Media Consolidation Essay Example | Topics and Well Written Essays - 1500 words

Media Consolidation - Essay Example This paper will discuss the 360 deal and what it means to both the artist, the recording companies, and the public at large. There are some shades of the past here. There was a time when the recording artist wrote a contract with the record company, only to receive the amount of the contract, no matter how big the artist got or how popular the song. Many of these artists died poor. Are artists headed into the same kind of contract(Hoffman, 2010). The entertainment industry will never be what it has been again, it is changed forever. In the past, the artist gave up the rights to the recordings that were made to the record industry. The artist usually got advanced royalties and the record companies paid the cost of production. This worked good for the record companies until the decline of records, now there must be some kind of transition in the business (Hoffman, 2010). There are actually two types of 360 deals out there right now. In the first case, the record company will continue to control the profit from the sale of the artist's recordings and related products but will gain a percentage funding from the artists other revenue streams. In this case, the labels non-record income from these other income streams is small and amounts to an override percentage. The labels argue in this case that what they do is driving all the other income streams as well and this percentage will allow them to drive more development for the artists (Weaver, S. 2007). The second type however, is a much bigger deal. In this, the record company participates in non-record income. They partner with the artist in profit and decision making. This might get the record companies net incomes as high as 50%. The newer artists, similar to those so many years ago would have no strength against a contract like this one. The label has all the power in this case. These artists need to be sure to have a good lawyer to negotiate these deals (Weaver, 2007). Needless to say, this is very controversial. Is this just a way for the record companies to increase revenues during a time when record sales are at their lowest The artists see it as one more attempt to see the artist as income instead of managing their business well. There is also the feeling the music becomes less important as each of the labels brands the artist in order to bring about more interest. The labels argue that this kind of a deal allows them to make more money and therefore they can take on more unknown and new artists. This says this gives them the chance to work with the artist longer and staying for the long haul. Making a decision as an artist to sign or not to sign a 360 deal has become complicated. The whole point of a 360 deal is for the record company to get a cut of the revenue streams that an artist creates. There is question here as to whether the record labels have the expertise to manage all of these kinds of revenue streams. If not, then the artist will pay the record company and someone else to manage their business. There are also decisions about percentages and how much money that actually leads to. Attorneys need to be involved to be sure that the deal that is being signed is the deal they think it is. (McDonald, 2010). There are, of course, pros and cons to every deal. Many say that the 360 deal allows a record company to spend some time and money scouting