Every musician, artist, manager and anyone else serious about the music industry should get Entertainment Attorney, Kendall Minter’s new book, “Understanding and Negotiating 360 Ancillary Rights Deals.” Kendall Minter Esq., is one of the prime leading entertainment attorneys in the US and in this book he shares his experiences of 35 plus years in the music industry to inform today’s artists and industry related persons about the changing landscape, and culture of the new business model for record deals between artists and labels/entertainment companies.
Examiner/Muzilog’s writer, Samuel Archer had a moment to interview Mr. Minter. The interview was transcribed by Nadira Norjahan.
Sam: Good Morning, Mr. Minter!
Minter: Good Morning, Mr. Sam Archer!
Sam: It seems that our paths were destined to cross again.
Minter: Yes, indeed.
Sam: I am excited to interview you about your new book. However, let’s discuss what drew you into Entertainment Law initially.
Minter: I had an interest in Law from middle school through my college studies at Cornell University. I investigated several areas of law. Having a passion for music as well as an interest in film and television, I chose Entertainment Law. The business aspect of entertainment was intriguing.
Sam: Let’s talk about the inspiration to write your book, “Understanding and Negotiating 360 Ancillary Rights Deals: “ An Artist’s Guide to Negotiating 360 Record Deals.”
Minter: I realized the lack of understanding that people have regarding the entertainment industries. I wanted to clarify for artists, managers, producers, record labels and even attorneys what exactly a “360 deal” is. Most have heard of this deal but do not understand the intricacies of how to navigate and negotiate it. I have completed hundreds of 360 deals over the past ten years because they are part of a standard record deal. Back in the day, record companies were making a lot of money on sales of CDs. Then, as you know in the past ten years, CD sales have begun to decline as the internet exploded. So, people stopped purchasing merchandise from retail and record stores and digital downloads became the popular, sales and revenues declined at all record labels because people weren’t buying music the same way. The loss of these sales had not been made up with digital downloads, so RIAA (Record Industry Association of America) has reported that even digital downloads through iTunes and other portals are decreasing. Therefore, there is less and less money for a label to make and invest in an artist. As a result, record labels sought a new income revenue streams by the artist’s ancillary income. Specifically, a 360 deal provides for the record company to get a percentage of the income that the artist makes from what we call “non-recording income streams” such as merchandising, live engagement, touring, book publishing deals, sponsorships, endorsements, appearances in film and television, etc. Record labels are now demanding and in most cases receiving a significant portion of what the artist earns in those areas from anywhere to 5-25%. So, as an instructor at both Georgia State (and I also taught at Benjamin Cardoza Law School), I wanted to be able to share this information not only with my clients, but with others in the industry to help empower them with the tools and the knowledge that they and their representatives need to adequately level this playing field.
Sam: Well, I will share with you that in my studies at Full Sail University we were educated about the 360 deal using one of your videos on the topic on Youtube. I was grateful for that information.
Minter: Thank you and I would like to thank Artist’s House for having the foresight to come in and do the interviews for that topic and several others covered in that project. Portions of that video actually appear on YouTube and are actually the number one video on the 360-deal topic.
Sam: Congratulations on that.
Minter: Thanks, Sam. I appreciate that.
Sam: You’re welcome, my brother. In reference to how this is infused into the industry now, are you more supportive of such a deal or not?
Minter: Well, that is a tricky question. The reason is because I represent a lot of artists but I also represent producers, independent record companies and labels so depending upon the needs of my clients, I wear hats on both sides of the ring. The book is not written to bash labels for using this deal. The book is intended to educate and empower both artists and industry about the intricacies of the deal although it is artist oriented and artist favored. I provide samples of what the languages and clauses may look like and then to represent the artist who is the least represented and empowered. The book provides tips on how to approach the negotiation process relatable to these changing industry standards for a better chance at arriving at a fair deal.
Sam: Do you believe that there was any alternative approach to the industry shift that labels could have taken?
Minter: Part of the issue is that when Napster, Limewire and other file-to-file peer sharing services came about (sharing music downloads via the internet for free), the labels were blind-sighted. They were scrambling trying to figure out how to get this free music back into the box. At that point, because of piracy and illegal file sharing, labels began to hemorrhage revenues. Over the past fifteen years, record sales have steadily declined each year. As a result, in order to stay viable and responsible to their shareholders, labels would have either had to cut costs, and/or raise revenues. The labels did both. They cut costs by staff reduction, reducing investment amounts, label consolidations and mergers, all that they could on the bottom line. On the top line, there weren’t too many other places that they could go to find the revenue because they weren’t generating new sales. So since consumers were not buying music as they used to, the labels lost money. The 360 deal evolved to recoup that lost revenue. The book also suggests that an artist consider partnering with a label so that when ancillary revenue is earned, they can share in that profit. This causes the artist to bring value to the artist side of the equation sharing in merchandising opportunities, endorsements, sponsorships and tour opportunities, all of the things that an artist relies on when they have a successful brand. This creates a dynamic relationship between artist and label where the artist is less concerned about sharing the pie.
Sam: Do you believe that the 360 deal will become a new standard?
Minter: It’s here. It’s not going anywhere. It may change in the way it looks and be fine-tuned over the years but I expect that the 360 deal is here to stay. The closes analogy I can think of is with the airlines, before 9/11, we had baggage fees. However, when9/11 happened, ridership decreased and the gas prices rose so the airlines imposed new fees to recoup lost revenue. Yet, now that the airlines have rebounded, these new fees are not going away. Why? Because it’s revenue. When you have a consistent source of revenue, it is difficult to eliminate it.
Sam: Is the book available now to the public?
Minter: Yes. The book was released on March 21st. To purchase an autographed copy with a 25% discount, please visit my website at www.askmusiclawyer.com. The website is also a one-stop portal online for a variety of information including a law resource directory, upcoming monthly webinars, live consultations with Attorneys at the firm, and community chats on specific topics. There will also be information on the case involving the case involving the “Blurred Lines” song, the new TIDAL streaming company and more. The book is also available online if you type in my name, Kendall Minter at www.amazon.com.
Sam: Is there any more information that you have regarding the book that you would like to share?
Minter: We will be doing some book signings together with Jill Gibson, daughter of the late Jack the Rapper who has written a book about her dad’s legacy. We will be touring to spread the word about the book on the 360 deal. I believe that knowledge is empowerment and I really believe in the philosophy that if you have a great knowledge, it is one’s responsibility to share it. It’s like money. You can’t take it to the grave with you. I encourage everyone to spread the word then reach back and help someone else.
Sam: Indeed. Thank you, Mr. Minter for your time. It was a pleasure speaking with you.
Minter: You’re welcome, my brother. Be blessed.
Sam: Same to you.
Since the interview it’s learned that, The National Bar Association’s Entertainment & Sports Law Section will present the 2nd “Living Legend Entertainment Attorney Award” (2015) to Kendall Minter, Esq., one of the nation’s leading entertainment and media attorneys at the 90th annual NBA Convention in Los Angeles, California on July 23, 2015.