In this instructional video, Wendy Day walks through the spectrum of record‑deal structures available to independent artists, ranking them from least to most favorable and highlighting the pitfalls to avoid. She begins with single deals, which involve minimal label investment and little marketing support, explaining why they are generally disadvantageous unless an artist already has strong market traction. She then critiques 360 deals, noting that they take a percentage of all entertainment income (record sales, touring, merch, publishing, sync) and are only worthwhile when the label injects substantial funding and can be renegotiated later. Next, she outlines a standard artist deal, typically offering 12‑18% points on record revenue, and discusses publishing/admin arrangements, emphasizing the importance of retaining ownership. Joint‑venture deals are presented as a middle ground where the artist or an investor contributes capital, allowing flexible revenue splits based on risk sharing. Distribution deals are described as the most artist‑friendly option, with splits ranging from 80/20 to 95/5 in the artist’s favor, but they require the artist to fund their own marketing and promotion. Throughout, Day stresses that leverage—built through a solid fan base, proven streaming and touring revenue, and merch sales—empowers artists to negotiate better terms, keep contract terms short, seek reasonable advances (avoiding front‑loaded debt unless the label is heavily invested), and demand clear marketing commitments. She concludes that the ultimate goal is music‑business success, not merely signing a deal, and advises artists to work with experienced entertainment attorneys to avoid common pitfalls.
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Hey guys, so today we're gonna talk about, um, types of record deals. Um, and shout out to Siddiqi because this one's really for him. So there are many different kinds of record deals that are available in the marketplace, and really you don't get what you deserve, you get what you negotiate. So depending on how much leverage you have meaning how much you can prove to the record label that's trying to sign you that you aren't a risk or that you're less of a risk, the better your deal is going to be. So if you're already making money in the marketplace and you've already got a pretty good-sized fan base in your regional area, you're going to get a far better deal than somebody that doesn't have that. So let's start with the worst type of deal you can get and then talk about— move all the way up to the best type of deal. So the worst type of deal that you can get, in my opinion, is an artist deal where they don't really believe in you. And they're usually termed single deals, but what they're— what they really consist of is, um, a contractual agreement where they don't have to put up a lot of money and they don't have to sign you for a very long time unless they put out your music and it does really well. And they usually don't put a lot into marketing and promotion. You kind of have to do all the work and they just kind of sit back and watch to see how well the marketplace will react to your music. I am not a big fan of single deals. I have— I can count on one hand the number of single deals that I've seen work. I think Black Moon back in the '90s, I think their career started with a single deal. But in today's marketplace, I understand why a label would do a single deal. What I don't understand is why an artist would take a single deal, because basically it's the label saying, I don't believe in you. And the thing about a single deal is a lot of artists think that they can just put out one song, get funding, and bounce, and that's not it at all. You're gonna sign a contract that says if this song does well, the label's gonna sign you to like a 3 to 5 year deal for a very low amount of money, and you're not gonna get very much in the way of leverage in the deal because they don't really believe in you to begin with. They're just saying, okay, we're going to test you in the marketplace. And that's basically what a single deal is. If they don't pick up the option to put you out, yes, you can walk away and go somewhere else. But who wants to sign an artist that's got a failed single in the marketplace? Like, I just don't— I don't see the upside of a single deal. I know you guys kind of get a little bit desperate because you don't have the money to do this properly, so I can understand why you would want to have some type of deal rather than no deal. But if you think it's hard getting a record deal when you've never had one, wait till you see how hard it is to get a record deal when you've had one and you lost it. The second type of record deal, um, that I don't necessarily love is a 360 deal, and that's just an artist deal where you're signing to a label. It's usually of a period of 3 to 7 years. 5 to 7 is, is the standard, is the norm, and you're giving up a percentage of all of your entertainment income. So you're signing a deal with somebody that is going to take, um, a percentage of all of your royalties, a percentage of your show money, a percentage of your ancillary income, like your merch, your publishing. They're going to share in every way that you make money. And back in the early 2000s, um, 360 deals were 50/50 splits except for Show Money, which was 30/70 splits. And the problem with that is you could be signing to a label that's taking a chunk of all of your income, but they're not doing anything to help build your career in those areas like merchandise or touring or getting you into TV and film or getting your music into TV and film or video games or whatever. Um, 360 deals are not necessarily great deals unless somebody is putting up a shit ton of money to help you get to the next level, and then you have the opportunity once you've become successful to renegotiate your deal and get yourself into a better situation. The next level of deal is just an artist deal, and that's where you're signing to a record label. It's usually somewhere between 12 and 18 points, and points is just a slang term for percentage. So it's somewhere between 12 and 18% of your income, and, um, you're probably going to do some sort of a deal on the back end for your merchandise or for your publishing where they're going to want to give you a little bit more of an advance for those two things. I'm not a big fan of publishing deals, which you know because you watched the publishing video, didn't you? So you already know that I prefer admin deals to publishing deals. So you're not giving up ownership, you're just giving up a share of income for the help that whoever you've done that deal with gives you in terms of collecting your money or even getting, getting synchronization opportunities. If somebody can help you get into your music, into film or TV or video games or into commercials, then I could see where you might do some sort of a profit share deal with them. Not an ownership deal. I really think that artists should keep 100% of the ownership of their publishing, but that's just my personal opinion. You've got to do what's best for you. Um, the next best deal that you can get is a joint venture. Of some sort, and that's where you're putting up more than just the music. Maybe you're putting up, um, some of the money, or you've got an investor that's putting up some of the money to help you get to the next level. So it's reducing the risk of the, of the label because there's somebody else there to help bring your, um, brand to market and your music to market. That's a joint venture, and that can be anywhere from a 50/50 split to 60/40, 70/30, and it can go either way. You could get the 30%, the label could get the 70%, maybe you're getting the 70% and the label is getting the 30%. It just really depends on what you're bringing to the table and how much their risk of failure is in moving forward with you. All of this comes down to a business decision for the labels, and it's basically based on risk. What is their risk tolerance? What is their risk in signing you? Is it, you know, are they taking more risk in signing you than somebody that has a bigger buzz and that's making more money than you? It really comes down to what the label believes they can make financially with you as their partner in this. And then the best deal that you can get is, um, a distribution deal. And in a perfect world, that would be a distribution deal that has some sort of marketing and promotions component tied into it. If you're not— if you don't have the money to do it yourself, if you're not with an investor or independent wealthy or have a way to market and promote yourself, it would be awesome if you were to have some sort of a distribution deal that had label services attached so that they would supply or advance the funds to you to go and do whatever it is you need to do to excel. And, um, the best distribution deal that I've seen is a 95/5 split— 95% to you, 5% to the distribution company. They're very, very difficult to get, almost impossible. The average distribution deal is an 80/20 split where you get 80%, they get 20%. But most distribution deals are strictly that, just distribution and they collect the money for you and pay you. And the great thing about that is you're retaining ownership and you're retaining control, so you get to call the shots. Of course, there's not a distributor or a label that's investing in you. You're going to have to bring the investor with you to the table, or you're going to have to invest yourself. And it's really important to understand that you cannot do this without a budget. You can't do this without marketing and promotion. You just really need that. So if you're going to do a distribution deal and you're a do-it-yourself artist and you don't have any way to pay for marketing and promotion, you're not doing yourself a service because you'll get signed to the distributor, they'll do the deal, but nobody's going to stream your music because they're not going to be able to find it, or you're going to stream such a low amount that at some point you're going to lose your distribution deal. It's going become not cost-effective for that distributor to have you on their site and to be accounting to you if you're not making a decent amount of money. So those are the different types of deals that exist. The things that you should look for in a contract are a term that's as short as possible. If you are signing to a label, you would like to have an advance that's as high as possible. And I don't like front-loading deals. That's when you get like a really, really, really big advance because it's just debt. But here's how I've looked at it over the years. If, if somebody is going to put a lot of money into your career and sign you, if they're only putting up $50,000 or $100,000, that's not a lot of money for them to lose. They write those kind of losses off all day, every day. But if they're putting millions of dollars into your career they're going to have a vested interest in your success, and they're going to work a little bit harder to get you to the next level than they would for somebody that they've only given, um, like a budget of $50,000 to $100,000. So in, in a lot of cases, I don't mind front-loading a deal if I know that it's going to bring success to the artist. And bear in mind, just because the budget is there, that does not mean you have to spend it. That does not mean If you get a $3 million deal, that does not mean you have to take all $3 million. You might be relatively intelligent about it and keep your spending low so that the split that you get— let's say you have a $3 million advance and you have an 80/20 split in their favor, so they're getting 80% and you're getting 20%. There's a there's a potential that if you don't spend all of that money, you could then turn around and renegotiate for anything that, um, any income that comes in beyond the 80/20 split that you've worked out, you know, the 80 in their favor, that it might bounce down to a 70/30 or a 60/40 or a 50/50. So there's incentive for you to spend less money, there's incentive for them, and they're rewarded when you're not spending all of the money and you're making more money on the back end. So again, you don't get what's fair in the music industry, you get what you negotiate. So again, keep your term as low as possible. You want to do what's best for you in terms of the other terms in the agreement. In an ideal world, you want them to commit to how much they're going to spend on marketing and promotion, because technically they could just sign you, do absolutely nothing, and if you've got a 7-year deal, you can just sit on the shelf for 7 years. So you've got— just got to be a little bit smart when you're negotiating your deal. Have a really great entertainment attorney by your side, or have somebody helping you negotiate that has done this before and knows where the pitfalls are, because they can help you avoid the pitfalls, and they can help you avoid banging your head because they've already banged their head, so they know where to, um, help you to succeed. So, and the last thing I want to say about the different types of deals is the goal is not to get a record deal. The goal is to have success in the music business, and getting a deal is just one way to achieve success in the music business. But remember that when you're signed— when you— excuse me— when you're signing to somebody else, you're at their mercy. If they're putting up the money and they have the control, they get to decide how to market you and where to market you and when to market you. They have all of the power in this equation. So you want to get as much power as you can in that contract and the way to do that is to have leverage, and the way to get leverage is to build a fan base, build a buzz, build awareness in your own market so that people are already streaming your music, they're already paying you for shows, you're already making money with merch. Not only will you be happier because you have money coming in, but it will give you the opportunity to tell a label no. If you're making half a million dollars a year in the music industry independently and a major label comes to you and says, okay, we'll do a deal with you for $1 million, but we're only going to give you 15 points, you can basically say, hey, that doesn't work for me. I need to have a larger advance, or I need to make more money on the back end. Because why would you ever do a deal like that when you're making 50% or 100% of the money? And I say 50% because there's usually an investor when you've got a budget. But if you're making 50% or 100% of half a million or a million dollars, there's got to be incentive for you to sign to a label and give up a percentage of your ownership and make potentially less money by having them as a partner. So just think it out, guys. Thanks for tuning in. 20/20 vision. Siddiqi, I hope that helped you, and I hope everybody got to benefit from this video. Bye, guys.
