By acquiring majority stakes in MTS, a management firm, and Bucardo, a booking agency, Sony BMG Germany has positioned itself for 360-degree contracts, broad artist deals that cover recorded music and services such as management and booking. The majors have traditionally been involved in recorded music and publishing. Broader contracts require additional services. Acquisitions are the best and fastest way for the majors to attain those services.

Universal Music Group has acquired Sanctuary Group, which has recorded music in addition to management, merchandise and publishing. Warner Music Group has a joint venture with artist management firm Violator. EMI has not moved toward similar 360 deals, though the company has does have a variation of a 360 deal. Its revenue sharing deals, with Korn and Robbie Williams, gives EMI a portion of revenues in exchange for an initial lump sum investment. The Korn deal gave the band $15 million up front in return for 25% of the band's publishing, merchandise and touring revenues, plus profits from the band's albums. EMI's model works better for superstar deals (due to lower risk) but Sony BMG, WMG and Universal are better positioned to offer broader deals to developing and middle-tier artists.

Additional reading:

• The Economist's July 2007 article on 360 deals. "Instead of settling for a cut of CD sales, they increasingly offer artists broader contracts that encompass live music, merchandise and endorsement deals. Such deals, also known as multiple-rights or all-rights contracts, are particularly important in regions with rampant CD piracy, such as Africa, Asia and Latin America."
• Billboard's article that broke down the economics of Korn's revenue sharing deal with EMI. "If its next album repeats the sales of the last (2 million units worldwide), and the band posts numbers on the road similar to 2006 (50 dates grossing around $11 million), it should come close to break-even by the end of this new album cycle. That's before any additional nontouring/non-CD revenue is factored in."