Advance
Upfront payment from a label or publisher against future royalties, recouped from earnings before the artist receives additional payments.
Definition
An advance is money paid upfront by a record label or publisher against future royalties the artist or songwriter is expected to earn. It's not a gift—it's essentially a loan that must be recouped from royalties before any additional payments are made. Artists don't owe back unrecouped advances, but they don't earn more until recouped.
Advance sizes depend on the artist's track record, expected sales, and competitive interest. Large advances sound impressive but create high recoupment hurdles; smaller advances recoup faster, meaning artists see additional income sooner.
Why It Matters
Understanding advances prevents career-damaging decisions. Artists who spend large advances then fail to recoup may never see additional label income from those recordings. Conversely, modest advances that recoup create ongoing royalty income.
Advances fund recording, living expenses, and career development—but the terms matter more than the number.
Examples in Practice
An artist receives a $500,000 advance but never recoups, receiving no additional royalties from the project despite modest sales.
A savvy artist negotiates a smaller advance with better royalty rates, recouping quickly and earning substantially more over time.
A publishing advance funds a songwriter's living expenses while they develop their catalog, recouping as songs get placed.