360 deals vs distribution vs label services: which deal takes what

An independent artist with some traction gets offered three kinds of deal: a distributor, a "label services" company, or a record deal that may be a 360. They are often pitched as rungs on one ladder. They aren't: each takes different rights, for a different length of time, for different money and help.

This explainer leans on two UK competition regulator (CMA) documents, the most detailed public account of how these deals work, plus Warner Music Group's annual report and one distributor's contract. It isn't legal advice. Treat every number as a range to check your offer against.

The three deals in one table

Sources for each cell are linked below. The last row is our reading: the song and the recording are separate copyrights, so publishing normally has its own deal. None of our sources says a standard 360 takes a share of it; whether yours does depends on how the contract defines income.

Distribution: you keep everything, and you do everything

The CMA's final report on music streaming (November 2022) describes "distribution only" deals with DIY platforms as involving no upfront investment: "All revenues earned go to the artist", and the platform charges a fixed annual or monthly fee.

DistroKid's distribution agreement shows it on paper. It says in capitals that DistroKid "doesn't take any copyright or other interest in any of your music, only a limited license to distribute". The license is non-exclusive. It posts to your account 100% of the money it receives from stores for your recordings, after payment-processing fees. The term is one year, renewing automatically unless you cancel. Its cheapest plan is $24.99 a year.

The catch: no money up front and little help beyond the plumbing. The CMA also reported that one DIY platform told it 99% of its clients earned less than $200 a year from streaming. Owning 100% of a small number is still a small number.

Label services: you keep the masters, rent them out for a few years

In its provisional findings on Sony's purchase of AWAL (11 Feb 2022), the CMA set out how "artist and label" (A&L) service providers usually work:

• Artists usually make the record themselves and keep full ownership of the copyright. The provider gets an exclusive license to sell and distribute it for an agreed period, typically two to three years.
• Deals tend to be short, sometimes rolling every 30 days, with no commitment to future records. Where the provider pays advances or invests up front, the deal is longer and can tie in future projects.
• Artists typically pay a distribution fee, often 15-30%. Typically all costs are recoupable directly from the artist's portion of earnings.
• Providers are unlikely to match a label's tour support, advances or radio promotion.

The CMA's final report sums up the trade-off: smaller advances and less risk for the provider, but shorter tie-ins and higher royalties for the artist, who stays the copyright holder.

Traditional deals and the 360 add-on

The same provisional findings describe the traditional major-label deal: the label owns the recording, often for the copyright's life, or holds an exclusive license that can run around 20 years; it pays a large advance; it pays the artist a royalty commonly in the 15-20% range once costs are recouped; and it signs the artist for several projects (a "1+4" deal is the current record plus four more), which often means exclusivity for more than seven years. For how an advance is paid back out of that royalty, see our recoupment explainer.

The CMA's data on new major-label contracts shows those terms have been loosening. Between 2012 and 2021 the average gross royalty rose from 19.7% to 23.3%, the average number of commitment periods fell from 3.8 to 3.0, and the share of contracts where the label owns the recordings in perpetuity fell from 66.0% to 26.4%.

A 360 deal is a traditional deal where, in the CMA's words, "the label takes a cut of all the artists' earnings (ie wider than recorded music)". The US Copyright Office said much the same in 2015: artists may have to share live, merchandise and other income with their label. Warner Music Group's annual report for the year to 30 Sep 2025 says "many" of its recording contracts are "expanded-rights deals, in which we share in the touring, merchandising, sponsorship, fan club or other ancillary music revenues". The line that includes those participations, together with Warner's own artist-services businesses, brought in $835 million, up from $684 million a year earlier.

The extra risk for the artist is recoupment. The andr guide notes that 360 deals "may extend recoupment across multiple income categories including touring and merchandise", where a traditional deal generally leaves that income alone. We could not find an authoritative public figure for the size of a typical 360 share, so we won't quote one.

What we think

Start with distribution, and treat it as a test, not a career. It is the only option where you give up nothing you can't take back next year. If the music isn't finding listeners, no deal fixes that.

Label services are the best fit for most independent artists with real traction. You keep the copyright, and in our reading of the CMA numbers a 15-30% fee leaves you far more of each pound or dollar than a 15-23% royalty does. The trap is the advance: once a provider pays up front, the term lengthens, future records get tied in and costs come out of your share. That is a small label deal under another name. Read it like one.

A 360 makes sense only when the label actually works the income it takes. A label that runs your merch, books shows or brings in sponsors is offering a service. A label that takes a cut of tour income it does nothing to create is charging rent on your whole career. Warner's 10-K says plainly that these deals help it diversify its revenue streams. That is a reason to negotiate them, not to refuse them on principle.

The leverage is real, so use it. The CMA's data shows perpetual ownership falling from two-thirds of new major contracts to about a quarter in under a decade, and it says the new deal types may have strengthened some artists' bargaining position. In our view, an artist who can credibly walk away to a distributor negotiates from strength.

Before you sign: a checklist

• Who owns the masters at the end? "Exclusive license for X years" and "assignment for the life of copyright" are very different deals.
• What does the provider keep: a fee, a royalty split, or both? On gross or net receipts?
• If there is an advance, what else becomes recoupable, and from which income? Ask for touring and merch to be excluded from recoupment.
• In a 360, list each income stream, the share, what the label does for it, and whether the share ends with the recording term.
• How do you get out? Look for a notice period, a cap on option periods and a clear end date.
• Have a music lawyer read anything with an advance, an exclusive term or a share of non-recording income.