Record deal types compared: label, licence, distribution, 360

All recording deals answer the same two questions: who owns or controls the masters, and how is the money split. The industry has evolved a spectrum of standard answers, and knowing where an offer sits on that spectrum tells you most of what it will do to a client's income before you read a single clause.

This guide walks the spectrum from most label-controlled to most artist-controlled, and ends with the clauses that decide whether any of them is fair.

The traditional label deal, and its exclusive licence cousin

In a traditional artist deal the label funds everything, owns the masters (historically in perpetuity, increasingly for a long defined term), and pays the artist a royalty on receipts after recoupment. It buys the most funding and muscle, and costs the most ownership.

An exclusive licence deal softens one axis: the artist keeps ownership and grants the label exclusive rights for a term, after which rights revert. Shares are otherwise similar. Reversion is the point: a licence deal client has a catalogue coming back to them; an assignment client may not.

Distribution, label services and profit shares

At the other end, a distribution deal provides delivery to the services and takes a fee, funding little or nothing; the artist keeps the masters and the majority of receipts, and carries every cost. Label services sits between: the artist keeps ownership and buys marketing, promotion and project management as a service, often with some funding, for a bigger share than a distributor takes.

Profit-share and joint-venture deals replace the royalty with a split of defined net profits, commonly around half each after agreed costs. They align incentives, and they make the cost definitions the entire deal: every pound the label recovers as a "cost" comes off the pool before the artist's half is computed.

The 360 layer

A 360 deal isn't a separate structure but a layer any of the above can carry: the label takes a share of income beyond recordings, commonly live, merch, brand and sometimes publishing. The label's argument is that its marketing lifts the whole career; the artist's counter is that the label does no work in those lanes.

Where a 360 clause survives negotiation, the usual containment is to cut the percentages, restrict the categories, net the shares of the costs those lanes actually carry, and sunset the participation after the term. An uncapped gross 360 share over lanes the label does not work is the single most expensive sentence a developing artist can sign.

The clauses that decide fairness, whatever the structure

Structure sets the frame; a handful of clauses set the outcome. Check them in every variant.

Ownership and reversion: assignment or licence, for how long, and what triggers rights coming back.
The royalty base: which receipts count, and which deductions survive before the percentage applies.
Recoupable costs: what lands on the artist account, including tour support and video.
Cross-collateralisation: which projects and income lanes can see each other.
Options and escalators: how many further albums the label controls, and whether the rate rises on later ones or on recoupment.
Commitment: what the label must actually spend or do, and what happens if it shelves the record.

Figures referred to

Indicative share ranges by structureIllustrative: Artist share of receipts runs from roughly 15–25% on traditional deals, around half on profit shares, to 70–90% under distribution-only dealsRanges reported by music lawyers and trade press · as of 2025

Figures marked Illustrative show the shape of the market, not a quoted rate. The lessons keep the maintained, sourced numbers.

Common questions

What is the difference between a record deal and a distribution deal?

A record deal trades ownership or control of the masters for funding: the label pays for recording and marketing and keeps most of the income until costs recoup. A distribution deal funds nothing and takes a fee (leaving the artist most of the income and all of the costs) while the artist keeps the masters.

What is a 360 deal?

A clause layer giving the label a share of income beyond recordings: live, merch, brand deals, sometimes publishing. Labels justify it as sharing the career their marketing builds; negotiation usually cuts the percentages, restricts the categories and ends participation after the term.

What is a label services deal?

The artist keeps ownership of the masters and buys the label functions (marketing, promotion, project management, sometimes funding) as a service for a share of receipts. It sits between distribution and a traditional deal, and it has become the standard route for established artists who can fund recording themselves.

Learn this properly

The interactive lessons on this topic, with sourced figures and live simulators: