The Misconception About The Record Labels Owning

Unless the artist completely relinquished the rights to the masters on a contract, a record label rarely owns 100% of the artist masters. Usually ownership is between 90/10 and 60/40 on a good deal. An artist with a 50/50 contract is practically in a partnership. The misconception about the record labels owning 100% of the masters comes from what the record labels know as recouping.

All labels have a recoup policy which allows them to recover the money they spent on the recordings before paying the artists. So if a record label spent 100k to produce a master but the artist only made 50k on sales, the artist is still in debt with the record label and once the contract is over, the record label may choose to collect up to 100% of the royalty earnings until the recoup amount is met. But if the artist meets the recoup amount then royalties will be split at the agreed amount on the contract. That split also represents the percentage of the artist’s ownership of the master.

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