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Record Deal vs. Distribution Deal: Which One Is Better?

When it comes to music distribution, record deals, and the music industry, people often get confused about what it means to land a deal in the modern age. These days, record deals take many forms due to the uprise in streaming platforms and digital media sales. When artists try to break out into the industry, there’s much more to it nowadays than recording an album and playing shows. It takes arduous work promoting and marketing the artist themselves as the product. Record labels still play a vital role in making artists successful, but it looks pretty different than it did in the 1990s. 

Until file sharing and streaming became commonplace, record labels wound foot the bill for just about every expenditure on making music. They would pay for recording, production, and promotion and dole out big sign-on bonuses for artists. Today, the landscape is much different. What labels once did themselves entirely are now spread into different facets of the industry. Music distribution and recording happen largely independently from labels, with some exceptions. Let’s look at some pros and cons of record deals and distribution deals to spread some light on how the industry operates today. 

Pros of Record Deals 

Traditional record deals are rare these days. It used to be that bands would sign on with labels to cover the cost of recording, distributing, promoting, and touring an album. These were the days when labels had cash on hand to justify taking risks with artists who may or may not be successful. 

As we said, these deals are rare today, but they do still exist. And the pros of landing one are many. A label will cover most costs, including recording, artwork, promotion, and music distribution. Plus, labels can be beneficial in building a following and booking tours to increase exposure. 

Pros of Distribution Deals 

Distribution deals essentially deal with only the distribution part of the process. That means the rest of the tasks are up to the artist to deal with. Distribution deals favor artists because it puts them in the driver’s seat. Artists with distribution-only deals retain the rights to their masters and have stronger negotiating power when working with third-party middlemen such as smaller labels or a PR firm. 

And these days, most music distribution occurs over digital platforms and through digital distributors. That means artists can directly engage with their distribution service without a middleman. 

Cons of Record Deals 

Record deals are notoriously spun in favor of the label. While they may look attractive for bands to get a big sign-on bonus and have production costs paid for, the back end of these deals is usually not so great for artists. Typically, record labels own all the rights to the band or artists’ recorded material for the duration of the contract. And with the dawn of streaming, these deals became even worse. 

Because streaming caused the value of songs and albums to drop, labels lost money, and the 360 deal was born. These deals collect any money an artist might make from touring to merchandise. 

Cons of Distribution Deals 

Distribution deals also have their drawbacks. With distribution only, getting the buzz going around your release that you need to build an audience and fanbase can be hard. Plus, if you want to embark on physical media releases, you’ll need a middleman. Music distribution deals don’t include the cost of recording, promotion, and marketing, so the artist will also be on the hook for dealing with that part. 


While it offers more control and ownership of music, distribution deals create much more work for the artist in the long run. It can be worth it, but it helps to have the representation of a label, large or small, to push an artist’s career forward and increase their chances for success. 


For artists wondering which deals they should be seeking out, it really comes down to what they ultimately need in their careers. The reality is that today, musicians can find studio time for relatively inexpensive rates and in some cases, record in their own homes. Many of our favorite albums of the modern age have been produced this way and it’s becoming more and more commonplace for artists to take on the recording part of the process themselves. At least early in their careers 


At the same time, producing albums costs money and time. Even if they’re recorded in someone’s apartment. Musicians need to be paid, and promotional materials like photos, videos, and album art are essential details that can rack up a big bill quickly. Labels, even small ones, are still a vital part of the industry. 


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