360 Deals: The Missing Ingredient - Expertise

These days you can't get through a music blog or magazine without encountering the term "360 deal."  The term refers to record labels, who normally manage the recording (and sometimes the music publishing) careers of their artists, seeking to expand their influence into artist management, concert/event booking, merchandising, etc...

There have been stories pointing out success stories (from the label perspective) and warnings to acts to not sign these types of deals.  Why the warnings?  Because the labels lack the infrastructure and expertise in the areas of business they wish to expand into.  The ticket companies and concert promoters such as TicketMaster and LiveNation have been steadily acquiring the top merchandising companies.  Management firms like Irving Azoff's FrontLine Management have been snapping up key artist management talent - the star makers behind the stars.  The legal eagles representing the artists have not jumped ship to sign up with the labels.  And, lastly, most of the big booking agencies like ICM, CAA, and William Morris have retained their talent as well.

So labels are asking for a bigger share of the pie, but not proving they can deliver the services required for the artist to feel they would be getting more bang for their buck in a 360 deal.  Nor are they addressing the inequities and lack of royalty accounting transparency within their traditional sphere of influence, where artist managers and lawyers usually have to fight against the label hierarchy to achieve a just outcome for the acts they represent.

So imagine my shock when I read today in the New York Times that Universal Classics and Jazz would be opening up a full-service management practice for label artists, and that the entity would actually be run by someone with expertise in that arena, Jeffrey Vanderveen, formerly of IMG Artists management firm.  This entity still needs to learn how to fly (and with IMG suing UMG and Venderveen - it may not), but if it does, then it may prove to be a working model for how the rest of the industry on how to properly create an environment where the artist feels taken care of via a 360 deal.

Will the industry begin to win over the managers and agents, bringing them on board the label mothership?  Chances are they won't.  But this shows some level of understanding; acts want to be with people they trust.

Comments

[Jakomi Mathews]

Great post.

I think the key issue is exactly what you hit on that the labels do not have the knowledge or infrastructure in-house to really make these deal from an artist perspective.

To top it of they want a cut of every revenue pie for which they traditionally could not touch and which was the Artist and their managements revenue stream as Labels are no known for their transparency in paying up on mechanical royalties.

I do think however that Live Music promoters like Live Nation moving into the 360 deal realm have more economies of scale which could possibly deliver for artists and their management. However the issues of artists best interest still have not been sufficently ackniwledged.

Be good to get your thoughts on this and the article I have examining this on my blog:

http://themusicvoid.wordpress.com/2008/04/12/live-promoters-driving-the-business-model-change/

I will be placing your blog on my links page.

Cheers,
Jakomi