They do a lot more than just release music.
Record labels are generally the ones financing the recording, mixing, and mastering a musician’s recordings, and they’ll often provide feedback and suggestions along the way. They’re also the ones handling distribution, promotion, and marketing - from producing music videos to planning album rollouts and tours alongside publicists and management teams.
Record labels will often own the master recording of a work and all associated sound recording rights, but agree to pay the artist(s) a percentage of net sales (royalties). Or if it’s a 360 deal, the label will take a percentage of everything the artist is involved in — books, movies, merch, you name it — not just record sales.
The master recording and composition (the song itself) have separate royalty streams. In order to collect royalties on the composition, you would need a publishing administrator like Songtrust to collect your global publishing royalties, whether or not you have a record deal.
For more details about how Songtrust helps you navigate publishing deals and pay sources, check out our blog post on the Top 10 Reasons You Need Songtrust.
The diagram below breaks down different ways to work with a label and publisher:
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