The 063 Deal (or Inverted 360 Deal)

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This model (pronounced « O-Six-Three deal ») has been developed by Guillaume Déziel, Mathieu-Gilles Lanciault and Virginie Berger in order to participate in the Rethink Music Contest.

Everybody in the music business knows the 360º deal; this contract first appeared several years ago in order to provide more rights to the label to exploit revenue streams of artists. In fact, the real reason behind the birth of this 360º deal was to thwart the free falling of record sales since 2000. As a bank, the “major” record company that signs a 360º deal with an artist takes away artists’ rights, exploits them and gives the artist a revenue share that applies only once an album’s break-even point is reached.

What if the 360º deal was reversed to the benefit of artists?

These days, technology allows artists to record their own albums, promote and distribute them to anywhere in the world, etc. However, artists still need help in spreading the word about their music if they want to focus on what they do best that of composing and playing music. This kind of help requires an understanding of social networks, Web interaction, psychology and human behaviour, existing copyrights, and the many rights involved in the artist’s activities. So, there’s good news these kinds of resources surround artists naturally: roommates, friends, relatives, marketing students, blogs and fans. Moreover, talking about music business today is no longer a topic reserved for lawyers. Even if the people surrounding the artists’ environment are more or less experienced, they are « unformatted » meaning that the old-fashioned way of doing music business has no control over them, which is a great advantage while crossing this foggy episode in the history of music! Such fresh resources are free to reinvent the music business as they are armed with a “common sense approach”. Moreover, passion for the artist’s project is by far the most important ingredient when helping artists reach their goals.

The “Band Branding” or “Artist Branding” is a perceptual value you can monetize. Using free music as a loss leader has so far been the most efficient and also the cheapest way to connect with thousands of fans, start a conversation with them and offer them convincing reasons to buy the artist’s branded products (ex. concert tickets, privileged access, clothing, accessories, content exploitation rights for advertising, movies, etc.). Let’s consider Michael Masnik’s formula “ CWF + RTB = $$$$”. Such ideas of reinventing the music business are floating in the air!

If the entire artist’s team members contribute to adding value to the branding, everybody should thus get a fair share of the artist’s global revenues. Every link from the « creation / production / marketing » chain brings value to the artist’s branding, and logically, should take advantage of it. The sharing of artists’ revenues across the entire team should be fair, “pre-agreed” and clearly identified in a company charter.

Please welcome the O-Six-Thee (063) Deal!

Based on the corporation’s company structure (the one that isn’t registered on the stock market exchange), the reversed 360 Deal would put the artist at the centre of a business frame, allowing people who believe enough in the artist to invest their money, time and/or energy in their talent. Artists should first surround themselves with professional, supportive people, then give them a share of the artist’s “branding value” to reward them in proportion to the overall results, according their involvement. Artists should keep their rights and property on the master tapes and publishing, but should share the revenues generated from these rights with their teams. Artists should also form a Board of Directors while maintaining a veto on decisions pertaining to artistic direction. Finally, the artist should issue voting shares as well as non-voting shares to better reinforce their decision-making power.

One Success Leads to Another

When artists find the path to success, they will have the chance to share their fame, expertise and money by investing in a new artist whom they believe in. Artists should have the desire to support an emerging artist who they are passionate about and surround him or her with the best professionals as needed to help them realize their dreams. After playing a key role at the beginning of an artist’s career, it will be the new artist’s turn to serve as an “investment bank” for other upcoming artists, and those artists can in turn help other upcoming artists when they become popular and established.

The Industry Will Have to Adapt

The public founders who normally support artists and producers should provide a basic “survival income” for any professional wishing to contribute their expertise in advancing the artist’s career. Such professionals will be more motivated to work if they have a percentage of the artist’s business shares, knowing that their efforts will likely be reaped in the future.

For example, a PR person, a radio tracking agent or a booking agent could request a public grant in order to have a basic income to cover the investment of their time and expertise and, at the same time, acquire a few shares in the artist’s business. Rather than simply financing the initial creation and production of the artist, encouraging such commercialization initiatives would be an arrangement that would delight artists and their supporting entourage. Each person would thus be able to participate in the artist’s career by investing time or money. In this way, only the people who are truly passionate about an artist’s career will benefit from the artist’s development.

The O63 Deal: The Best of 360º, Without Hassles

Here lies a model that brings all the advantages of a 360º deal, but benefits artists as well as the people working collectively for their success. In such a model, it goes without saying that the artist will never be put on the backburner. As long as the artist works with a team where there is mutual respect and where fans and their consummation habits are also respected, the path to success and profit will be a sure-fire result.