Almost every new Atlantic signee inks a 360 deal, sharing revenue with the label from not only albums, downloads and streaming but also ticket and merchandise sales -- a common deal structure across the industry over the past decade. But while such deals have received pushback in recent years at labels with less touring support, the 360 deal is making more sense than ever in many cases as the music business confronts an awkward new digital-era reality: Young acts arriving at labels are shorter than ever on touring chops. And in many cases, those live skills are still what separate labels' career artists from their one-hit wonders, execs say.
“These artists are learning on the job,” says Warner Bros. Records senior vp A&R Eesean Bolden.
To deal with such scenarios, Atlantic has boosted the personnel in its touring/artist development department from five to 10 over the past five years, hiring promoters and agents to prep artists for the road. “If we’re going to collect money on live touring income, we’d better bring something to the table to help our artists grow in that capacity,” says Harlan Frey, a senior vp in the department.
After 15-year-old pop singer Ruel applied his crystal-clear voice to “Golden Years” in 2017 on Triple J radio in his home country of Australia, his Instagram feed went crazy -- he instantly drew 5,000 new followers, which was enough to start a bidding war among international record labels. RCA Records won, signing him in September 2017 to a deal that included a portion of his future touring revenue. But at that point, Ruel had never played outside Australia, didn’t have a tour bus and, again, was only 15.
RCA helped Ruel secure a working visa, connected him with a booking agent, provided financial tour support and bought dozens of tickets so media could attend his concerts and boost hype. “You need that little kick start, that little push from the label to get you there,” says Nate Flagrant, the singer’s manager. Ruel just finished a sold-out theater tour of Australia, New Zealand, Europe and North America.
“If they’re coming through the door and don’t know how to do X, Y or Z, we’ll help them. We will find and fund rehearsal spaces,” says RCA co-president John Fleckenstein. “If they need session players or band members, we will help connect dots that way.”
Not every label has beefed up its touring department, so some are hiring more freelance talent coaches to help groom their young stars-to-be. “It’s just a shorter time period. Once these guys are signed, they’re going on promotional tours,” says Fatima Wilson, a New York-based agent at Bloc Talent Agency, which worked with Ayanis to hone her dance skills. “We’ll refer them to vocal coaches. The choreographers will give them regimens so they can help enhance what they’re doing, breath control.”
Charm Ladonna, a veteran Los Angeles choreographer who helps artists with their live pacing and speaking to crowds, says she has “quite a few relationships with major labels.”
Supporters of 360 deals call them partnerships. In 2005, Paramore shared a portion of tickets, merch sales and sponsorship along with album sales when it signed with Atlantic through independent label Fueled by Ramen, and Korn gave EMI a 30 percent stake in all of its profits, including concert and merch sales, in exchange for what amounted to a $25 million advance. Lady Gaga’s early deal was a 360. The Fever 333, a new rock band, has toured regularly but still makes most of its revenue from T-shirt sales, and Warner-owned hard-rock label Roadrunner made a deal with the group to share that income. “The general feeling is that the investment [in artists] is still quite risky, so having a return from multiple rights still seems important, especially on new bands,” says Peter Katsis, the band’s manager. “It seems a necessary evil. We all do count on these labels for not just tour support, but also for additional funding to help make a great show: lights, backdrops, wardrobe, choreography or even vocal lessons.”
Indies, too, ink 360 deals -- Berry Gordy Jr.’s Motown Records famously trained its stars to succeed on the road, and Disney has done the same for years because, as veteran artist attorney Ben McLane says, “They’re taking a nobody and making them into a somebody.”
Layto, a singer-producer from Massachusetts, gained traction with fans earlier in 2018 on prominent YouTube channels with his song “Little Poor Me” before Denver manager Brian Schwartz signed him to a management deal, including touring and recording with his indie label. “Now we’re just developing,” says Schwartz. “He’s comfortable onstage, and the band’s getting tighter.”
Paradigm’s Tom Windish, a longtime agent who represents Lorde, Billie Eilish and alt-J, says he often takes chances on inexperienced artists who can “go on tour and figure it out.” What’s new in the streaming world is that many investors’ expectations are higher for an immediate return, given the worldwide exposure.
“Anyone can make a record these days and put it up online,” says Atlantic’s Frey. “When the music is great and things heat up very quickly, we need to react to match the heat of the artist -- and in some cases, that artist hasn’t even picked up a microphone yet.”