Label vs Distribution: what you need to know before signing that contract

The dream for many emerging artists is to be capable of earning a comfortable living from their music.

To achieve this goal, these artists need to get their songs to the audience whose mass attention becomes streams, patronage, and support that translate into stardom, revenue, and success.

Getting the music across to a large audience requires resources, which continue to increase due to the digitalisation of music consumption and the advent of social media platforms as the primary marketing tool.

A record label or a distribution contract is the most common deal you will be offered as an emerging artist.

They may sound similar, but they are not the same thing. Knowing the difference can save you a lot of stress and, in extreme cases, a protracted lawsuit.

A record label is a music company that signs, develops, and markets an artist.

A record label doesn’t just put your music out; they invest in you. They fund the creation process of your music, whether from setting up writing camps, booking studios, pairing you up with an A&R, paying producers, and audio engineers.

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The label also plays a role in your branding, media training, exposure, and positioning. The label deal provides you with financial backing that helps you make music, brand yourself, and market your music to consumers.

In return for this, the label usually offers long-term contracts, exerts creative control, takes a high percentage of your income, and owns your masters.

A distribution company's job involves distributing the music of its clients across streaming platforms.

They offer extra services like pitching to these platforms to get editorial support for clients.

A distribution company doesn't fund your recording process or the marketing of your music. They also don't invest in your branding and development.

In return for their services, a distribution company takes a cut of your streaming revenues. In some cases, distribution companies may offer an advance that allows them to license the music and take a bigger cut of the revenue for a specified period.

If you prefer a Do It Yourself system that lets you oversee your creative process, handle your release dates, and keep your masters, you should go for a distribution company.

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Your decision should be shaped by what you want for your career.

If you need an investment in your career that helps you make and market your music, then you should consider a label contract. Aside from their deep pockets, labels also have connections with the media and ecosystem that can ease your path to success.

On the other hand, if you priotise creative control and owning your masters over heavy investment in your craft, a distribution deal may be right for you.

Additionally, the capital-intensive and high-risk nature of label deals makes them more difficult and rare to come by as opposed to distribution deals, which carry no significant risk to either the distributor or the artist.

So even if you crave a label deal, you might need to start building with a DIY distribution deal that can help you achieve success that will then attract the labels to invest in you.