The Trend of New Record Deals and How They Are Signed

The music industry has undergone many changes throughout the decades. From live recordings in radio stations to being able to produce an entire record at home with programs such as Audacity and Pro Tools, the music industry is in a constant state of transformation. The transformation could be linked to political change, economic status, or social rebellion but the major change may be credited to the technological advancements. File-sharing programs have significantly reduced the sales of records and labels are seeking new innovative ways to restore that loss of income. Live performance is a source of income that record labels do not traditionally retain financial gain. An artist can gross anywhere from $300,000 to several million in one sold-out show, not including the sales in merchandise. A new deal known as "The 360 Deal" is starting to emerge in the industry. This deal includes but is not limited to record sales, live performance, and merchandising. Artists such as Korn and Madonna have recently embarked on this upcoming trend while Radiohead embraced a highly differential experiment on selling their new records.

Korn, who was formally signed to Epic, broke a deal with EMI record label for a two-album/ two-tour deal with $25 million up front, which could be easily recoupable from the touring alone. EMI's investment earned the company 30% of Korn's overall business, which includes record sales, touring, merchandise, publishing, and licensing during the 10-year duration of the contract (Titus). Jonathan Davis, a band member of Korn stated, "We're partners in this business so when the label promotes us, we win and they win because we're getting 70% and we're receiving stuff that's never been received before unlike shady label we've worked with before where we had to clean up their mistakes (Titus)." With this new deal, the band also released digital and audio bundles at their own set price of $1.98 to iTunes because the band retained the digital rights. Critics claimed that this new deal could have hindered the record label's projected revenues, since Korn's record sales had declined since the 90's according to Nielson SoundScan. Korn still had strong and loyal fan base and great tour successes, therefore, by retaining earnings from touring, the live performance compensated for the possible decline in record sales. The short-term effects of the new deal for Korn and EMI seemed to be profitable. Both parties received percentages regardless of the outcomes, therefore, by the short-term effects being positive, then future endeavors could transpire such as EMI getting the same deal at a greater percentage for upcoming artists and Korn resigning with EMI in order to have more control over their career.

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