What Is a 360 Deal in Music, and Should You Sign One?

What Is a 360 Deal?

A 360 deal (multi-rights deal) is a record contract where the label takes a share of your income beyond record sales and streams. That can include touring, merch, sponsorships, endorsements and sometimes publishing. In return, the label is supposed to invest more in your whole career. Whether it's worth signing depends on what the label commits and which income it touches.

The name comes from the label sharing in "360 degrees" of your career. According to Billboard's reporting, most deals aren't literally all-inclusive, but a new artist's contract with a major or large independent label typically includes 360-style language. The good news: attorneys say these terms are increasingly negotiable.

Key Takeaways

• A 360 deal shares your non-record income (touring, merch, brand deals and more) with your label, on top of your recording royalties.
• They became standard in the mid-2000s, when CD sales were collapsing. Billboard notes Paramore's 2006 Atlantic/Fueled by Ramen contract is widely considered the first.
• Passive rights = the label takes a percentage of income it doesn't manage. Active rights = the label runs that business (like merch) and usually takes a bigger share.
• Key negotiation points: which income streams are included, the percentage, a shelter (an income threshold before the label participates), gross vs net, term, and audit rights.
• Never sign without a music attorney reviewing it.

How does a 360 deal work?

You sign a recording contract as usual, but extra clauses give the label a cut of other income streams for the length of the deal.

A typical structure looks like this:

1. Recording side: The label pays an advance, funds recording and marketing, owns or controls the masters, and pays you a royalty after recouping costs.
2. Ancillary rights side: The label also receives a share of income such as:
   • Live performance and touring
   • Merchandise
   • Sponsorships, endorsements and brand partnerships
   • Fan clubs and VIP packages
   • Sometimes publishing, acting, books or other entertainment income
3. Participation type: For each stream, the contract says whether the label is a passive participant (it just collects a percentage) or an active one (it handles the business, such as producing and selling your merch).

Attorney Erin Jacobson told Billboard that the percentage is typically higher when labels take an active role "because they're actually doing the work."

Why do labels ask for 360 deals?

Labels argue that they build the brand that creates your touring and merch income, so they want a share of it.

360 deals took off when recorded-music revenue fell sharply in the 2000s. Billboard cites RIAA figures showing U.S. recorded-music revenue dropped from $14.6 billion in 1999 to $9.4 billion in 2006. Labels wanted income from areas that were still growing.

Streaming has since brought the industry back, but Billboard reports that 360 language is still "baked into deals now." The difference today is that it's more of a starting point than a requirement. Artists with leverage (an audience, streams, a viral moment) can often push back.

What's the difference between passive and active rights?

With passive rights, the label takes a percentage of income it doesn't manage. With active rights, the label runs that part of your business and keeps a larger share.

What should I negotiate in a 360 deal?

Narrow the income streams, lower the percentage, add a shelter, define "net," and attach the rights to real label commitments.

Billboard reports that labels are often willing to exclude certain revenue streams, lower the label's share, and give artists a "shelter." For example, a label that might once have taken 20% of non-record income might now take 5% or 10% only above an income threshold.

Use this checklist with your attorney:

• Carve-outs: Exclude income streams the label doesn't help with (for example publishing, songwriting, acting, or teaching).
• Percentage: Push for lower participation, especially on passive rights.
• Shelter: Protect your early touring and brand income below a set amount. LaPolt Law's Sarah Scott told Billboard this is especially important for young artists because touring is often their only income for a while.
• Net, not gross: The label's share should come from your net receipts after real costs like crew, travel and agent/manager commissions, and the contract should define this clearly.
• No cross-collateralization: Don't let the label recoup recording advances from your touring or merch money unless you've agreed to it.
• Term and sunset: Ancillary rights should end when the record deal ends, not continue forever.
• Label commitments: Tie the rights to written commitments, such as a marketing budget, tour support, or video budget.
• Audit rights: You should be able to check the label's accounting.
• Re-recording restriction: Billboard notes labels now often require longer waits before you can re-record songs. Know what you're agreeing to.

When does a 360 deal make sense?

A 360 deal can make sense when the label commits serious money and services that grow every income stream it shares in.

Jeff Biederman of Greenberg Traurig told Billboard that sharing ancillary income can be fair if you "get a real commitment," such as marketing and time investment.

It can make sense if:

• The label offers a big advance, tour support and marketing budget in writing.
• It actively runs a business you can't handle yourself (merch, brand partnerships) and does it well.
• The participation only kicks in above a meaningful shelter.

It's probably a bad deal if:

• The label takes passive rights in everything but commits little.
• Touring and merch, your main independent income, are shared from the first dollar.
• Rights continue after the record deal ends.
• You're pressured to sign quickly or without a lawyer.

What are the alternatives to a 360 deal?

You can stay independent, sign a distribution or license deal, or negotiate a traditional record deal that covers only recorded music.

Billboard reports that labels are increasingly offering deals where masters revert to the artist after a fixed period, or where the artist keeps ownership and pays for distribution.

How do I protect myself before signing?

Hire an experienced music attorney, ask for every term in writing, and model your income with and without the deal.

1. Get an attorney who negotiates record deals (not a general lawyer).
2. List your current income from touring, merch and brand work, so you can see what you'd share.
3. Model the numbers: What would you have earned last year under this deal, after recoupment?
4. Ask what the label will do for each income stream it shares.
5. Talk to other artists on the label.
6. Set up your business so payments are clean. See how to start an LLC for music.

If you're still shopping your music, our guide to contacting record labels covers finding the right labels and sending demos.

FAQ

Are all major label deals 360 deals?

Not all, but Billboard reports that typical new-artist contracts with majors and large independents include 360-style terms. Many artists negotiate them down or out.

Does a 360 deal include publishing?

Sometimes. It depends on the contract. Try to carve out publishing, or handle it in a separate deal.

Can I get out of a 360 deal?

Only under the contract's terms, such as the deal ending or rights reverting. That's why term and sunset clauses matter before you sign.

Is a 360 deal bad for independent artists?

Not always. It's bad when the label shares in income it does nothing to grow. It can be fair when the label makes real, written commitments and the terms are limited.

Do I need a lawyer for a 360 deal?

Yes. Have an experienced music attorney review any record deal before you sign.

Related Guides

• How to Contact Record Labels and Submit Demos
• How to Split Royalties with Collaborators
• How to Start an LLC for Your Music Career
• Release Checklist