What's better? A Distribution Deal or a Label Deal?

What's better? A Distribution Deal or a Label Deal?

I recently found this cool podcast called “Why Top Artists Stick with Major Record Labels” which was posted July 16th, 2024 (linked below)

What is a Traditional Label Deal?

Music distribution has changed very much throughout the decades. The first record label created was Columbia, which is still around today. A traditional record label is where an artist is signed to if they have potential that the label likes. The label owns the artists recordings and pays the article an advance and royalties. As well as that, artists are given recoupable expenses (which I will bring up later).

Now, there is so much more competition than before in the music entertainment industry, from artists to labels. In the beginning there were fewer labels to choose from, and there was no self-distribution such as on DistroKid. Now, an artist can choose from hundreds of different labels, or even choose a distributor.

DistroKid

Some services a traditional label deal can offer that a distribution deal can not are radio promotion, digital marketing, publicity, and playlist pitching (3:24). As well as that, they can front money for different expenses the artist needs, such as marketing or recording (16:50), where the artist may or may not need to recoup. This is known as a recoupable expense, where the label acts as if it were a bank for the artist, and they pay back over time with their profit from their songs and albums. In general, a label helps to build up the roster for an artist and get them more noticed by the public (19:18) because the major labels really can make them into a star.

What is a Distribution Deal?

As time went on, more labels were formed, and new ways of distributing music was created, such as using aggregators like DistroKid which are known as distribution deals. A distribution deal is where an artist signs with a distributor, such as DistroKid, in exchange for label services or an advance. Unlike in a traditional label deal, an artist owns their recordings. There are different tiers of distribution, such as distribution from an aggregator like DistroKid to a more well known distributor like Symphonic.

At 3:06 in the podcast, it is stated that in a distribution deal you are licensing your music for a set term to the distributor that will then have the responsibility to distribute your music to all DSP's, which stands for Digital Service Provider. 

Why do Artists Stay with a Label Even if they are Big?

In most cases, in order to keep a star, labels will offer a licensing agreement after that artist's contract is over. They will try to rework the terms of the original deal and give the artist a better one in order to keep them with the label, such as a better royalty split (9:20). As well as that, if an artist is already used to having a label do everything for them, they won’t want to go back to the start and do it all themselves. An example of this is Kendrik Lamar who he and his team have worked with Interscope and UMG for the last 15 years. And one of the key reasons is how they understand his backstory and catalog. As well as that, they know how to work and communicate with him. They built a relationship and trust, throughout the years, and there would be no reason to destroy that if it works for everyone.

Nowadays, most artists think that in order to be big or successful, they have to be signed to a major label, but that's not the case. There are so many new ways to get music out there, such as a distribution deal as stated previously or a minor label. And now, getting your music out there is as easy as snapping your fingers. All you really have to do is find some sort of aggregator like DistroKid, as stated before, and upload your songs. And this is cheap, quick, and easy. So now, lots of artists, especially the small ones, are starting to go more towards self-distribution than a label.

My Personal Opinion

Personally, unless I was offered an amazing deal, I would not sign with a label. I would prefer to own my recordings and be free to be fully myself without limits. There are perks to each deal though, such as owning the recording for distribution, and promotion and the ability to offer recoupable expenses for labels. I think the only way I would take a label deal is if in the contract it stated after it ended, I would get full ownership of my recordings, but that is not bound to happen.


Isabella Basile is a Popular Music Major Student at William Paterson University. She is currently in her second year! She is looking forward to expanding her knowledge of the music industry and becoming a better musician herself!

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