fee
Joint Ventures (between an indie label and a major label)
- Indie and major label enter an agreement where both parties share costs and profits
- Indie generally performs the artists and
repertoire (A&R) function, selecting the artist and paying for the recording and production - Label pays manufacturing and distribution costs and may pay some promotion costs
- Ideally, indie pays 50% of the cost and receives 50% of the profit
Production Deals (including most vanity labels)
- Deal between major artist and his or her major label
- Label allows that artist to act as a producer, identifying and mentoring new talent under a separate indie label
- Major artist receives overhead, branding, and an increased royalty rate on the new talent–generally as much as 20%
- Major label pays all charges but the indie label doesn’t get paid until those costs are recouped new talent will most likely receive an advance; in some cases, that artist won’t see any more money