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NASHVILLE SKYLINE: 360 Plan -- Artist Benefit or Rip-Off?

Record Labels' New Profit-Sharing Plan Causes a Stir

(NASHVILLE SKYLINE is a column by CMT/CMT.com Editorial Director Chet Flippo.)

I'm sure you know about the 360 trend in the music industry today. In the 360 plan, the record label essentially takes a percentage of an artist's tour revenue and money from merchandise sales. I hear it usually started at 30 percent, but I understand that it can be higher. In exchange, supposedly, the artist receives enhanced career development and guidance, advanced marketing and perhaps tour subsidies.

This 360 plan, also called a "multiple rights" plan, began in the modern era when labels began noticing a downward spiral in CD sales and searched about for ways to enhance their revenue stream. The initial reasoning was that, since the labels supposedly raise, nurture and guide the artists' careers, they are entitled to their "fair" share of the money the artist makes as a result of success achieved in the marketplace. So what had been for many artists their main income suddenly becomes whittled down.

There are, as you have already begun mentally listing, a lot of potential drawbacks to this path. Not all artists got where they are as a result of a label's due diligence. Many artists, because of the nature of their temperament and their music, are not better off on a major label. Most labels today have stripped their staffs down so lean that there are few, if any, employees left who are skilled at those career development and maintenance skills that are supposedly part and parcel of 360. Plus, an artist still must pay a manager, a booking agent, a lawyer, publicist, etc. I'm sure some bands can benefit from the practice -- if their label will sustain them through the lean times and truly break their careers, as opposed to breaking down their careers.

This practice is anything but new. Many, many popular music artists have been virtual indentured servants, whether to labels or to managers. Record label payouts to artists have been suspect for many years and in many documented cases have been nonexistent. The history of many of the greatest blues and soul singers is a tawdry litany of rip-offs. Managers themselves have been financial and career tyrants, as in the case of Colonel Tom Parker, who guided vast fortunes out of Elvis Presley's pockets into his own hands.

A classic 360 case is the career of the true country music legend, Hank Williams. He was signed to Acuff-Rose in Nashville virtually out of the backwoods of Alabama and agreed to anything. The great songwriter Fred Rose, who founded Acuff-Rose with Roy Acuff, did indeed guide Williams to true musical greatness. Along the way, he wrote many of Williams' songs (sometimes credited, sometimes not) and polished them to a fine sparkle. He became Williams' producer before that term even existed in the industry.

Acuff-Rose was nominally a publishing company (it was Nashville's first). But Acuff-Rose also virtually took over Williams' entire career. They were his manager, his accountant, his lawyer, his publisher and his booking agent and promoter. The only thing they weren't was his record label, but they handled Williams' deal with MGM records. They planned their own record label and launched Hickory Records the year of Williams' untimely death at age 29. I don't know that anyone knows just how much money Hank Williams earned in his short career or what really happened financially throughout that career.

I suspect the same thing is still happening in many music careers.