A record deal where the label takes a percentage of all the artist's income – touring, merch, endorsements, publishing – not just recordings. The non-record cut is commonly 10–25%. It's now standard for major-label signings, and it means the label shares in income it may not have built.

What's the difference between a distribution deal and a record deal?

In a distribution deal the artist keeps their masters and the distributor takes a smaller cut (often around 10–30%) to get the music into stores and streaming, usually with little or no advance. In a traditional record deal the label owns the masters and provides a bigger advance and more support, in exchange for a much larger share.

Do you keep your masters in a licensing deal?

Yes. In a licensing deal you license the masters to a label for a set term – often a few years – and the rights revert to you when it ends. It's different from a traditional deal, where masters are usually assigned for the life of copyright.

Record deals: 360, distribution, licensing and JV

There are five common record deal shapes, and the cleanest way to tell them apart is who ends up owning the masters: the label (traditional and 360), the artist (distribution and licensing), or shared (joint venture). Each trades ownership and money for support and risk differently.

Traditional (exclusive) deal

The classic label deal. The artist assigns the masters to the label – often for the life of copyright – in exchange for an advance, recording costs, marketing and distribution. The artist’s royalty is a slice of revenue (commonly cited in the 15–20% range, though real contracts often start lower and escalate with success), and it only pays out after the advance is recouped. Biggest upfront money and the most support, but the artist gives up ownership and earns the smallest share.

360 deal

A traditional deal that reaches further. On top of the recordings, the label takes a percentage of all the artist’s income – touring, merch, endorsements, publishing, appearances – usually in the 10–25% range for those non-record streams. The argument is that the label builds the brand that drives ticket and merch sales, so it wants a share. It’s now standard for major-label signings. The catch: the label takes a cut of touring, often the artist’s biggest income, and one it may have had little to do with.

Distribution deal

Here the artist keeps the masters. A distributor gets the music into stores and streaming and takes a smaller cut – often around 10–30%, and on DIY platforms much less – with little or no advance. “Distribution plus services” deals add marketing and playlist pitching for a fee or commission. The artist keeps ownership and a far larger share, but carries the costs and gets less label muscle behind the release.

Licensing deal

A middle path. The artist licenses finished masters to a label for a set term – often a few years – and the rights revert to the artist when it ends. The artist keeps the long-term asset and gets it back, but a licensing deal usually comes with a smaller advance and less investment than an outright assignment, because the label doesn’t own the masters and carries more risk.

Joint venture (profit split)

The label and artist share both the costs and the profits – commonly around 50/50 of net profit, often with shared master ownership. Because costs come out of all the income before the split, the artist can start earning as soon as the project is profitable, which can pay more than a traditional royalty. The thing to watch is what counts as a recoupable “cost” – a 50/50 deal stops being even if the label loads expenses against it. If the artist insists on keeping the masters, expect a smaller cut.

How to read any of them

Every number here is negotiated and swings on leverage, so don’t treat the ranges as fixed. Compare deals on ownership first, then on what gets recouped before the artist is paid, then the split. And whatever the shape, get a music lawyer to review it – this is general education, not legal advice. The terms worth fighting over are in contract red flags.

Common questions

What is a 360 deal?: A record deal where the label takes a percentage of all the artist's income – touring, merch, endorsements, publishing – not just recordings. The non-record cut is commonly 10–25%. It's now standard for major-label signings, and it means the label shares in income it may not have built.
What's the difference between a distribution deal and a record deal?: In a distribution deal the artist keeps their masters and the distributor takes a smaller cut (often around 10–30%) to get the music into stores and streaming, usually with little or no advance. In a traditional record deal the label owns the masters and provides a bigger advance and more support, in exchange for a much larger share.
Do you keep your masters in a licensing deal?: Yes. In a licensing deal you license the masters to a label for a set term – often a few years – and the rights revert to you when it ends. It's different from a traditional deal, where masters are usually assigned for the life of copyright.