The evolution of music distribution within my lifetime has been nothing short of revolutionary.
Initially, record labels paid artists a small fee for complete ownership of their music rights, including name and likeness. This fee was modest compared to the profits labels made from various revenue streams, like sales, publishing, and even physical sales of piano rolls and printed musical scores.
With the arrival of the phonograph and radio, major labels took a more aggressive stance, charging artists back for their operating costs—such as radio promotion, marketing, and manufacturing—while still taking the lion’s share of the profits. Most deals allowed artists only a 4%–6% cut, after chargebacks, with the labels recouping expenses from that small percentage. Many artists were left owing the label money even years after being dropped.
Then came the 360 deal, where labels took a percentage of nearly every revenue stream connected to an artist’s career, from publishing and live shows to endorsements, films, and more. Virtually everything the artist earned became subject to the label’s authorization and revenue sharing.
Today, the major labels have largely pivoted away from directly managing artists, instead adopting a distribution model where artists cover their own marketing and promotion expenses, while the labels charge fees for access to their distribution networks. Labels still offer advances, but these are essentially loans that artists must repay with interest.
Breaking this cycle requires independence: building your own company, leveraging independent distribution, and avoiding advance payments.
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