Why TMG's Contract Rocks and 360 Deals Suck

I found a great article on 360 deals written by someone that is paid to understand them better than anyone else. Bob Donnelly is an attorney with Lommen Abdo out of New York and he played a key role in sparking an investigation of Majorlabel "suspense accounts" which resulted in a settlement that paid artists $55 million in past-due royalties.

Donnelly writes in his article that artists should do a 180 on "360 Deals". Well what is a "360 Deal" some might ask. A 360 Deal is where the label owns a percentage of everything the artists is involved in. From touring, publishing, endorsements, merchandise, record sales, books, movies, fan clubs...EVERYTHING! The crooked aspect is that most labels demand that their percentage of earnings come out of GROSS revenues as well as cross-collateralizing where they will take positive earnings from one category and applying it as a record company expense that affects the artist's unrecouped balance in another category. Basically postponing the day when an artist actually receives a positive cash flow.

In the past record labels simply passed costs of doing business along to the artists in the form of artists royalty reductions. I wrote a blog about a band back in the early 90's that recorded 3 albums with Warner and still owes $400,000. Now the power grab is even crazier because these 360 deals are becoming the norm.

The points above are just the tip of the iceberg, but the important point I want to make is that it is imperative for the artist to retain ownership of copyrights and master recordings. Tate Music Group is a partner in the music business. TMG doesn't ask for ownership or a percentage of ownership of an artist's music rights. We want to partner with artists who are willing to work to take their music to the next level. Tate Music Group offers manufacturing, marketing, promotion and distribution outlets that will help an artists actually make money from the start. Making money from your product ROCKS!

Social networking is so important in today's music economy. There are tons of platforms to launch ones music out to the masses in companies like YouTube and MySpace. Even more so 95% of all digital downloads result from 3 websites (iTunes, Amazon, Rhapsody), and all three are a part of Tate Music Groups Distribution network.