In times of music downloading from the Internet and free online radio stations it seems as if money in the music         business cannot be made anymore by selling music only. Clashes in ideas about the value of music have made it difficult to profitably sell music. The leaders in the music industry and many long-established artists as well as newcomers are trying to find new approaches to make a profit with music. Many artists – such as the singer Madonna - jump into so-called 360-degree contracts to be able to make a living. However, at the same time they also get into a state of complete dependency on their contractor. Some are fond of this new idea, others completely opposed to it. Questions about property rights, creativity and motivation arise as well as about the work relationship between artist and label.

The 360-degree contract is the newest approach to earning money in the music business (Kuhn, 2007). It is a contract between musician and label, which is not only about selling music, but also about other activities surrounding the artist such as merchandising, biographies, films, music for sponsoring , making it available for advertising purposes and most important even their concerts. This implies that the record label or other contractor will not only earn a percentage of the music sales, but also from all other artist activities. The contract is all-encompassing – 360-degrees. Music on the web starts to function as a form of advertising for all those activities. As Kuhn (2007) claims this is an 'all you can hear'-approach to music-marketing: The consumer is allowed to listen to whatever he wants online as long as he eventually purchases some product connected to the artist.

The concept of this contract has been adopted by many musicians already and many more are about to sign such a deal. Madonna – the self-crowned queen of pop – is an infamous example for one of those who signed such a 360-degree contract. In October 2007 she changed from the major label Warner Music to the concert- and artist-agency Live Nation. This ten year deal was claimed to be worth around $120 million (Mayerowitz, 2007). For this amount Live Nation will have complete access to the superstar and a holding of all rights of her music-projects such as her albums, tours, merchandising and films. Madonna sees this as her reaction to a paradigm shift occurring in the music business, leading away from the usual selling of music to new areas (Mayerowitz, 2007). She sees it as a way towards reaching her audience without any limitations, since in this contract she has possibilities that were not given to her before (News Aktuell, 2007). Newcomer bands, as the American band One Republic, who signed a contract with Universal Music, also see advantages in those all-encompassing deals. They experience it as help and a contribution to pave their way in the music business (Radiofritzen_FRITZ, 2008).
CNN report on Madonna's change to Live Nation

It is only natural that the big record companies all adopt this new approach. Sony-BMG Germany alone made 252 of such deals in 2007. Most of them with newcomer bands and others with established artists, who prefer to contribute money only from either their merchandising or their concerts (Schmidt-Holtz, 2008). It is no wonder that the record labels are interested in these all-encompassing contracts. They get the opportunity not only to earn from the music, but also get a big piece of the entire artist-pie. And as mentioned before some of the musicians see that as an advantage. The proponents think that they can produce under less pressure from their contractors, since those get their share from the profitable concert branch (Radiofritzen_FRITZ, 2008).

However, not everyone in the music business is as convinced of the amenities of the 360-degree contract. Those opponents see drawbacks and dangers in such contracts. They call them “adhesive” or even well-paid slavery (Röttgers, 2003). This might sound somewhat harsh, but becomes understandable when looking at how and from what artists actually earn their money. Usually the artist gets an advance payment which is calculated according to the profit his music may raise. He will eventually have to pay back this amount from the returns he received from the sales of his product. Due to this practice, as Fox (2004) reveals, the majority of the musicians do not make any profit with the sales of their music at all. Most artists actually have to make their living mainly through touring and merchandising. Only a few worldwide superstars can still earn from record sales (Wallis et al., 1999), but even those are pushed into all-encompassing contracts by their management and record companies.

Robbie Williams is one example - and also the first - of a superstar that signed a 360-degree deal. In 2002 he agreed on the terms of an all-encompassing contract with the major label EMI, which brought him £80 million for the production of five albums. To EMI it brought a share of the revenues from his concerts and merchandising. His example was copied by many companies and has developed to what is now called a 360-degree deal (Röttgers, 2003). However, although the contract seemed profitable for both parties at first, for Williams it turned out differently - at least when looking at returns in a non-monetary sense. The singer and entertainer claimed that the practices by his label EMI and especially CEO Guy Hands are comparable to those of a “slave trader” (Steffes, 2008). He feels, as well as his fans, that his output is not about his music or himself anymore. Due to the extreme sponsoring of his tours, they have become the trade-shows for products and do not leave him much room for artistic expression (Steffes, 2008). Claiming that his 360-degree contract is the reason for this, Robbie Williams and his management want to opt out of the deal. An intention that is not as easy to fulfil facing the fact that the musician has only recorded three of Robbie Williams                                         the five albums so far. The account of Robbie Williams’s experience with the 360-degree contract also leaves room for another side-notion, namely that of questions about the intellectual property of the artist’s performance.

As mentioned above, the artist had usually received his main income from live-performances and merchandising. They were always secured by a fee and a copyright on their performance that was to guarantee them revenue from broadcasting their live-shows and music (Wallis et al., 1999). The returns from the concerts were mainly theirs with deductions that had to be given to tour-agencies and management. Following views on intellectual property this only makes sense. According to Woodworth, intellectual property rights should be connected to the human moral of respecting somebody else’s work and belongings (Woodworth, 2004). He refers to the philosopher John Locke, who thinks that a human being himself is his own property. Thus, every form of a human’s work and its results are subject to his own responsibility and his work becomes his own property (Locke in Woodworth, 2004). In this sense of property a musician, artist or author can claim his “natural right of property” (p. 164) in his works. Of course each artist is free to choose an all-encompassing deal with a record company or other agency. However, this natural right in his work leads to a discrepancy between the will of the musician, and the claim of the contractor as well as their understanding about what is owned by whom. The artist considers his concerts as the last fortress of his creativity that he still truly owns. With a 360-degree contract the music industry leaders even grab of a share of this and diminish the artist’s rights in his intellectual property. This is also problematic from a viewpoint of work-motivation and the employer/employee relationship of label and artist.

Two of the main theories in the field of work motivation could give an account for why all-encompassing contracts could impede the artist’s creativity and hence lead to less profit. They are Maslow’s (1943) Need Hierarchy Theory and the theory on intrinsic vs. extrinsic motivation (Latham, 2007). The former deals with a pyramid of needs: the physiological (basic) needs being at the bottom, followed by safety, love, esteem and self-actualisation needs. When the basic needs are fulfilled one can climb up to the next level and hope to realise it. In the case of a 360-degree contract the physiological and safety needs can be fulfilled. Often the fear of not having the money to satisfy the basic needs could make the musicians slip into such a deal (Röttgers, 2003). In the contract the artist gets an advance payment, is more than capable of feeding himself, buying a safe home, being loved by the masses and maybe even buying himself big status-symbols, which build up his self-esteem and leads him to the sphere of self-actualisation.

But what happens when the hierarchy of needs has been satisfied and much of the money has been spent? Would it affect the artist’s motivation to deliver a creative product? And could this lead to a scenario such as the one experienced by Robbie Williams? According to the theories on intrinsic and extrinsic motivation this could actually be true. This theory claims that people can either be intrinsically– out of one’s own interest – or extrinsically motivated –                               Maslow's Need  Hierachy                    due to inducement by others. Deci (1975) said that money – a form of
extrinsic motivation – can actually have a negative effect on work motivation. When an activity is performed for money only, a lack in personal interest is experienced. The feeling of self-determination diminishes (Latham, 2007). Especially since the artists in our case are paid in advance a lack of intrinsic motivation to write new material or to perform well could follow. They already have the money, their needs are satisfied and hence they could not feel motivated to fulfil the clauses of the contracts. Since they give away even the control over their concerts their motivation could go missing quite easily.

Finally, as Keith Negus (1997) explains, the culture of production - so the corporate culture and attitude - also influences the production of culture - in our case the output of the artist. When the record label gets increasingly greedy, this will probably steal the motivation and then reflect in the music and concerts of their musicians. In Robbie Williams’s case this could be the reason for his announcement to go on a strike and not to release his next already recorded album (Steffes, 2008). EMI has invested an extreme amount of money in him and still they managed to alienate the artist.

Broussard (in Röttgers, 2003) sees the solution to this in a different approach to artist-contracts, which is already employed in the TV and film sector. There the actors are employed by the filming companies and do not work on a provisional basis. They earn a fixed amount per month and experience much more security. Thus, instead of giving them huge deals, a more stable and secure relationship could benefit both the record company and the artist. However, this is easier said than done. As Fox straightforwardly puts it “digital downloading is transforming the music business from a product to a service business” (Fox, 2004, p. 213). The general upcoming trend in the music business leads to a shift from profit earned from the distribution of records to income from the use of music on the broadcasting media and concerts (Wallis et al., 1999). As already mentioned, nowadays, the musicians have to earn from other activities rather than focusing on the product of music alone (Röttgers, 2003; Schmidt-Holtz, 2008).

A new approach to music on the web could be an alternative to the all-encompassing contracts (Fox, 2004). Bands, such as the British electro-rockers from Radiohead, have already experimented with that (Pilz, 2007). They showed that asking the consumer for a voluntary donation for an album they put online for free could work as advertising for the physical product – their CD – and their concerts. They left their major label in order to be free from any creative constraints and to earn the money they can. Others have followed their example or do not even seek contact with the big record companies. This new trend is maybe not quite what the music industry had in mind when inventing the 360-degree contract.