Record labels typically take between 70% to 85% of an artist's recorded music revenue, which includes streaming, digital downloads, and physical sales. I'll break down exactly how this works and what artists can expect from different types of deals.

The traditional record deal, often called a "major label deal," usually gives artists 10-25% of their recorded music earnings. This means the label keeps 75-90% of all revenue generated from the artist's music. However, this percentage can vary based on several factors:

For new artists: - Usually receive 10-15% royalty rate - Must recoup all advanced costs before earning royalties - Often face high marketing and production deductions - May need to share royalties with producers

For established artists: - Can negotiate rates up to 20-25% - May retain more rights to their masters - Often get better terms on recoupment - Have more leverage in contract negotiations

Different types of deals affect how much labels take:

Distribution deals: - Label takes 15-25% of revenue - Artist maintains ownership of masters - Lower marketing support - More creative control

360 deals: - Label takes 20-40% of ALL revenue streams - Includes touring, merchandise, and sponsorships - Often comes with larger advances - More label involvement in career management

The actual money artists receive is further reduced by: - Recording costs (deducted from royalties) - Marketing expenses (usually recoupable) - Producer royalties (2-4% of retail price) - Distribution fees (10-15% of wholesale)

In today's digital age, independent distribution platforms offer alternatives: - Artists keep 80-100% of their revenue - Pay only distribution fees (5-15%) - Maintain full ownership of their music - Handle their own marketing and promotion

The bottom line is that while major labels take a significant portion of an artist's recorded music revenue, they often provide valuable services like marketing, promotion, and industry connections. Artists must carefully weigh these benefits against the high percentage labels take from their earnings.

For most new artists signing with major labels today, they can expect to keep about 15-20% of their recorded music revenue after all deductions and recoupment obligations are met. This percentage increases with success and negotiating power, but it rarely exceeds 25-30% even for established artists.

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