What’s poppin yall; Record Labels are STEALING from your favorite artist, depending on how
you look at it. I recently made a video titled why your favorite rapper is broke and if you
haven’t seen it go and watch that now before this video so it all makes sense; it will
be in the cards and description. Plenty of people must have thought I’m bozo the clown
or something typing like a buncha retards in the comments telling me that most artist’s
money comes from touring, merchandise, and endorsements. DUH! It’s always been this
way, artists barely made money off their music even when it was selling well.
But before we get into how record labels are stealing from your favorite artist please
give the video a like; subscribe and MOST IMPORTANTLY hit the notification bell so you
will NEVER miss a video. I upload every Monday and Wednesday and sometimes Fridays and Saturday’s
too. After labels started losing money since record
sales declined; from its peak at 1999 with $14.5 BILLION dollars to 2012 with $7 billion
dollars, a 50% drop. The labels noticed sales going down years before this and needed to
figure out a way to make up for the fact that music was not going to be bought anymore.
One of the earliest if not the first time the 360 deal was introduced was by Jeff Hanson
a music executive along with his lawyers Jim Zumwalt and Kent Marcus to none other than
Atlantic Records. It was for the band Paramore, and initially the labels were against it but
he convinced them and after losing millions in up front investment on Paramore they raked
in the cash. What is a 360 Deal? I’m not mad many of
you have no idea what it is even though you hear the term all the time and try to tell
me artists make most of their money on touring and merchandise because even Lil Yachty had
no idea he was in a 360 deal and he’s a rapper. So if an artist isn’t sure what
deal they’re in I wouldn’t expect a fan to. A 360 deal builds on the old record deal
and in addition to getting money from the music, the label also gets a percentage for
damn near everything the artist does. That includes merchandise, touring and performances,
digital products, publishing, endorsements, and all the rest from tv appearances, books,
and all that. Now these percentages are not all the same for artists but in general the
standard looks something like this: 50% of merch, 25% of touring/performances, 25% of
digital products, 25% publishing, 25% endorsements, 25% anything else. Remember 50 Cent’s Vitamin
Water deal? He made so much money off that, if he was in a 360 deal the label would have
gotten a percentage of that. This might sound outrageous to some of you
and for some of you this might not sound so bad you get to keep a majority of all the
profits right? Well remember what I said in my “your favorite rapper is broke video”,
all of this is taken by the label and then you still have to pay your lawyers, accountants,
manager, tour manager, security if you have any, publicist and anyone else on your team,
AND your taxes. And most of those jobs I just named don’t get paid a flat rate they get
a percentage so do you see how quickly that all adds up or to better phrase it… eats
away at all the money you are generating. So when you hear $30k a show and you count
all these dates and multiply them you think the artist is taking that all home when in
reality it’s 30k that they’re GROSSING from a show and that’s if they’re not
exaggerating which they usually are. What they’re taking home is only a small percentage
of that. 360 deals are not just something labels are
doing though; Live nation, the event promoters that own ticketmaster do a deal like this
with most artists. Notable ones being Madonna’s tour in 2007 and Jay-Z’s in 2008.
Some people might be fuming, throwing their fists up in the air, saying how could a label
do this? They are THIEVES, SCUM, and a bunch of other reactions similar to that. But I’m
fair so we have to also look at it from the labels perspective; what is it that they’re
providing that makes it worth it for them to take so much money. The labels are giving
the artist financial support; in addition to the advance they’re giving marketing,
promotion, touring, etc. As an artist you don’t really have capital early on in your
career, so the label would for example pay to put you on worldstarhiphop, pay to get
you on Genius, get you interviews at these radio stations, and overall promote you. So
when people say that it’s unfair that labels take a percentage of everything an artist
does, a common defense is that this artist wouldn’t have the image or fans to be able
to get endorsements, sell this merch, and the rest if it weren’t due to the label
putting the money into them and promoting them up until this point so it’s only fair
they get a cut of what they helped build. It’s kind of like they’re making an investment
in you; but it’s not, because investors share in the risk with a business. The label
is going to get its money back; you HAVE to pay all this money back that they put into
you in the beginning unless they drop you or sell your contract which the first is VERY
unlikely to happen. The 360 deal right now is the standard recording
deal; people negotiate the terms of it but most rappers and artists in general are on
this. It isn’t that bad if you end up becoming a star though, because you didn’t have anything
in the beginning and the label put money into you and it was a huge success so you’re
making a lot of money now. That’s what happened with Lady Gaga and Lorde, nobody knew who
they were before they were signed and their labels put so much money into promoting them
and it paid off big time. But it’s becoming less and less common for labels to sign artists
that are absolutely unknown, if they’re signing someone they usually have a strong
following to do music full time ANYWAY, so the “investment” is really more of a guarantee.
The seeds have already been planting and are sprouting, all the label has to do is a little
watering and sprinkle very little money into them and they make a HUGE return on investment.
Look at Juice WRLD, he got signed right before he blew up the label probably didn’t have
to put much money in him and now they’re making a HUGE amount of money for a very low
up front investment. I wanna hear what you have to say though;
are 360 deals fair and did I help explain it in a way that isn’t one sided towards
the artist or label? Lemme know in the comments. Like and subscribe and hit that notification
bell if you enjoyed, thank you for watching, peace!