Label services: what a label services deal gives an independent label, and what it takes in return

What are label services?

Label services are the jobs a record label does, sold separately to people who own their own recordings. At minimum that means distribution to Spotify, Apple Music, YouTube and the other stores. On top of that, a label services company may offer some of: release planning, marketing, playlist and editorial pitching, sync licensing, radio promotion, analytics and money for a project. You, the label or the artist, keep the masters and license them to the provider for a set term.

The UK's Competition and Markets Authority set out how this market works in its 2022 music and streaming report. It describes indie labels contracting with providers for label services that cover wholesale distribution plus some A&R and promotion, and notes that the majors sell these services to other labels too: ADA at Warner, Ingrooves at Universal and the Orchard at Sony. It names Believe, PIAS and Empire as artist services providers, alongside AWAL (Sony) and Virgin (Universal).

The services are rarely the hard part to judge. The real questions for a label are what share of revenue, for how long, buys which of them, and whether the part you actually need can be bought on its own for less.

What a label services company offers a label

Providers publish their menus, and they differ more than the shared name suggests. A few examples, from their own pages and the trade press:

• AWAL says in its FAQ that its service suits record labels as much as artists. Its home page lists global release planning, digital strategy, worldwide playlisting, artist marketing, funding, creative support, radio promotion, sync and licensing, and digital and physical distribution.
• Virgin Music Group is Universal's home for these services. Its launch announcement (13 September 2022) describes Virgin Music Label & Artist Services as a network of regional hubs in the main music markets, and lists Ingrooves' offer as marketing strategy, insights and analytics, rights management, advertising, royalty accounting, video monetisation and music licensing.
• Believe appears in the CMA report as an artist services provider. In Music Week's 2020 roundup, its executive Malena Wolfer named keeping ownership of the masters, and releasing on your own terms, as the obvious benefit.
• FUGA, which provides distribution and services to labels, told Music Week in 2023 that the label stays in control of its own strategy: "we are an extension of their team but we do not replace them".

Two things follow. First, what is included varies between providers and between tiers of the same provider, so compare the written schedule of services, release by release, rather than the sales page. Second, your label keeps the A&R and the plan. A label services partner adds hands and reach to a strategy you still have to set.

What a label gives up in a label services deal

Compared with a record deal, a label services deal costs you less in rights. Compared with plain distribution, it costs you more in revenue. What you hand over comes in four forms.

• A share of revenue. The provider keeps a percentage of what it collects. AWAL's FAQ puts its share at 15%, and its how it works page says AWAL Core artists keep 85% of their revenue and can leave whenever they want. AWAL does not publish the share for its funded tiers, which it describes as customised.
• A term. Your masters are licensed for a period, not sold. AWAL's standard distribution deal runs on a 30-day rolling term. MIDiA Research describes the model as an exclusive period, after which the rights return in full to the owner. Ben Marlow of Y Royalties told Music Week in 2023 that the shorter licences let an artist reassess their plans every few years. For any funded deal, the length of the term is something you negotiate.
• Recoupment. Money a provider puts in comes back to it first. AWAL describes the project funding in its AWAL+ tier as funding with recoupment. In the same Music Week report, Marlow pointed out that copyright ownership has traditionally followed whoever funds the recording, so the more a provider pays for, the more it may ask for in return.
• Smaller advances and more risk. MIDiA's Mark Mulligan wrote in 2019 that a label services deal means trade-offs: the provider takes less, so it gives less back, and artists have to weigh smaller advances, higher risk and bearing costs themselves.

Work out what the share costs you before you sign. Put a realistic number of streams for your catalogue into our streaming royalties calculator, take the provider's percentage off, and compare that figure with what the services you would actually use cost to buy separately.

Label services vs a record deal

For the artists on your roster, and for a label weighing up a deal with a bigger company, the difference comes down to who owns the recordings and which way the money is split. The CMA's report describes three broad deal structures. This table summarises them, with the DIY price from DistroKid's pricing page:

Record deals have changed too. Across new major-label contracts with new artists for albums and EPs, the CMA found that the average gross royalty rate rose from 19.7% in 2012 to 23.3% in 2021, as the government's summary also reports, and that the share of contracts in which the label owns the recordings in perpetuity fell from 66% to 26.4%.

A royalty rate is the share paid to the artist. In a label services deal the sum runs the other way: the provider's percentage comes off, and the owner keeps the rest. Neither route is better in general. A record deal buys a bigger cheque and a full team at the cost of the rights; a label services deal keeps the rights and leaves more of the risk and cost with you.

Three ways to run a label's releases, compared

For a small or independent label, the realistic choice is usually between these three set-ups. Percentages are only those the providers publish; everything else is set in your contract.

The third column gets overlooked. If what your label lacks is attention for particular releases, rather than money or infrastructure, you can keep distribution simple and pay for the marketing each release needs, without handing anyone a share of your catalogue's income.

Questions to ask before you sign a label services deal

Ask for the answers in writing, and compare at least two offers side by side.

1. What exactly is the revenue share, and is it worked out on gross receipts or on what is left after costs?
2. Which services does that share pay for, listed release by release, and which cost extra?
3. How long is the licence term, when does it start, and what happens to the catalogue when it ends?
4. Does the deal cover only the releases named, or future releases and your back catalogue as well?
5. If there is an advance or project funding, what is it recouped from, and is it cross-collateralised across releases?
6. Can you leave early, how much notice must you give, and what does leaving cost?
7. Who will actually work on your releases, and how often will they report to you?
8. Which territories are covered, and can you use other partners for marketing, sync or physical sales?
9. How and when are you paid, and do you have the right to audit the statements?

Get a music lawyer to read the contract before you sign. Choose one who reads recording and distribution agreements regularly, not a general solicitor. In the UK, the Musicians' Union Contract Advisory Service gives members up to an hour of a specialist solicitor's time on a music business contract, including recording contracts, at no extra cost. Nothing in this article is legal advice.

Which route fits your label

• You put out a few records a year and have someone who can market them: DIY distribution keeps the revenue with you. Spend on the marketing each release needs.
• You need money for recordings, or a team on the ground in several countries: a label services partner, or a funded tier with one, is built for that. Compare the written offers line by line.
• You need attention for specific releases, not a long-term partner: keep distribution as it is and buy marketing per release, at a price you know before anything starts.
• An artist on your roster is offered a record deal: the CMA figures above show what major deals for new artists have looked like. The artist needs their own lawyer, separate from the label's.

Whichever route you take, the release has to be ready: finished audio, artwork, a video if you want YouTube attention, and press materials. Our free EPK template and music press release template cover the press side. For the wider set-up, see how to start a record label.

Where Blue Leopard Media fits

Blue Leopard Media is not a label services company or a distributor. We take no rights in your recordings and no share of your royalties. We sell music marketing for a release at a fixed price, and it sits alongside whatever distribution or label services deal you already have.

We work with independent artists, managers and labels. For each release, we run the music video as a Google Ads campaign on YouTube: skippable ads before other videos and in search and the home feed, aimed at people who watch similar artists. Each campaign includes an editorial feature about the artist, written by our editorial team with their name in the headline and their own digital cover, published on one of the publications we work with. You approve every word, and it goes live within 24 hours of your approval of the final draft. It is sponsored content and labelled as such, as our disclaimer explains.

• Price: a worldwide YouTube campaign plus one editorial feature from $249 per campaign, for any artist on your roster. Targeting specific countries or cities is priced separately. For a label campaign across several releases, you get a written plan with the scope and the fee before anything starts.
• Reporting: a Google Ads report every week with views, cost and watch time.
• No rights and no revenue share: the scope and the fee are set in writing, and nothing starts and nothing is spent until you approve it.
• If Google won't approve a video: we tell you why and what edit would fix it. If it still isn't approved, our refund policy gives a full refund of the package.
• Not included or guaranteed: distribution, funding, streams, playlist placements, chart positions or any view count. Nobody honest can promise those.

To talk through your next release, book a free 15-minute call. There is no obligation to buy anything. You can estimate a YouTube budget first with our YouTube promotion cost calculator.