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Don Valentine Don Valentine is a venture capitalist with a heavy influence in the technology industry in the United States. Don has a B.A....
Sunday, December 19, 2010
In this very interesting interview with Professor Michael Eric Dyson and recording artist Lupe Fiasco some very interesting issues were raised and addressed.
Early in the interview Lupe states his firm opinion opposing 360 deals. The 360 deal format emerged as a result of the decline in record sales. In an attempt increase the profit margin for the major record labels this new deal structure was created and it has polarized the industry. Artists have been largely opposed to this particular deal structure because it allows the record company to tap into revenue generated from performances and merchandise which has traditionally been the main source income for artists. In principal this means less of a percentage for the artist but my question is whether or not this automatically means less money. If the company can help to generate more total revenue by helping with live show productions and the merchandise sales then the deal could potentially be lucrative for the artist. Right?
The deal will only be beneficial for the artist if the record company is ready, willing and able to support the efforts of the artist and expand the artist brand. A lot of artist who experienced success in the era of heavy CD sales have already established and built brands under the old industry format. Also, many artists have experienced independent success and have very profitable businesses. Therefore, many of these artists and companies feel that a 360 deal would take away artist revenue without necessarily contributing to the building of the brand. On the other hand, a new artist without an established brand or fan base may have an extra incentive to do such a deal.
The deal structure in general may be more beneficial to newer less established artists and with the old format being phased out a lot of the artist who were successful in it will ultimately be left out in the cold.
As artists and Major record labels compete and scramble to find the next lucrative business model, many of yesterday’s popular artist will find that without serious adaptation they will not be able to survive. The industry is changing in a way that is forcing artists to be creative not only with their music but with their business strategies also.