Part 4/12:
Back in the early 2000s, record budgets were hefty, with new bands often allocated anywhere from $150,000 to over $2 million to produce their debut albums. Labels would bid for promising acts, offering sums for equipment, tour support, and the guarantee of future records.
Today, the model has shifted dramatically. Signed artists are seldom emerging from fresh bids; instead, record labels now primarily sign already successful acts, acting as amplifiers rather than discoverers. The prevalent model is the 360 deal, where labels take cuts from various income sources—touring, merchandise, publishing, and record royalties—rather than just album sales. This comprehensive approach stems from dwindling revenues from physical and digital sales that no longer sustain the traditional royalty base.