Types of record deals ( Top 11 Record Label Deals )

If you are a singer and you wish to make a career for yourself out of it then you should know what your options are when it comes to record deals. Most singers are extremely happy when they get pitched a record deal, but the truth is that record deals are two-edged swords and the record company doesn’t have the best intentions when it comes to your career. Record labels are out to make a profit, while they make big money from successful singers, but they also can make a nice profit from new and upcoming singers.

There are a lot of different types of record deals, the vast majority of them favor the record labels rather than the artists. Some record deals like the 360 or Multi Rights Deal will take a cut from everything, touring, performing at live events, merch, ad revenue, and so on. Some record labels do offer anti 360 deals although they are fairly rare. You have to be extremely careful what kind of a record deal you sign, in the worst-case scenario, you might end up bankrupt and owning a lot of money to the record label so hire a lawyer to read the record deal before signing it.

If you are singing at live events then sooner or later you will be approached by a record label, but you will have to take everything with a grain of salt. On the bright side, this will give you an opportunity to make it big, on the other hand, a bad record deal could ruin your singing career forever, or even worse you will get pennies for your work and the record label owns you. Most of the record deals of successful singers are fairly unknown and it is fairly normal for negotiations between lawyers and managers to drag on for months.

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This is because both parties want to make the record deal in their favor, so it will take some time to come to an agreement when both parties know their jobs. On the other hand singers with no managers are an easy target for record labels, oftentimes singers will jump into the first record deal which promises them some money, thinking that they are set for at least a couple of years, well at least the record label is.

My personal advice to you is to get a lawyer who has experience in the music industry and let them read the contract before you sign it. Most of these record deals are 30+ pages long, and they are filled with jargon which only a lawyer would understand, basically, it is the same thing as when you accept the Terms and Conditions when you download an app, the difference is that a bad contract will hurt you in the long run. You can always invest in your own music without the complications of a record label, for more information check out my recent article How to invest in your own music? ( Top 10 Investments ).

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Standard record deal

Standard record deals used to be the norm when record labels were pushing physical products like tapes, CD’s and albums. Nowadays SRD’s are fairly limited as with the age of technology we have moved on. However if you are a beginner singer you might still get approached with and an SRD, especially if you are singing at festivals, as oftentimes you could buy music directly at the festivals, although mainly CD’s.

What is good about SRD’s is that you can keep all the money that is not mentioned in the contract, although most contracts will be so tight that you never be able to make some extra revenue. SRD’s are great for beginner singers as they will not interfere with your brand, as some of the other contracts will do, like even changing the music genre. On the other hand, you can not expect a lot from the record company if you have an SRD with them, and most of the time your progress will be limited as the company will push singers who have a better contract which favors not the artists but the company.

360 or Multi Rights Deal

This record deal is one of the most popular ones, if you get discovered on social media or on some other online platforms you will probably be pitched a 360 deal. The 360 deal means that the record label will take a percentage of any and every revenue stream you as a singer will have, and even if you make the new revenue stream before or after the contract. This is a fairly broad contract which mainly implies that no matter what kind of revenue you make with your singing you will still give the record label their cut.

Record labels know that a new platform can suddenly become very popular and they wouldn’t want to miss the opportunity to make money off you. The reasoning why they take a cut from everything is that they made you famous and the money which you make is directly correlated to your brand which they helped to build. The good thing about a 360 deal is that it is mostly hands-off for you as you will only have to focus on singing, all other aspects like touring, promoting and merch will be handled by the record label.

With a 360 deal, you will have the chance to work with some of the best producers in the industry. On the other hand, your hands will be tied with a 360 deal, you will not be able to do anything without their permission, if you have gathered a following on social media or other platforms before you made the deal, the record label will still get a cut from that revenue stream.  A 360 deal will take their cut from YouTube revenue, if you want to know how to make money as a singer on YouTube then check out my recent article How do singers make money from YouTube? ( In 9 Easy Ways ).

Anti 360 Deals

Some record labels do offer Anti 360 Deals which basically means that you will keep the money that you generate from multiple income streams and which is not listed in the record deal. This is a great deal for singers as they can keep the vast majority of the money and the record label can focus on what is actually their job which is promoting the singer and not to nickel and dime every platform.

The problem with this deal is that it is very hard to get, most record labels want to have a finger in every pie, so even if they will offer an Anti 360 Deals odds are that they will claim some other aspects with higher percentages.

EP deals

An EP deal is a short term contract, basically, the recording label will help you out for a couple of months. Most of the time EP deals mean that you can not disclose that you are associated with the record label, this way if you tank as a singer, the reputation of the record label will not be affected. On the other hand, if you become successful the record label will publicly acknowledge you and probably offer you some other contract.

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The cons of an EP deal is that you will not get a lot of help from the record label, basically, you will have to do everything on your own without any help, just like you did before you had a contract but this time the record label will take a cut from your revenue.

Single record deal

The single record deal is a fairly simple contract focusing on just one song, although sometimes it revolves around an album but this happens fairly rarely. Most of the time when record labels pitch a single record deal is because they do not have enough faith in the singer yet, so they give a chance to the singer for making one song. Depending on how this song performs you will probably get offered a new deal, most likely a 360 one. You might think that singers with one successful song can make a lot of money, the truth is a little bit more complicated, for more information check out my recent article How much do singers make per song? ( The Honest Truth ).

Artist deal

The Artist deal is basically a 360 deal, meaning that they will take a percentage of any and all of your earnings as a singer. The major difference is that with artist deals you do not actually sign up with a record label, rather than with something that resembles a PR company. Basically, you will have the right to sing other artist’s songs and you will have access to their fanbase, which might or might not catapult you to celebrity status overnight.

The problem with artist deals is that there are a lot of middlemen in the process, like managers and producers, which will all take a cut from you, although you can still make a good amount of money if you get successful. In addition to this, you will have to pay a percentage of your earnings both to the artists and your record label. On the other hand, if you have a favorite singer, then with an artist deal you might even have the chance to be mentored by them.

Profit Split

A profit split deal is a fairly short team deal that mainly focuses on releasing a song or an album. Although for a profit split to be taken into consideration you will have to have a product, like a song or an album which you have funded yourself already. Once the deal is made the record label will only have to focus on the marketing part, which is pennies for them as they won’t sink millions of dollars into a new singer.

If the song or album takes off and makes a profit then the singer and the record label will split the profits. If the song or album tanks, then the record label didn’t lose any money, but you probably lost your life savings. The main thing to keep in mind with a profit split deal is that you will have to approach the record labels and not the other way around.

Exclusive Record or Major deal contract

The exclusive record means that the record label will invest in you as a singer, by investing I mean they will pay for everything. Most exclusive contracts are for established artists, and if you are a new singer then you probably will not be approached with such a contract. The main advantage of an exclusive record deal is that you dot have to pay for almost anything and as long as you make a profit you are set.

The problem comes when you do not make a profit and you suddenly find yourself having to pay back the record label all the money they have invested in you which probably will ruin your life. Although not all exclusive record deals have this in the contract but it is fairly normal to find a clause in this contract that makes you pay for the money they have invested in you if you didn’t make a set amount of profit.

Distribution Deals

Distribution deals are more commonly made between record labels, smaller record labels sign a P&D and the larger labels will make accessing the artist’s music a lot easier. This includes pitching albums to stores and online retailers. All other aspects are supported by the smaller record label, for you as a singer this means that you will have to pay a lot more as the smaller record labels will also make a profit from the P&D.

The problem with this kind of deal is that you will have to pay around 20-30% commission due to the distribution deal and around 15-25% to the small label, basically, most of the money will be theirs. A lot of small record labels went bankrupt due to these deals, as P&D deals are only viable if you make a good amount of profit, which in the case of a new singer will not always be the case.

Licensing deal

The licensing deal means that you will get paid upfront and you will also keep the rights to your songs. You as a singer will only have to keep singing and the record label will be in charge of promoting you. This is a great deal for beginner singers as you will get almost all of the money which you make, although not a lot of record labels will offer a licensing deal to a new singer. There is a lot of pressure on singers who take such a deal, as the record label would want to recuperate all the invested money as fast as possible.

While you are making the record label a profit then everything is good and you will probably be pitched a new deal, on the other hand, if you fail to make them a profit then they will probably not renew the deal, or pitch you a deal which makes them the most amount of money in the shortest amount of time.

Independent label contract

The independent label contract can be fairly difficult to describe as these contracts will be wildly different from one artist to another. Sometimes you might keep a higher percentage of money and even the rights to your music, while in some cases you will be working for pennies. Although the name would imply that it would give more independence to the artists, but this is not always the case, so read the contract carefully and hire a lawyer to interpret what they are actually saying in the contract.

In conclusion

As you can see there are a lot of record deals, although these deals are not set in stone as most of them will be a combination of several deals and will be different for all artists. My personal recommendation is to always hire a lawyer before signing a deal, the jargon in these deals is fairly complex and only lawyers will understand. At first glance, a deal might look good, but they might have one or two clauses in them buried amongst the pages which might get you bankrupt.