CONVERGINGMEDIACase Study360 Degrees of Music

It used to be that recording labels made most or all of their money by receiving a percentage of the money generated by the sale of physical media, such as CDs, records, and tapes. But the era of digital downloads (both legal and illegal varieties) saw that revenue literally cut in half in little over a decade. In response, the recording industry is turning to something called 360-degree agreements. Defined by legal scholar Sara Karubian as “a legal contract between a musical artist and one company incorporating components of an artist’s career that have traditionally been handled by separate contracts with different companies,” the 360-degree deal gives a single corporation control over everything, from merchandising and publishing to endorsements and touring.¹

What this means is that in addition to the money a record company would make from sales of recordings, the company would also get a cut of money from tours, concerts, publishing (if the artist is also the songwriter), merchandise, endorsements, even television and movie appearances, for the length of the contract. In theory, the recording company helps organize, market, and cover the up-front costs of those concert tours; merchandise production; and so on. The recording industry describes these deals as mutually beneficial, centralizing and maximizing revenue for the artist and the label at a time when both are suffering from the huge drop in music recording sales.

But in practice, critics worry that there may be significant downsides to these arrangements. For example, in some cases a record label might not automatically agree to provide support for the revenue stream it wants to share with the artist, meaning the artist essentially signs away a chunk of money at no benefit. These deals also shift power back to conglomerates at a time when more indie labels have gained traction in the industry. However, as these agreements have become more common in recent years, new artists may soon find they have little choice but to sign 360-degree contracts if they want to go with a major label.

Some artists may be content to become “middle-class” touring bands, making a little money off albums and singles but using them primarily to promote their live shows and accompanying merchandise. Media convergence has made this middle-class existence a more viable alternative for many acts that would have, in more label-dominated years, been forced to produce a huge hit or face obscurity.

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Musical acts with large enough fan bases may follow the lead of British alternative rock group Radiohead, which handles its career without contracted label backing. (However, physical CD distribution is usually still handled through a third party; although Radiohead self-released its 2011 album King of Limbs, it was released as a CD via the label TBD Records). While few big artists can maintain a label-free career, many more of them offer fans the option sof buying their music directly through the artist’s or label’s Web site, often selling exclusive packages that may include digital downloads, vinyl albums, T-shirts, concert tickets, or limited-edition releases. In these cases, artists are allowing multiple media to converge into their own hands. Whether through 360-degree deals, middle-class touring careers, or a self-releasing strategy, convergence is changing the way many musicians make money.