A good record deal percentage depends on what that “percentage” measures, what the label pays for, and how the contract calculates royalties after recoupment. In the USA, when artists ask what is a good record deal percentage, they usually mean one of four numbers: the artist royalty rate on the master, a net profit split, a distribution fee, or the label's share of expanded rights in a 360 deal.
What Does “Percentage” Mean in a Record Deal Contract?
Before you decide what is a good record deal percentage, you need the contract's definition of the base. Many disputes start here, not at the headline number. Traditional record deals often quote an artist's royalty rate as a percentage of a wholesale-style base, often described as PPD (published price to dealer) or its modern equivalents.
A different deal may promise a 50/50 net profit split, but “net” can include a long list of costs that drain the pool before the split. A distribution deal may look like “you keep ownership, we take X%,” which is not a royalty rate at all; it is a service fee on revenue.
So when someone asks what is a good record deal percentage, the only honest response starts with: “percentage of what, calculated how, and paid when?”
What Is a Good Percentage for a Traditional Major-Label Deal?
In a traditional major-label model, new artists often land in a royalty band that many industry sources place around 10% to 20% on the label's royalty base, with higher rates tied to leverage, sales history, or strong alternatives. In record deals, one royalty point typically equals 1%, meaning an artist with 15 royalty points earns 15% of the label's royalty base.
This is the part that frustrates artists: 15% can be “normal” and still produce weak checks if the deal loads the artist account with recoupable costs, reductions, and slow statements. Recoupment means the label recovers advances and certain expenses from your artist royalties before you see cash.
A record deal percentage is also not the same as your music royalties from songwriting. If you wrote the composition, you may earn publishing-side money as well. Producer points can also reduce the artist's royalty share, because producers often take points out of the artist's points in major label structures.
Deal Types Comparison
| Deal Type | What the % Refers To | Common Range | When It Can Still Be Bad |
|---|---|---|---|
| Traditional record deal | Artist royalty rate (points) | 10–20% | Heavy recoupment, harsh deductions, long terms |
| PPD-based structures | % of PPD/wholesale base | ~20–25% of PPD | Controlled clauses, packaging deductions |
| Net profit deal | Split of “net” after costs | Often 50/50 | Broad cost deductions; distribution fees skim first |
| Distribution deal | Distributor fee on revenue | Up to ~30% fee | Hidden marketing recoup, rights grabs, term creep |
| 360 deal | Label share of multiple income streams | Varies widely | Cross-collateralization and broad income grabs |
If you want a clean answer for a classic major-label master royalty, a practical target many artists chase is “high teens” with limited deductions and sane recoupment. But the real win is often a smaller number paired with better definitions, fewer deductions, shorter term, and tighter options.
Indie Labels and Net Profit Splits
Indie record deals often pitch “partnership” language. The headline may be a net profit split, such as 50/50, which sounds fair until you audit the “net profit” definition. Labels can deduct fees such as distribution charges before the split, effectively shifting the real split away from 50/50.
If the contract defines net profit narrowly, caps recoupable categories, and gives you audit rights, a 50/50 split can be respectable. If “net” includes open-ended overhead, undefined marketing spend, or affiliate charges, that same percentage can become a mirage.
Distribution Deal vs Record Deal
Distribution deal vs record deal is one of the most useful comparisons for modern artists, because it forces you to ask what you receive in return for giving up rights. A distribution deal often lets the artist retain ownership of masters while paying a distribution fee.
For artists who already fund studio time, content, and marketing, a distribution model can make the percentage question easier, because the base is clearer: “we take a fee; you keep the rest.” It also reduces the trap where your artist royalties never clear recoupment.
If you want to pressure-test a label pitch, ask: “Why is this not a distribution deal?” If the label cannot point to concrete deliverables—radio promotion, playlist leverage, real marketing spend, tour support—then giving up ownership for a small royalty percentage rarely makes sense.
What Is a Good Percentage in a 360 Deal?
A 360 deal expands the label's participation into revenue streams beyond recorded music. The core idea is that the company invests in the artist's career and takes a percentage across multiple income sources such as touring, merchandising, endorsements, and sometimes publishing-side revenue.
“Good” in a 360 deal has less to do with a single number and more to do with scope. A narrower participation tied to specific services can be defensible. A broad “everything you touch” clause, paired with cross-collateralization, can trap you because income from touring can end up recouping record costs, and vice versa.
A fairer 360 approach usually aligns the percentage with the label's actual contribution. If the label does not fund touring, a touring cut looks like rent-seeking. If they do fund it, then the debate becomes: what share, for what period, with what caps and exclusions?
Music Royalties Explained for the USA
A record deal percentage sits inside a bigger rights-and-royalties ecosystem. In the USA, music royalties split into two big buckets: sound recording royalties (master side) and composition royalties (publishing side). Producer royalties and songwriter royalties live in different places depending on credits and agreements.
| Royalty Type | What Triggers It | Who Collects | Why It Matters |
|---|---|---|---|
| Sound recording performance | Plays on non-interactive digital services | Statutory collection with direct artist share | Label may not control all of this |
| Mechanical royalties | Reproduction of the composition | MLC for eligible US DSP licenses | Publishing income can rescue low record deal % |
| Label-paid artist royalties | Contract-based | Label accounting statements | Where recoupment and deductions hit hardest |
| Producer points | Master-side participation | Per producer agreement | Can reduce artist royalties in points-based deals |
How Royalties Are Calculated in Real Life
A good way to evaluate a record deal percentage is to do quick math in two scenarios: before recoupment and after recoupment. If wholesale is $10 and the artist's royalty rate is 15%, the artist's royalty is $1.50 per unit—but only after recoupment clears.
Translate that to modern reality: streaming payouts flow through multiple layers, and label accounting terms vary. If a label recoups recording, marketing, and video costs from your royalty pool, then your record deal percentage can function like a delayed wage, not a share of success.
This is also where artists ask, “Do record labels pay artists monthly?” Often, labels account on a statement cycle that may be quarterly or semiannual. Your record deal contract should state payment frequency, statement detail, and audit rights.
Contract Levers That Change Whether the Percentage Is “Good”
Two record deals can both quote an 18% royalty rate, yet one may generate far higher payouts than the other. The difference lies in the supporting clauses.
| Deal Factor | Why It Matters in Practice |
|---|---|
| Recoupment Scope | Determines which costs the label recovers before you get paid. Cross-collateralization across albums worsens this. |
| Royalty Base | 18% only matters relative to the base. PPD vs net profit and distribution fee deductions can dramatically reduce earnings. |
| Deductions | Packaging-style deductions taken off the top before the royalty rate is applied, quietly lowering payouts. |
| Term & Options | A strong royalty rate loses value if the term is overly long or options extend control without release commitments. |
| Audit Rights | Without audit rights, royalty statements cannot be verified. This single clause often determines if a deal is enforceable. |
The “Good Deal” Test Artists Can Actually Use
A good percentage is the one that stays meaningful after the contract does its math. A deal starts to look “good” when the record deal percentage matches the label's real investment, and the contract limits silent value leaks.
Silent leaks include open-ended marketing recoup, vague “net profit” definitions, broad deductions, cross-collateralization, and weak audit rights. If the label promises major-label outcomes—radio promotion, playlist leverage, press, and tour support—then the label should accept real risk, not push every cost onto the artist royalty pool while keeping ownership.
Conclusion: What Is a Good Record Deal Percentage, Really?
The real answer is this: it's the percentage that actually pays you after the fine print does its damage. A headline rate means nothing if it sits on a weak royalty base, gets carved down by deductions, cross-collateralizes every revenue stream, and locks up your rights for years with no real accountability.
Before you sign a record deal, especially a 360 deal or any agreement built on net profit language, have the contract reviewed by a music attorney who understands how these clauses work in the real world, not just on paper. A proper legal review can expose whether that “18%” is fair, or quietly stacked against you.
A record deal isn't just about getting signed. It's about getting paid—fairly, transparently, and on terms you can live with.
