Since these contracts internalize the positive externalities that exist between the recorded music market and the ancillary markets, it should be profit-enhancing for both record labels and artists to strike such deals. However, very few equity deals have been signed in the music market so far. In this paper we argue that artists who currently have a recording contract, or who have had one in the past, are reluctant to sign a degree deal because they fear their bargaining power will be weaker in income-sharing with their record label. Using a representative survey of professional musicians in France, we provide empirical evidence that past contractual experience with a record label does indeed reduce the incentives to sign a degree deal. Moreover, the more artists perform on stage, the more reluctant they are enter into degree deals. In exchange, the labels undertake to fund and manage these activities and to develop new opportunities for the artists. Gayer and Shy , Curien and Moreau and Dewenter et al. For an artist, releasing an album with a record label is a necessary condition to obtain radio airplay and to benefit from marketing expenses.
If your career is hitting the point where a serious contract is on the table, please read this and get a good lawyer. First, let me give every artist and manager a quick primer on what a degree deal is. The deal is not new. But in the last few years deals have become common place.
360 record deals are a bit controversial
The company agrees to provide financial and other support for the artist, including direct advances as well as support in marketing, promotion, touring and other areas. In turn, the artist agrees to give the company a percentage of an increased number of their revenue streams, often including digital and online sales, live performance, merchandise, endorsement deals and songwriting royalties. This business arrangement is an alternative to the traditional recording contract.
Music industry contracts that allow a record label to receive a percentage of the earnings from all a band's activities are referred to as deals. The arrangement is somewhat controversial. Other contracts simply pay a percentage from record sales or from money-making activities that the record label has a hand in. These deals have become increasingly common in major label contracts because sales of recorded music aren't as robust as they were years ago. This isn't to say that consumers aren't enjoying and spending their money on music, however. Artists' tours rake in significant revenues, and artists and bands make money through endorsements and merchandise. Radio and streaming services are alive and well. People just aren't purchasing records and CDs the way they used to. Also called "multiple rights deals," record labels typically receive a percentage of revenues under deals that would otherwise have been off-limits to them, including:.