Avoiding The '360 Deal' Snare
By Larry M. Elkin
In an epic battle, suitable for a (relatively) big-budget YouTube video, an army of
powerful but faltering giants faces off against a small but nimble band of rebels
trying to secure their independence.
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Instead of a trailer for a new fantasy series, this is a decent description of the state of the music industry. Big record companies swing
snares in the form of increasingly standard "360 deals," while unsigned artists who value their artistic and financial independence try
to go their own way by building a direct connection to their fans and supporters. One such connection gaining in popularity is
Patreon.
Patreon, which was founded in 2013, is a crowdfunding platform. Unlike Kickstarter or GoFundMe, however, Patreon is not set up
to fundraise for a one-time lump sum. Instead, the idea is that fans (or "patrons") subscribe to support a particular artist's work over
time. While Patreon is so far most popular with artists who run YouTube channels, it is also used by other musicians, podcast
creators and webcomic artists.
Musician Nataly Dawn, who is half of the band Pomplamoose in addition to working as a solo performer, was an early and vocal
supporter. (Her collaborator Jack Conte is Patreon's co-founder and CEO, though Dawn observed in a recent interview he has not
been taking a salary in that position, instead earning his living from his music through Patreon and elsewhere. (1)) She has also
lamented the fate of artists with labels who are not able to make a living after the label takes their cut of their earnings. And while
many of the artists on Patreon have niche followings, a few bigger artists have moved to the site, including a cappella group
Pentatonix and singer-songwriter Amanda Palmer.
For a young artist, a 360 deal like the one Dawn criticized represents the opposite end of the spectrum from Patreon. Such deals have
been around for years now, but are becoming increasingly dominant. An established record label has capital, connections, a brand
name and access to other big companies, such as those specializing in tour management, ticketing or music video production. The
label offers to use these resources to make an artist famous; in exchange, the label will take a cut of everything from tour revenue to
merchandise to endorsement deals. Instead of simply selling the artist's records, the label inserts itself into every part of an artist's
revenue stream.
On the other end of the scale, creators working totally on their own take responsibility for developing their personal brand, delivering
their product to fans (whether videos, songs or other pieces of art), and building a direct relationship with an audience. This direct
artist-audience connection exists today in a form that has only been possible for the last decade or so, and it is what fuels a model
like Patreon. While Patreon does take a 5 percent cut of pledges, it does not touch revenue from any other sources.
The implications of Patreon's model extend beyond music, and indeed musicians are not the only, or even the dominant, group to
flock to the site. Filmmakers, especially those interested in the short film, were formerly limited to audiences mainly at universities
and film festivals, but now have the means to reach any interested viewer with a sufficiently fast Internet connection. Podcasters,
whose platform exploded in popularity with last year's "Serial," have long relied on voluntary listener donations; they now have a
new option for structuring that income. Investigative journalists who make a name for themselves have an option to garner support
for a project free of some of the pressures that come from working with a traditional publication. Opinion writers may be able to
draw on their audiences too. Fiction authors might even avail themselves, suggesting the potential return