Music labels suffered significant losses when music streaming companies disrupted the marketplace. Artists were less revenue from music sales, affecting the profit percentages music labels received. To stress matters worse, the switch from CD sales to digital downloads never accounted for the lost revenue. Cash-strapped labels began to restructure their contracts to become more involved with monetization: touring, merchandising, licensing, and more to increase their share of artist revenue. Thus the 360 or "all rights" deal was created.
A 360 recording contract gives the music label more control over an artist's brand. What was once the exclusive domain of the artist (i.e., live shows, sponsorship deals, and merchandising) now falls under the purview of the music label. The increased control is because the music label is directly responsible for maximizing profits. A music label may force the artist's creative direction to generate more revenue. The idea is that the music label makes a bet that it can pluck an artist from obscurity and turn them into multi-platinum household names.
This recording deal structure has been the target of significant backlash from artists and their management. Music labels often struggle to determine the best creative direction for an artist. This inefficacy makes costly mistakes for the artist's brand and the label's bottom line. Furthermore, this leads to a concern that the blunder on the part of the label will lead to the artist being shelved. Ultimately these issues leave artists feeling that music labels are flatlining creativity while unjustly taking a massive cut of the profits.
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