revenue. Others have been more direct in addressing their displeasure. “I don’t agree with the way labels are set up. I don’t agree that anybody should sign 360 deals or sign away their publishing or take most of the infrastructure that’s included in a formal deal,” Chance The Rapper said in an interview with Beats 1 Radio. Lupe Fiasco went on a Twitter rant last year explaining how his 2011 album Lasers was held up because of his refusal to sign a 360 deal with Atlantic. “You DO NOT need a 360 deal in today’s climate,” he said. All you need is what you always needed a good manager and hard work.” “Watch out for these labels, man/They’re four finger fuckin’ y’all niggas, man, real talk, man/Make sure your lawyer know what he’s doing, man/He sign contracts right, thinking that shit real/Don’t get a 360, that shit ain’t 100, my nigga” Waka Flocka Flame said on the appropriately-named “Fuck This Industry.”
It seems that other rappers weren’t listening to Waka. Young Thug, J. Cole and Chief Keef have all signed on the dotted line to 360 deals. And while it’s worked for some, for other’s it’s become a nightmare.
In today’s music world, the internet is your biggest friend. This is especially true in hip hop, as an up-and-coming rapper can have millions of plays on platforms such as Soundcloud before ever talking to a label. This creates valuable leverage, as it proves that they can garner massive hype and fans without any outside help or influence other than their own talent.
So why would a rapper sign a 360 deal when they’ve proven that they can do a lot of what a label already does on a regular deal?
This is where the negative stigma of 360 deals come into play. During meetings, label executives are obviously going to do whatever they deem necessary to get the artist’s signature on the contract. They might throw them a big figure advance, or they might give them the whole ‘you’ll be the biggest thing since ________’ speech.
Once you sign that deal, you’re basically at the mercy of the label. If they don’t think the music you’re making is good enough to make a mainstream buzz for example, then they could put it on the shelf for the foreseeable future, because now they’re in line to get paid off of more than just record sales. Why put something out if they’re not going to turn a big profit from it? And even with your music on hold, the label can still make money off you from touring, merch, etc., which under normal circumstances they couldn’t touch.
Young Thug is a perfect example of this. The Atlanta rapper initially signed to (surprise) Atlantic imprints 1017 Brick Squad Records and Artist Partners Group in late 2013. In an article by Buzzfeed, a source speculated that Thug’s 360 deal with APG could perhaps be transferred over to 300, which was founded by 360 deal forefather Lyor Cohen. That’s looking like the case, because not only is 300 (surprise) another Atlantic imprint, according to the same article, Thug’s long-awaited debut album Hy!£UN35 was initially set for a January 2014 release – over two years ago. Thug even went on the Hy!£UN35 tour earlier this year without the album even being out. Now tell me, does that make sense?
Being a rapper isn’t cheap. The costs associated with following your dream can add up in a hurry; booking agents, tour managers, managers, publicists, lawyers, etc. are all going to take a percentage of what you make in your ventures. Now all that is before we even get to the 360 deal. Most of the time you’re giving up a large percentage of your mechanical royalties, which is the money you make every time your music is sold on a physical medium (CD, vinyl) and downloaded off the Internet. The label is also going to take a large portion of your touring and merchandise money, as previously stated. You also eventually have to pay back the label for the advance they gave you upon signing (plus possible interest) and if you’re not popping enough to make a big impact, you could have a debt over your head for a long time.
The thing is, 360 deals make more sense for pop-oriented artists. If the label is going to put that much time, effort and money into someone, don’t you think it’s going to be your stereotypical pop star? First and foremost, the label is a business, and their contract with you in this case is like an investment. In the eyes of the label, it goes something like “we’ll give you this money, put you on tour with ______, get you a sponsorship with _______ and get you off the ground. But just remember, at some point you’re going to have to pay us back for all we’ve done for you.” A pop artist, with their tendency to appeal to a wider audience than your typical rapper, is going to have an easier time recouping the money invested in them and making the label happy, not to mention land other non-musical-related partnerships, which also will all go back to the label.
Now this isn’t a “bash 360 deals” piece. There are certainly some benefits to signing the deal. They give you arguably the quickest way to reach massive amounts of people through multiple formats, and if the music is good enough then you could become a star in no time at all.
Take B.o.B for example. After signing his joint deal with T.I.’s Grand Hustle and (surprise) Atlantic in 2008, he released his debut single “Nothin’ on You” in February 2010, which reached No. 1 on the Billboard charts later that year. B.o.B’s other notable single “Airplanes” featuring (surprise) Paramore singer Hayley Williams tapped out at No.2 on the same chart. Both of those songs were initially conceived and written with (surprise) fellow Atlantic signee Lupe Fiasco in mind. However, the label instead gave the songs to B.o.B (maybe because Lupe wouldn’t sign a 360 deal?), who saw the cross-over potential the Atlanta artist possessed. Sure enough the plan worked, as B.o.B was all over the radio in 2010, not to mention his debut album The Adventures of Bobby Ray clocked in at No.1 on the charts its first week.
By carefully planning B.o.B’s coming out party, exposing him to different fan bases like Paramore’s (the latter also shouted him out in interviews) and handing him potential chart-topping singles, Atlantic planted the seeds for his success. While he had been on the mixtape grind long before “Nothin on You,” without Atlantic’s work behind the scenes it wouldn’t be a stretch to say he owes his career to them.
Cole signed a 360 deal with Jay-Z’s Roc Nation in 2009. In an interview with Complex that same year, Cole described his displeasure of the deal but also its highlights:
“I’m not getting raped, but it’s a 360 deal. On the other hand you want that because if I’m an artist on Def Jam, and my album didn’t sell that well, back in the day a label was so quick to shelf you. So quick to be like , Fuck you nigga, we can’t make money off you no more, your album cost too much, blah blah. But now if he had a 360 deal, the label will say, Aight let’s at least throw him on tour, let’s at least make money off them like that. And now you’re eating and the labels eating. And everyone’s happy.”
Everybody was happy indeed. Thanks to Hov’s guidance, Cole’s debut album Cole World: The Sideline Story debuted at No.1 with over 200,000 copies sold and later went platinum. Both of his ensuing albums also went plat; his latest, 2014’s 2014 Forest Hills Drive, doing so with no features, the first rap album to do so in over 25 years.
Now the difference between these two rappers is that while B.o.B’s career has floundered, Cole’s has flourished. While every rapper’s spotlight is bound to dim at some point, if you don’t make good music and stay relevant you’re not going to last long. 360 deal or not, you’ve still got to put the work in. Nowadays it seems like the former is more well-known for his flat-earth beliefs than his actual music.
With the 360 deal being a relatively new thing, it’s difficult to say with definitive certainty if it’s a winning or losing concept. However, if we look at 360 deal ‘pioneers’ Paramore, we get a glimpse of both. After being signed, Atlantic down-streamed them to indie label Fueled By Ramen, because according to A&R rep Steve Robertson, they didn’t want the band attached to any major label. They wanted the fans to discover the band. It worked, as after establishing their fan base, the band blew up in 2007 with their platinum RIOT! album. They also got coveted MTV spots and had two songs on the massively popular Twilight movie soundtrack. Now they’re arguably one of the most popular bands in the world. However, in late 2010 two founding members left the band, citing creative differences and being “pushed around by the label.” According to them, what started out as a natural band turned into “a manufactured product.”
If you’re a rapper that happens to be reading this, before you sign that 360 deal let me give you some advice. GET A LAWYER. It’s imperative to know EXACTLY what you’re getting into, because while you can benefit a lot from a deal like this, you can also lose a lot, especially if you don’t know even know what you stand to lose in the first place. You also need to think about how you want your career to go. If you want to be a star and are willing to put in the work then a 360 deal would make sense, as the label will presumably try and do everything it can to make that happen. However, if you’re just trying to get paid doing what you love then the deal wouldn’t make sense, as you won’t make nearly the amount of money you could be getting in a traditional deal.
A 360 deal can change your life. But please, read the contract first.