As the music industry evolves, so too do the career options for , whether it be signing to a or , signing a , or releasing via an .
But what are the different types of record label deals available to artists?
Today, a record label can take many forms and would be individually negotiated and agreed upon based on a number of factors, including the level of support and investment required by the artist.
Record Label Deal
A deal with a record label can be a long-term arrangement, for example, multiple albums, which most often comes with an as well as an agreement to cover costs for recording, marketing, promotion, and distribution. The record label takes ownership of the sound recordings and agrees to a percentage with the artists across multiple income streams. Some of the costs for recording, marketing, press, and distribution might be depending on the agreement.
Single Deal
A single deal is similar in structure to a record label deal, but it is a short-term agreement, usually based on one single sound recording with the option for the record label and artist to negotiate an extension to the deal at the end of the term.
360 Degree Deal
There are many variants of this type of deal. It can be a long-term arrangement like the , which most often comes with an advance and an agreement to cover costs for recording, touring, marketing, press, and distribution in return for ownership of the sound recordings and an agreed royalty split.
In this type of deal, the record label would share a percentage of revenue generated from additional activity that the label will help arrange and support, such as merchandising, endorsements, sponsorships and live performances.
If the artist is also a songwriter of the musical work, a 360-degree deal may include all or some of the publishing rights in the musical work being given to the record label. The label may serve as the publisher in that regard, or they may engage a music publisher to administer the rights on its behalf through a publishing administration agreement.
Distribution Deal
This deal is an agreement where a record label agrees to the sound recordings of a or an independent record label for a percentage split of the distribution or streaming royalties.
The label delivers sound recordings to and physical retailers and handles relationships with the DSPs on the artist's behalf, including pitching for . However, marketing and promotion fall on the self-releasing artist or the record label they signed with.
License Deal
This deal is an agreement with a record label granting them the right to market, promote, and distribute sound recordings in return for a recoupable fee and royalty. The license term, or length, is negotiable.
The self-releasing artist or an independent record label will need to deliver finished sound recordings at their own expense, but they retain 100 percent ownership. In this deal structure, the label will also invest in marketing and promotion.
Image credit: Jakob Johansson, Parapix