Record Deal
A contractual agreement between an artist and record label defining terms for recording, releasing, and profiting from music.
Definition
A record deal outlines the relationship between artist and label—who pays for what, who owns what, and how money is split. Deal types range from traditional contracts (label funds everything, owns masters, pays artist royalties) to licensing deals (artist delivers finished masters, retains ownership, licenses to label).
Deal terms have evolved significantly as the industry shifted to streaming. Understanding different structures—advances, royalty rates, ownership, term lengths, options—is essential for artists evaluating opportunities.
Why It Matters
Record deals determine an artist's financial future for years or decades. The right deal provides resources and opportunities for career growth; the wrong deal can trap artists in unfavorable terms with diminishing returns.
Understanding deal mechanics also helps artists negotiate better terms or decide if independent release makes more sense for their situation.
Examples in Practice
An artist negotiates a profit-share deal instead of a traditional royalty deal, resulting in significantly higher earnings once their release recoups.
A band's lawyer identifies concerning option clauses that would have locked them into multiple albums at initial low royalty rates—negotiating these terms saves future earnings.
An independent artist compares a label offer to their current direct-to-fan earnings and realizes they'd make less money signed, declining to maintain independence.