September 18, 2020

Do 360 deals work in South Africa?

360 deals in south africa
Image Credit: complex.com

The music industry can sometimes be confusing especially for young artists who just want to get a break.

There is just so much to know and you can’t (and won’t) know everything within a short space of time. The industry was pretty much the business of selling physical products in the form of Vinyl, cassettes and later CD’s.

But that is no longer the case. Sure some record labels still manufacture CD’s but physical sales only form part of the labels income stream.

In recent years, the business model changed and 360 deals became commonplace in the music industry.

We have seen how 360 deals have helped to propel artists such as J Cole, Cardi B to superstardom.

But that’s in the USA.

Do 360 deals work in South Africa?

Everything in the South African music industry seems to be a secret until you find out about it either in the tabloid newspapers or on social media.

If you asked me to give you a list of SA artists signed to 360 deals, I wouldn’t be able to compile you a list – because I have no idea.

Anyway, let go over this 360 deal and see what the hype is all about.

What is a 360 deal in music?

A 360 degree means all-round covering a circle. In the music industry, a 360 deal is an agreement between artist and label to share profits of all revenues generated.

The label invests in the recordings, marketing and promotions but will take a cut from physical, digital sales, streaming, publishing, tours and shows, endorsements, merchandise, et cetera, et cetera.

360 deal diagram
Image Credit: Vinnykumar.com

Why 360 deals?

When the music industry was still organic, record labels were making their money the old-fashioned way.

But the internet changed all that. And now it was much easier to download your favourite song(s) online rather than purchasing a CD from a store.

When the demand for physical products started to decline, record labels had to find new ways of making money. So instead of offering the traditional record deal, 360 deals made more sense considering the current state of global affairs in the music industry.

However, 360 deals are not highly publicized in South Africa and hence the title of this blog post.

The closest we’ve come was when controversial stories about Ambitiouz Entertainment made the headlines.

In a 2019 interview with SA Hip Hop Mag, Emtee said he was getting a monthly salary during his four-year stay at Ambitious. But he didn’t state whether or not he was signed to a 360 deal (Well not in those exact words

The Benefit of 360 deals for artists

The beauty about 360 deals is that you (the artist) can focus your energies on your craft and creating the best music possible.

Most record companies (especially the majors) usually have a team of professionals and staff working behind the scenes and pushing the music on your behalf.

If you are an independent artist, chances are you would have to wear different hats at the same time and try to be good at everything – which is not always possible.

The labels also have a wide distribution network -They have direct relationships with major key players such as retailers, Public Relations specialists, radio pluggers, manufacturers and so forth.

But a 360 deal might not be a good idea

As much as you would have access to the labels resources, but there’s a catch.

I explained earlier what 360 deals entail. But just in case you have a short attention span, let me remind you.

When the label signs you to a 360 deal, they will invest in your music and therefore you will have to relinquish all rights. All the songs that compose, write, produce will not be owned by you but the label. Of course, you will be entitled to a royalty share for each record sold.

As soon as your music takes off, all the money that you make has to be shared with the label (your investor). 

Since the label is the one funding the production costs, as an artist you might lose the benefit of creative freedom and control.

You cannot work with any artist of your choice unless the label approves and for any artist, this could also lead to further frustrations. 

Conclusion

Traditional record deals are no longer viable for labels. Should a record label sign you in South Africa, chances are you will be offered some sort of “360 deal”.

I say sort of because the deal will most likely allow the label to get a cut of your touring/gig money.

That’s how labels make their money now since they can’t sustain their businesses solely on music sales.

Whether or not 360 deals work in South Africa is debatable, but one thing for sure is that most record labels are no longer offering standard record deals.

I would like to hear your thoughts and opinions, please do leave your comments below.