Contents
1. What is a music label in plain terms
A music label (or record label) is a company that signs a contract with an artist and takes responsibility for releasing, distributing and commercially developing their music. The name historically comes from the paper "label" on a vinyl record, which carried the company logo, track title and performer.
In 2026, a label is no longer just a publisher of physical media. It is a full ecosystem combining production, digital distribution, marketing, PR, legal support, video production and work with streaming platforms.
2. What functions a label performs
A modern music label covers at least five areas:
2.1. Release and distribution
The label handles the technical side: mastering, metadata, ISRC codes, uploading to Spotify, Apple Music, YouTube Music, Deezer, Tidal, Amazon Music, TikTok, Instagram Reels. Learn more in our guide Music Distribution.
2.2. Production
Large labels have their own studios or work with producers. The label may cover recording, mixing and mastering costs — sometimes even session musicians and songwriters.
2.3. Marketing and PR
This is the most expensive part: content plans for TikTok and Instagram, targeted advertising, work with bloggers and media, pitching to playlist editors (Spotify Editorial, Apple Music, YouTube Music), radio play.
2.4. Visual content
Music videos, lyric videos, cover art, photo sessions, reels, behind-the-scenes — this is also the label's or the joint team's responsibility.
2.5. Legal support and royalties
Rights registration, work with collecting societies, royalty collection for public performance, synchronisation deals (film, series, advertising), neighbouring rights royalties.
3. Types of music labels
| Type | Description | Examples |
|---|---|---|
| Major label | Global corporation with billion-dollar turnover and full-cycle operations | Universal, Sony, Warner |
| Indie label | Independent label, often focused on a genre or region | Sakhanda Music, Mamamuzic |
| Sublabel / Imprint | A "sub-label" under the umbrella of a larger company with its own brand | Def Jam (Universal) |
| Boutique label | Small niche label with 2–5 artists and a personal approach | Hip-hop and electronic lo-fi labels |
| Vanity label | A label created by the artist for their own releases | OVO Sound (Drake) |
| DIY / Net label | Operates exclusively online, often without advances | SoundCloud labels |
4. Major vs Indie — what's the difference
This is the most common choice an artist faces.
Major labels
- Large advances (from $50,000 to millions)
- Access to global radio play and the biggest playlists
- Smaller share for the artist (10–25%)
- Multi-year contracts covering several albums
- Often — transfer of rights to master recordings
Indie labels
- Smaller advances or none at all
- Flexible terms: 50/50, 60/40, 70/30
- Artist often retains rights to masters
- Contracts for one or two releases
- More creative freedom, personal approach
5. What a label contract looks like
A standard label contract contains the following sections:
- Parties — the artist (or their company) and the label
- Subject — which tracks/albums the agreement covers
- Territory — worldwide or a limited region
- Term — from one release to 5+ years
- Rights — exclusive licence, copyright assignment or 360-deal
- Revenue split — percentages for streaming, physical, sync, merchandise
- Advance and recoupment — whether there is an advance and how it is recovered
- Obligations — what each party must do
- Termination — conditions for exiting the contract
6. How much a label takes
This is question #1 for most artists. Market average figures:
| Deal type | Artist receives | Label receives |
|---|---|---|
| Major (standard) | 10–20% | 80–90% |
| Major (star artist) | 20–30% | 70–80% |
| Indie (licence deal) | 50–70% | 30–50% |
| Distribution deal | 80–95% | 5–20% |
| 360-deal (incl. merch and tours) | 15–30% | 70–85% |
Important: a high percentage doesn't necessarily mean more money. A major label at 15% often brings the artist more absolute income than a DIY release at 95%, due to the scale of promotion.
7. Label vs distributor — what's the difference
This is a key point of confusion. In short:
| Distributor | Label | |
|---|---|---|
| Release on streaming | ✅ | ✅ |
| Marketing and PR | ❌ | ✅ |
| Investment in production | ❌ | ✅ |
| Playlist pitching | Basic | ✅ Active |
| Legal support | ❌ | ✅ |
| Model | Flat fee or % of streams | Split of all revenue |
Modern hybrid models (like Sakhanda Music) combine both — the artist gets distribution + promotion without rigid multi-year contracts.
8. When an artist needs a label
A label is clearly needed if:
- You have no budget for studio recording and video
- You don't know how to pitch to playlists
- You want to get on radio and TV
- You're ready to share income in exchange for faster growth
- You need legal protection (plagiarism, licences)
A label is not needed (or not urgently) if:
- You have a strong existing audience (50k+ followers)
- You're comfortable with DIY marketing
- Music income is not your primary goal
- You want maximum freedom without obligations
9. How to sign with a label
- Build your portfolio — at least 3–5 finished tracks of professional quality
- Prepare an EPK (electronic press kit): bio, photos, stats, links
- Research labels in your genre — especially European and independent labels
- Submit your demo through the label's official form on their website
- Don't sign the first contract you see — show it to a lawyer
Ready to release your track?
Sakhanda Music — a European music label and distribution service. Submit a demo and receive a response within 7 days.
Get in touch →10. FAQ
What is a music label in plain terms?
It is a company that signs a contract with an artist, invests in their music (recording, distribution, marketing) and receives a share of income from releases.
How much does a label take from an artist's income?
From 5–20% (distribution deals) to 80–90% (standard major contracts). Indie labels typically work on a 50/50 or 70/30 split in the artist's favour.
Does an artist need a label in 2026?
Not necessarily. But a label accelerates growth when investment, a marketing budget and playlist access are needed.
What is the difference between a label and a distributor?
A distributor only delivers music to platforms. A label also handles marketing, production, PR and shares revenue under contract.
What is a 360-deal?
A contract under which the label takes a share not only from music, but also from touring, merchandise, sponsorship deals and other artist income sources.
Can you exit a label contract?
Yes, but the exit conditions are written into the contract. You often need to return the advance or buy back the masters.