360 Contract of Live Nation

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The “360” contract is an agreement between an artist and a company where the latter handles all the management aspects of the artist’s performance and output, marketing and organization of tours and concerts, sales of merchandise and endorsement deals, and the management of the artist’s fans club [3, 4, 7]. The contract outlines how both parties share in the cash proceeds generated from all these revenue sources. While most artists who enter in “360” deals are unknown, famous ones like Madonna, Jay-Z, and Shakira signed similar contracts recently [2, 9, 11]. The “360” contract is so-called because the deal covers the whole range of an artist’s outputs. Using the image of a circle-shaped pie, the traditional business model in the music industry is one where an artist enjoys more control over the different slices of the so-called income pie. In the past, a major record label such as Warner Music, Sony, or EMI licenses the artist’s songs and handles the marketing and production of the media (tapes or CDs) in which those songs are sold to the public. The artist, either on her own or with other companies, signs a separate contract for live tours, merchandise (such as clothes and knickknacks), and fan club management and the sharing of income [6, 7]. In this traditional model, record labels earn their money selling or licensing the music and does not earn from the artist’s live performances and endorsement or merchandise sales.

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