Defend Sound

Once upon a time in a land far far away, record labels only owned the rights to an artist’s music albums and sound recordings. In today’s world this fairytale only exists for the most renowned artists such as Coldplay, Norah Jones, or Jay-Z who have the star power to leverage their deals. However, for the new breakout artist or breakout band waiting to be discovered by a major label, you will be introduced to the Land of 360.

In today’s music environment it is unlikely that a new artist will be able to sign with a major record label without signing a 360 Deal. 360 Deals emerged in the music industry as major record labels began to see a decrease in profits as a result of digital downloading, new distribution models, and massive drops in CD sales.

In the 1990′s, during the peak of the music industry, it was unlikely that record labels would take a percentage of artist royalties in connection with any artist activity, other than album and recording sales. Now, labels signing new artists, even independent labels, will undoubtedly take a percentage of most things only remotely connected with their signed artists (as described below).

For example, if Chris Brown and Rihanna get a reality TV show, and are each signed to 360 Deals, their labels will receive a percentage of their royalties (Typically 10%) in connection with the TV show. A reality TV show may have nothing to do with recording music or releasing an album, but a 360 Deal indicates that each of their respective labels have rights to take a percentage of their royalties from the TV show.

Record labels justify 360 Deals for a few reasons. Record labels give slightly larger advances (“slightly” larger) under 360 Deals because the artist is giving a piece of all their entertainment activities to the record label. Also, major record labels invest about $1.5 million promoting, advertising, touring, and marketing one album for an artist. Labels have justifiably concluded that when their artists get jobs in other entertainment fields it is largely due to their investment in the artist’s image that enabled the artist to get such a role or job in another entertainment field. Thus, record labels have began signing artists to 360 deals for taking on great financial risk in connection with the success their artists.

The following are all the Entertainment Activities and rights that most, if not all record labels, will have new artists or bands assign/transfer to them:

Ancillary Rights Contract/360 Deal Terms (the term “Ancillary Rights” will usually indicate that you are signing a 360 Deal, 360 Deal is just industry slang for and ancillary rights contract or provision within a recording agreement)

1.  Endorsements “the use, licensing, exploitation, reproduction, publication, and/or exhibitions of the Artist’s name(s), portraits, pictures and likeness and the related personality rights together or separately for purposes of any commercial endorsements, strategic partnerships, sponsorships, or product, services, or brand tie-ins”

2.  Touring Services “Artist’s services or otherwise partly or wholly controlled by you or Artist concerning Artists services or endeavors as musician(s), vocalist(s), or performer(s) in connection with one or more live performances or engagements, including, but not limited to, by public or private stage, television, cable or other broadcast, webcasts, motion pictures, one-nighters, tours, and/or other means, any of the foregoing whether undertaken by Artist in support of a commitment album under the Recording Agreement or otherwise (collectively ”Concert(s)”) either alone or with one or more other individuals and in connection with a single Concert or a series of Concerts”

3.  Acting Services “services where Artists is engaged as an actor or themselves appear (or to serve in a creative capacity such as director, writer, producer) in any dramatic or nondramatic television series (or one or more episodes thereof), motion pictures, or similar productions (excluding only audio-visual recordings made for Company pursuant to the Recording Agreement) or stage productions, for public audiences and/or for exhibition in any and all media now known or hereafter devised (but excluding commercials or endorsements of products which would be deemed an Endorsement hereunder)”

4.  Literary Services “all literary endeavors by Artist including without limitation, books, magazines and screenplays”

5.  Personal Appearances “personal appearances outside of Artist’s Touring Services above including without limitation, one off concert or night club appearances, and speaking engagements”

6.  Merchandise “the exploitation of any and all media of the name(s), likeness(es), visual representations, biographical material and/or logo(s) of or relating to Artist(collectively “Artist Properties), any Artwork, and/or Album Artwork, either alone or in conjunction with other elements, including without limitation such exploitation on merchandise of any kind including merchandise for sale at the site(s) of any and all live concert engagements performed by Artist, premiums such as products which bear a third party’s trademarks or logos together with Artist Properties, tie-ins, “bounceback” merchandising, fan club merchandise, etc. whether or not in connection with Master Recordings”

7.  Entertainment Activities “any other use or exploitation using your name, photograph, voice, sound effects, likeness, caricature, talent or materials in entertainment industry activities not specifically noted herein, including but not limited to video games, dramatizations such as cartoons and other animations”

360 Deal/ Ancillary Rights Agreement (www.defendsound.com) Watermarked
“Ask not what music can do for you, but what you can do for your music”

DefendSound.com

The information contained in this article is not to be construed as legal advice. Any and all questions related to such matters should be directed towards licensed attorneys. Defend Sound and all its authors and editors disclaim any and all responsibility for any claims that arise out of the information used in this article, any of Defend Sound’s articles, or this website/domain.