Say hello to your new 360 recording contract.

There is no need to beat a dead horse, but lets kick Mr. Ed around for a second.

The music industry has changed, and even if you don't like what's happening you may have to just suck it up and deal with it if you really want to be a musical icon. So here are a few facts.

The four major, soon to be three, record labels account for 88% of recorded music sales leaving just 12% to be split among the countless indie labels out there and popping up as you read this.

The major labels are responsible for this huge difference because they have the financial backing and resources needed to launch an artists career. I am not saying you can't live comfortably with an indie, or even start out with one and then move up to the big leagues. I am just saying that if you still dream of being the next Jay-Z, Madonna, or Taylor Swift you will need a major in your corner. Now here's the downside, or the upside if you actually pay attention.

All of the major labels, Sony/BMG, Universal, and Warner have instituted the notorious 360º Deal for their new artists. Now you may be able to get signed without handing them a piece to the whole pie, but it is very unlikely at this time. Many musicians are furious about this new practice, and some hold valid arguments, but for a second let's step away from what you have been told by your buddies and examine what a 360º Deal is.

Basically put, and I am sure you all know this, the 360º gives the record label a piece of your recording royalties, publishing, merchandising, touring income, endorsement deals, licensing, and whatever else you may make money on with your brand image. Notice how I said brand image instead of music.

In the past artists just forked over money from their physical recordings and in some instances publishing royalties to their label partners and got to keep all the other income associated with their business model. Now if you just read the 360º Deal as that you would scream and shout that you were getting the shaft. What many pundits leave out is what the label gives to you for that chunk of pie.

When you sign a 360º Deal with most major labels they then takeover all of the production and costs associated with every aspect of your brand. They help design, print, and distribute your merchandise. They help solicit your music to film, television and advertising companies. They help put together your tour. They even help you find sponsors. Without this type of deal you, as the artist, would need to fund these endeavors yourself, and many times that required asking your label for a loan to get each project off the ground. Now they do that for you, basically because the more they invest the more they stand to earn.

On top of funding all of the other income streams that can make you money the labels have the connections to get your new product and services to a much larger audience than if you went at it alone. They have connections in the film and advertising industry, the touring industry, the merchandising and distribution realm, and they have those connections all over the world.  So think of it like this you could do it yourself and potentially reach two million people in one geographical location in the states, or hand it over to a company that can reach 2 billion in China alone.

When Jay-Z signed his 360º Deal with Live Nation he got 775,434 shares, plus an option on an additional 500,000 with the exercise price of $13.73.  

You see they have the money and the connections to make you into that superstar you always dreamed about. But to hammer the point home I offer one more point.  If I was the head of A&R for Sony and had two bands that I wanted to add to our roster. One of them was more than willing to sign to a 360º Deal and the other demanded a typical contract, as a business person looking out for my bottom line who do you think I would sign first?

I am not condoning the 360º Deal or condemning it in any way. I am just tired of seeing all the negativity with very little about what the majors give to you in return. Remember in any true negotiation or business deal each party should feel as though they have given a little and got a little in return. And finally if you really dream about super stardom, private jets, sold out shows at Madison Square Garden and a gold plated shark tank in your mansion you may have no choice but to sign a 360º Deal so be prepared.

And finally, if you ever have the carrot dangled in front of your face GO OUT AND GET A REPUTABLE ATTORNEY who specializes in music business contract negotiation. The ambulance chaser you saw on TV can't help. You need a contract lawyer who can make the language work better for your career and save you millions in the process.

Here are some links to learn more about 360º Deals:
http://musicians.about.com/od/ah/g/360deals.htm
http://techcrunch.com/2008/11/08/360-music-deals-become-mandatory-as-labels-prepare-for-free-music/
http://www.nytimes.com/2007/11/11/arts/music/11leed.html?_r=1
http://lawyer4musicians.com/2009/03/22/you-spin-me-right-round-like-a-360-record-deal/

Your most important musical product.

Ok, so now that I am a few months away from graduating with my Bachelor's Degree in Music Business Management it seems that so many of my friends, and even people I didn't know, are after for me on advice to launch their musical careers.  In listening to them I am overwhelmed at how many of these green musicians are still under the impression that a huge musical industry professional will show up to their next show, wave their magical record deal wand and turn them into the next Adele or Lady Gaga overnight.

I hate to be the bearer of bad news guys, but this just isn't going to happen.  So pack up your delusions of grandeur and think about what you really want from your music.  If you want to be the next international jet setting superstar that's cool, but it may also be impossible.

So how do you know if you have what it takes to get the bowl of M&M's minus all the brown ones at your next show at Madison Square Garden?  Well the answer is quite simple.  It all starts with your music.

I am often overwhelmed at how little importance young artists put into their music.  I have heard everything from "we have an amazing show, the lead singer eats a baby kangaroo on stage" or "the label will give us this big name producer who will make our music into the next big radio, or better yet Spotify, hit.  Where is my red buzzer, or better yet my hoop to pull these idiots off of their pedestals so I can scream Trump's catch phrase "your fired".  Honestly if you think that your music comes second in your career I hope you enjoy salting fries at McDonalds.

Remember this the music business is just that a business and the central point to any business is a competitive product and/or service.  I mean Henry Ford didn't start selling his automobiles to the public in hopes that someone would come along and build them for him after he made a number of sales.  No he had the cars first and then marketed his product to the marketplace.  The music industry is no different.

First and foremost your music is going to define who you are in this huge market.  According to www.quora.com there are upwards of 15-20 million bands on the Internet. And when it comes to live shows Martin Atkins in his book "Tour Smart" reports that there is close to 2940 bands performing each week in L.A., and 1235 in New York, and that's only two markets.  The U.S. is a HUGE country, and we are just a small part of the music world on this planet.  Do you still think that the head of A&R for Atlantic Records is going to show-up at your show in bum fuck New Hampshire and sign you to a multi-million dollar deal.  If you still think yes stand there for a moment while I grab my hook.

The first thing I tell young bands is "take it slow".  Your music is so vital to your success so you should be willing to woodshed the group for weeks and really craft your songs.  Then pick five or six gems and practice them some more.  When you can play through those tunes perfectly your next step is to find a decent studio, and by decent I don't mean your buddy with his Radio Shack recording set-up.  In today's market there are dozens of people with quality home studios who can record your demo.  Make sure they know what they are doing, after all this is your business "product" and it needs to sound as good as it possibly can.  Why?  Because we are going to use that as center point to your marketing, touring, and promotion strategy.  And for Christ's sake after your done recording get that CD professionally mastered. Spend the money and you will be very glad you did.  Unmastered CD's, even those mastered by some dude with a Dell laptop and some free program, get tossed in the garbage by more radio stations, promoters, and label executives than I care to research right now.

So now you heeded my advice and you have a killer demo of your tunes.  Here is how that one little product can change your career.

Your "quality" demo can be uploaded to a digital ramp service provider like ReverbNation or TuneCore to get your tunes in the digital music stores such as iTunes, Rhapsody, and Amazon along with the multitude of streaming services out there.  Or it can be used to press CD's to sell at your shows, to your friends, or your parents.  I hope your parents are buying your music, or at least taking the cost off of the food and rent you currently owe them among other things. Now you have created a product that can sell and earn you some cash, but there is more to it than that.

Your demo will be used to get clubs and promoters to book you at shows.  Who do you think they are going to hire the group that calls them and says: "Hey dude we are the next Metallica. We don't have a CD for your to hear, but trust us we are awesome the drummer has the most expensive kit you can get" or the band who is able to direct them to their music on iTunes, or even send the owner a copy of the CD?  There you go that "quality" demo can help you land shows.

Ok, so now a few club owners bit and you have some gigs.  With your music available you can use it to promote that show with journalists, radio dudes, and possible fans.  The more people you get in that door the better and the best way to get them there is to showcase how great your music is.

Once the show starts you now have a room of fifty people exited to hear you.  With music available you can sell them CD's or hand out free stickers that push them to your website where they can buy or download that music for free.  You can even give away discs to people in the audience who traveled the farthest to your show or street team members who hung posters promoting the event.  Basically your music can be used to build your fan base and as a sales point at the same time.  You need good music to do that.  You need a good product.

Then down the road you are playing to 400 people a night.  Your website and Facebook page is jammed with thousands of fans and "like" comments.  All the sudden you are on a labels radar and they sneak into your next performance.  Like what they hear and offer you a deal.  It is now your choice to accept or tell them to fuck off, because you are doing just fine on your own.  I suggest you sign, but that's another blog.

The point is this I have never heard of a label signing a band without first hearing their music.  Sure they have created bands out of the blue like NSYNC and 98º, but they knew that these cats could sing and perform before they invested.  The labels understand that this is a business and at the core of their business model is music.  If you call them and tell them how great you are they won't care.  You have to show them how great you are which means you must show them that you can connect with fans and make them buy your music.  How can you do that if you never recorded a demo?

I will end this blog with a great point to hammer home that demonstrates how important good music is. One of my favorite groups is The Dave Matthews Band.  Their music was so good that a local bar owner named Coran Capshaw sold his business to manage them band.  In an interview he stated that the biggest factor in his decision was the quality of the group's music.  Because the group had such great music they peaked the interest of one of the best managers to walk this planet.  This manager helped them sell close to 40 million records worldwide, win a Grammy, and sell out some of the biggest venues on the planet.  As Capshaw saw it is all about the music, your product, in this business.  Why rush creating that product?  Why try to sell someone a bridge you do not own?