Label services vs a distribution deal vs a record deal: who owns what, who pays, and the split
A record deal funds you and usually owns the masters. A distribution deal delivers your music for a fee. Label services sit between them. Here is who owns what, who pays and the typical splits.
Want this done for you? See our YouTube music video promotion service. Related reading: Label services explained · How to get signed · How to start a record label. Or browse all music guides.
Key takeaways
- A record deal means the label funds the release and usually owns the masters. Distribution and label services let you keep ownership and pay a fee or commission instead.
- The UK government's IPO report puts typical commissions at about 10% to 20% for distribution and about 30% for a label-services company, against a 25% streaming royalty on a typical record deal.
- A record deal's advance and recording costs are usually recouped from your royalties before you are paid, and the deal can run to several albums.
- Blue Leopard Media sells none of the three. It sells a YouTube campaign and a feature for one release, alongside whichever deal you have.
The short answer
A record deal means the label funds the release and usually owns the masters. A distribution deal puts your music on streaming services for a fee while you keep ownership, and label services add marketing and A&R-style help for a larger commission. The UK government's IPO report puts typical commissions at about 10% to 20% for distribution and about 30% for label services, against a 25% streaming royalty on an exclusive record deal. Blue Leopard Media sells none of these: our music marketing promotes a release alongside whichever you choose.
The deal types side by side
The deal types compared, using the IPO report and the UK competition regulator's (CMA) report:
| Deal | Who owns the masters | Who pays up front | Your share | Term |
|---|---|---|---|---|
| Record deal | Usually the label, sometimes in perpetuity | The label: advance and recording costs, recouped from your royalties | About 25% royalty on streaming | Several albums, at the label's option |
| Label distribution deal | You | Usually nobody: no advance, and costs you ask for are deducted | 80% to 85% of revenue, after a 15% to 20% fee | Short, three to five years |
| Label services deal | You | The provider may pay a smaller advance | About 70%, after a commission of about 30% | Shorter than a record deal |
| DIY distribution | You | You pay a fee | All revenue, less a fixed fee or about 10% commission | No album commitment |
These are typical figures, not a rate card. Real terms vary, and the CMA found that some deals blur the categories. Most questions come down to three: who owns the masters afterwards, whether costs are recouped, and how long you are tied in.
Who does the work
- Record deal: the label runs A&R, marketing and distribution. You deliver the recordings.
- Label services: you run the label side, and the provider supplies distribution plus some A&R and promotion, picked a la carte.
- Label-owned services: a services company owned by a major label charges about 40%, and the IPO report says it is usually open only to established artists.
- Distribution: the distributor delivers your music to the services and collects royalties. Marketing is yours. Spotify says to work with a distributor, and most charge a fee or commission.
On a record deal, the IPO report says royalties are recouped from the advance, recording costs, tour support and half of video costs. Check the term, who holds the masters afterwards and what "recoupable" covers. In the CMA's 2021 data on new major-label multi-track contracts, the label owned the copyright in perpetuity in 26.4%.
The CMA says new artists can use the shorter-term service models to build a track record and negotiate from a stronger position later. It adds that the extra ownership and control can mean the artist takes on more risk.
How the options compare for promoting a release
Promotion is where the deals differ most for a single release. How the options compare:
| Record deal | Label services | Distributor | Blue Leopard Media | |
|---|---|---|---|---|
| What you pay | Recouped costs and a share of revenue | About 30% commission | A fixed fee or about 10% to 20% | From $249 per release, fixed in writing |
| Promotion | In-house marketing team | Marketing and promotion, picked a la carte | Little: you promote it | A YouTube video campaign and a feature with your own cover |
| Guaranteed | No | No | Delivery to the services, not streams | Google Ads views, not streams or playlist adds |
| Best for | Artists with momentum who want funding and a team | Labels and artists who want help and ownership | Cheap, simple release delivery | Paying for reach and press on one release; it does not distribute music |
We do not distribute music, offer label deals or sign artists, so the figures for the other options come from the IPO report and may not match a quote you receive. Have a music lawyer read any contract, and Musicians' Union members in the UK get up to an hour of a specialist solicitor's time free. When your release is ready, contact us.
Frequently asked.
What is the difference between label services and distribution?
Distribution delivers your music to streaming services and collects royalties, for a fee or commission. Label services add marketing, some A&R and other help, for a higher commission. The IPO report puts typical commissions at about 10% to 20% and about 30%.
Who owns the masters in each deal?
On a record deal the label usually does, sometimes in perpetuity. With distribution or label services you normally keep ownership, licensing rights to the provider for the term.
Is a label services deal better than a record deal?
Neither is better for everyone. The CMA says service deals give artists more ownership and control but involve smaller upfront investment and more risk for the artist, and are not a direct substitute for a record deal in many cases.
What does recoup mean?
The label recovers its advance and some costs out of your royalties before you are paid anything. The IPO report lists recording costs, tour support and half of video costs.
Does Blue Leopard Media offer label services?
No. We do not distribute music, offer label deals or sign artists. We sell YouTube campaigns with guaranteed Google Ads views and an editorial feature with a digital cover, from $249 per release.
Keep reading.
Label services: what a label services deal gives an independent label, and what it takes in return
Label services explained for independent labels: what a label services deal includes, what you give up, how it compares with a record deal, and what to ask.
Read the guide MusicHow to get signed today: what labels look for, and a realistic route in
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Read the guidePromote the release, whatever the deal.
A YouTube campaign with guaranteed Google Ads views plus an editorial feature with your own digital cover, from $249 per release, planned around your release date.