Reflect Audio

Worldwide, most label contracts include a specific rule. They don’t actually allow their artists to be signed to multiple labels at once. However, there are ways to circumvent this. Through either loopholes in those contracts or by gaining permission from the labels, on rare occasions artists may be able to release certain records (sometimes limited to “non-albums”, ie. EPs, singles, mixtapes, etc.) on other record labels. Always keep this in mind when you sign a contract with a record label.

In the music industry, a 360 deal (from 360° deal) is a business relationship between an artist and a music industry company. The music industry company will actively try to develop new opportunities for the artist. They will function as a pseudo-manager. In return, according to the 360 deal, the artist agrees to give the company a percentage of an increased number of their revenue streams. In a 360 deal this often includes a percentage of sales of recorded music worldwide, live performances, royalties, publishing and more. Costs for packaging, budget records and other costs might be deducted from the artist’s royalties as well.

When an artist signs a deal with a label, they should see themselves as an investment of the record label. Artists don’t get paid if they are with a record label. The record label lends them money that is to be paid back if/when the artist makes it. Suppose that a music label gives a band a $250,000 advance to record an album. The label agrees to do so in return for 90% of the sales. This percentage can vary from label to label and from artist to artist.

In most cases, when signing with a “major” record label, the label will offer the artist a large cash advance. This can be used for anything and everything in the artist’s music career. Keep in mind though, that every dime the record label invests in the artist, they expect to get back. If the music label never recoups what they’ve invested in the artist, the artist will never see any of the royalties that their music generated. All of that advanced money must first be paid back to the record label.

There are thousands of record labels in the world, but only a few of them define the music market. Their major function is to take care of the copyright of sound and video recordings. These days there are four ruling record labels. Nielsen SoundScan in their 2011 report noted that the “big 4” controlled almost 88% of the market:

• Universal Music Group (USA based) — 29.85%
• Sony Music Entertainment (USA based) — 29.29%
• Warner Music Group (USA based) — 19.13%
• Independent labels — 12.11%

EMI used to be one of the big record labels, but got surpassed by Universal Music in 2012. Some other major record labels are Island Records, BMG and Virgin Records.

The days, record labels can have an elaborate list of duties. The details my vary per music label. In most cases, record labels work directly with artists and producers to coordinate the writing and production of the recordings. After this, the coordination of the manufacturing follows and subsequently the distribution, marketing, promotion of the recording. All this is done to ensure the recording sells well around the world.