What to Know Before You Sign to a Major Label

Every artist has imagined the call. A major label wants to sign you. A real marketing budget. Distribution at scale. The infrastructure to turn your music into something the world actually hears.

Sometimes that moment is everything it sounds like. But for a lot of artists who do not fully understand what they are agreeing to, signing to a major is also the moment they hand over control of everything they built and spend years trying to get it back.

The contract is not designed to serve your interests first. It is designed to protect the label's investment while giving you resources to grow. Those are two different things. Understanding that difference before you walk into any negotiation is the most important thing an artist can know.

The dominant contract structure at major labels today is the 360 deal. Under this agreement, the label does not just take a share of your recorded music revenue. They take a percentage of everything your career generates. Touring income. Merchandise. Brand endorsements. Acting work. Any money you make as an artist, the label is entitled to a portion of it.

Labels moved to this structure because streaming gutted recorded music revenue. When an album no longer generates what it once did, labels needed other ways to recoup their investment. The 360 deal spreads their participation across every revenue stream your career can generate.

From their perspective that is rational. From yours, it means you have a business partner with a financial stake in every professional decision you make for the full term of that contract.

The recoupment math is where most artists get caught off guard.

Say the label advances you $350,000 to cover recording costs, marketing, and rollout expenses. That money is not a gift. It is a loan against your future royalties. Every dollar you earn goes toward paying that advance back before you see a check.

Meanwhile the label continues collecting revenue. But their revenue and your royalty account are tracked separately. An album can generate millions for a label while the artist is still technically unrecouped and receiving nothing. Not because anything went wrong. Because that is exactly how the structure was designed.

Research on the Canadian music industry has documented this dynamic clearly. Artists who arrive at the negotiating table without understanding recoupment are at a disadvantage before the conversation even starts.

There are questions every artist must ask before signing anything.

Who owns the masters? The master recording is the original version of your music. Whoever holds that ownership controls how it is used and monetized for the life of the copyright. Most major deals require you to sign that over. Understand what you are giving up.

What is the full length of your commitment? Label contracts are built around album cycles, not calendar years. Three albums over a decade is a real scenario.

What creative controls are in the contract? Does the label have approval rights over your music, your features, your visuals, your public image? These clauses are common and can significantly constrain your creative decisions.

What marketing commitments are actually in writing? A large advance does not guarantee a large campaign.

A major label deal is not automatically a bad deal. For the right artist at the right moment it can be exactly the right move.

If you already have real traction, documented streaming numbers, sold-out shows, and a proven audience, you have leverage. You are not asking them to take a chance. You are bringing them a business they want access to. That shift changes the negotiation entirely and opens the door to better royalty rates, shorter commitments, and in some cases co-ownership of your masters.

At Prime Example Records, we have spent years watching artists walk into label negotiations underprepared and walk out with deals that took years to untangle. The advice we give is the same every time: build something real first. The artists who get the best deals are the ones who needed those deals the least.

Before you sign anything, get a music lawyer. Not a general practice attorney. Someone who reviews label contracts for a living and negotiates on behalf of artists. The cost of proper legal counsel is a fraction of what you could lose by signing something you do not fully understand.

Read every clause. Ask about every clause you do not understand. Never sign under time pressure.

The right deal is one you understand completely before you agree to it.

Prime Example Records is a Toronto-based music and entertainment company focused on artist development, digital campaigns, and event production. PrimeExample.ca