What is a 360 deal? Record deals explained
In a traditional record deal the label earns from your recordings. In a 360 deal it also earns from the rest of your career: shows, merch, publishing, brand deals. Here is how both work, how the money moves and what to read before you sign.
This is a general guide, not legal advice. Deal names are not standard: two contracts called “360” can be very different. What counts is what each clause says.
What a record deal is
A recording contract (record deal) is an agreement between an artist and a label. In its classic form, the label pays for recording, marketing and distribution, often with an advance to the artist, and in exchange owns or controls the masters and pays the artist a royalty on what the recordings earn. The advance is not a gift: the label usually recovers it from the artist’s royalties before paying anything else. That is called recoupment.
Recordings are one stream among many. How songwriting royalties, neighbouring rights, sync and the rest are paid is in how music royalties work and how to make money from music.
What a 360 deal is
A 360 deal (also called a multiple-rights deal) gives the label a share of income beyond recordings: live shows, merchandise, publishing, sponsorships and brand deals, fan clubs, appearances. The argument for it is that the label invests in the whole career, so it shares in the whole career. The argument against it is that you give a share of income the label may do little to create.
Inside a 360 deal, two kinds of rights matter:
- Active rights: the label runs that business itself (for example, it makes and sells your merch) and pays you a share.
- Passive rights: someone else runs it (your booking agent, your publisher) and the label only receives a percentage of what you earn there.
Passive rights deserve the closest reading: the label is paid for work it does not do, so ask what it offers in return.
Pros and cons of a 360 deal
Whether a 360 deal is good or bad for an artist depends on what the label puts in and what it takes. The same structure can help one career and hold back another.
| For the artist | Possible upside | Possible downside |
|---|---|---|
| Money up front | A larger advance or budget, because the label expects income from more areas | A bigger balance to recoup, sometimes from more income streams |
| Team and reach | The label can work tours, merch and brand deals alongside the record | On passive rights you pay a share even when the label does none of that work |
| Long-term commitment | A label with a stake in your whole career has a reason to keep investing | Shares of shows or merch can last as long as the deal, and sometimes longer |
| Income you keep | Clear percentages make planning easier | Less of each show, merch sale or brand deal reaches you |
A useful test: list every area the label takes a share of, and next to each one write what the label will actually do there. Where the second column is empty, negotiate the percentage down or out.
The main types of deals
| Deal | Who owns the masters | What the label earns from |
|---|---|---|
| Traditional record deal | Usually the label | The recordings, through a royalty paid to the artist |
| 360 deal | Usually the label | The recordings plus a share of other income (shows, merch, publishing, brands) |
| Licensing deal | The artist; the label licenses them for a term and territory | The recordings during the license |
| Profit-split deal | Varies | Profits after costs, shared in an agreed proportion |
| Distribution deal | The artist or their label | A fee or percentage for delivering the music to stores |
The real difference is often not the name but three numbers and one date: the royalty or split, the advance, what is recoupable, and when (if ever) the masters come back.
Advances and recoupment, with numbers
The figures below are made up to show the math; they are not typical rates.
- The label pays an advance of USD 20,000 and spends USD 30,000 on recording that the contract makes recoupable. Your account starts at −USD 50,000.
- The contract gives you an 18% royalty. If the recordings bring the label USD 100,000, your share is USD 18,000, and it goes to the account: now −USD 32,000.
- You receive royalty payments only after the account reaches zero. In this example the recordings must bring in about USD 280,000 in total before you see another dollar from them.
- In a 360 deal, check whether the label’s share of your shows or merch also pays down that balance, and whether your earnings from those areas can be cross-collateralized (used to recoup costs from another area or another album).
Two things follow: an advance is usually money you will not get twice, and every cost the contract calls “recoupable” is paid from your share.
The clauses to read twice
- Term and options. Is the deal for a number of albums or years? Who decides whether it continues? Options that only the label can exercise can keep you signed for a long time.
- Ownership and reversion. Who owns the masters, for how long, and whether they revert to you after a term or once the account is recouped.
- Royalty base. What your percentage is calculated on (gross receipts, net receipts, a price) and which deductions come first.
- Recoupable costs. Recording, videos, tour support, marketing: which ones come out of your share.
- Ancillary income (the 360 part). Which income streams, which percentage of each, gross or net, and for how long after the deal ends.
- Cross-collateralization. Whether income from one album or area can recoup costs from another.
- Creative control and approvals. Song selection, producers, artwork, release dates, and the use of your name and likeness.
- Delivery and commitment. How many recordings, by when, and what counts as “acceptable” delivery.
- Accounting and audit. How often you get statements and your right to audit the label’s books.
- Exit. What happens if the label stops releasing your music, is sold or you want to leave.
Questions to ask the label
- What exactly will you do in each area you take a share of? Who on the team does it?
- What is the marketing commitment for the first release, in writing?
- Which costs are recoupable, and is there a cap?
- When would the masters come back to me?
- Can I see a sample royalty statement?
Before you sign
Compare the deal with doing it yourself: with a distributor, your own small label and a release plan, you keep the masters and all the income, and you pay for everything. A deal can be worth it when the label brings money, a team and reach you can’t get alone — and when the contract says so.
Upload the contract to TONTRIA Law for a first pass: it marks the clauses on term, ownership, percentages and recoupment, quotes the exact text and suggests what to ask for. It is an AI legal assistant, not a lawyer: for a record or 360 deal, have a music lawyer review the final version before you sign. The other contracts you will meet along the way are in music contracts: the 14 agreements musicians sign.