What’s the Typical Revenue Split Between Artists and Labels?

The relationship between artists and labels has long been both a cornerstone of the music industry and a source of contentious debate. At the heart of this dynamic lies one central question: how is the money divided? Revenue splits between artists and labels not only shape careers but also influence the broader landscape of music production, distribution, and innovation.

For decades, these deals have been shrouded in secrecy and dominated by industry giants who hold the cards. But as the music industry evolves in the streaming era, new deals and emerging business models are reshaping how artists and labels share the profits. To understand the typical revenue split—and how it’s changing—you have to look at the history, the present-day realities, and the potential future of artist-label agreements.

Building Credibility: A Legacy of Control

For most of the 20th century, record deals were notoriously lopsided. Labels would typically claim ownership of master recordings and take the lion’s share of the revenue. The standard structure was a royalty-based system: artists would earn a percentage of sales (or later, streams), often ranging from 10% to 20%, depending on their bargaining power.

In exchange, the label covered all production, marketing, and distribution costs—expenses that could run into the millions for top-tier acts. While this setup gave artists access to the resources they needed to succeed, it also came with significant drawbacks. Advances were recoupable, meaning the artist’s share of revenue was used to pay back upfront costs before they saw a dime of profit. Even worse, artists rarely had a say in how money was spent, leading to bloated budgets and delayed earnings.

The logic of this system was rooted in an era when physical sales dominated. Pressing records, producing tapes, and distributing CDs required significant investment. Labels assumed the financial risk, so they claimed the bulk of the reward. But for artists, especially those who didn’t achieve blockbuster success, the result was often debt and frustration. The phrase “the label owns everything” became shorthand for the exploitative nature of these contracts.

The Streaming Era: A Shifting Paradigm

With the rise of streaming platforms like Spotify, Apple Music, and YouTube, the revenue landscape has shifted dramatically. Physical sales have dwindled, replaced by digital plays that pay fractions of a penny per stream. While labels still control a substantial share of these earnings, the typical artist-label split has begun to loosen as new models and independent options emerge.

In today’s deals, major label artists can often negotiate better royalty rates, especially if they’re established or have substantial leverage. Rates might now range from 15% to 25% of revenue, with top-tier acts occasionally securing deals where they own a share of their masters or even retain full ownership.

Still, the basic structure remains similar. Labels take a significant portion—often 70% to 80%—to cover costs, invest in marketing, and secure placement on streaming platforms or playlists. For independent artists working with distributors or boutique labels, splits can vary widely. Some distributors, like TuneCore or CD Baby, offer flat-fee models that let artists keep 100% of their revenue. Others, such as DistroKid or AWAL, operate on percentage splits, typically retaining 10% to 30% of earnings.

The shift toward digital distribution has also given rise to licensing deals, where artists retain ownership of their masters and license them to labels or distributors for a set term. In these cases, the split might be closer to 50/50 or even more favorable to the artist, depending on their leverage and the scope of the agreement.

The Debate Over Fairness

While the revenue split between artists and labels has improved over time, the fundamental question of fairness persists. Critics argue that even with better royalty rates, labels continue to extract disproportionate value from artists’ work. Streaming has exacerbated this issue: with payouts so low, many artists struggle to make a living, even when their music is popular.

A significant factor is how streaming revenue itself is divided. Platforms like Spotify pay the majority of their revenue—up to 70%—to rights holders, including labels and publishers. For artists signed to traditional deals, this money passes through the label first, where the split is applied. This structure means that artists often receive only a fraction of what the streaming service pays for their music.

Advocacy groups, independent artists, and even some established musicians have called for greater transparency and more equitable splits. The rise of direct-to-fan platforms like Bandcamp and Patreon has fueled this conversation, showing that artists can thrive when they retain more control over their revenue streams.

On the other side, labels maintain that their share is justified by the value they provide: financing, marketing expertise, and access to global networks. For new artists without resources or industry connections, these services can be invaluable. But for those with established audiences, the trade-off is less clear.

A Changing Equation

The typical revenue split between artists and labels is a snapshot of power dynamics within the music industry. While the balance has historically favored labels, the tides are turning. Artists now have more tools, platforms, and leverage than ever to negotiate fairer deals—or bypass labels entirely.

The conversation around revenue splits isn’t just about money; it’s about valuing artistry, innovation, and the people behind the music. As the industry continues to evolve, one thing is certain: the future of artist-label partnerships will be defined by equity, collaboration, and a growing recognition of the artist’s power.