The word that misleads more new artists than any other in a record contract is "advance". It sounds like a payment. It is a loan. The label fronts money for recording costs, videos and living expenses, and every pound of it is recoupable: repaid not from the artist's pocket but from the artist's royalties, which is worse than it sounds. If the royalty rate is 18 per cent of the label's receipts, a fairly typical figure for a new signing, then each pound the record earns pays down the debt at 18p. The label keeps its 82p share regardless. An act that takes a £100,000 advance therefore needs the label to bank well over £500,000 before the artist's statement shows a positive balance, and until that day the artist's recorded-music income is, on paper, nil.
Recoupment also travels. Most deals are cross-collateralised, meaning the unrecouped balance from album one is carried against album two, and video costs, tour support and half the cost of remixes are commonly added to the pile. The Musicians' Union and the Ivors Academy told the Commons Digital, Culture, Media and Sport Committee's 2021 streaming inquiry that large numbers of legacy artists remain unrecouped decades after signing, still earning nothing from records that stream millions of times a month. Some majors, led by Sony in 2021, responded by writing off unrecouped balances on pre-2000 deals, a concession that quietly confirmed how normal permanent debt had become.
Then there is the question of who owns the recordings themselves. A standard exclusive recording agreement assigns the masters, the actual copyrighted recordings, to the label, usually for the full life of sound recording copyright, which in the UK lasts 70 years from release. The songwriter keeps the composition, administered separately through publishing and collected via PRS for Music, but the recording belongs to the company. American artists at least have a statutory termination right that lets them claw back US rights after 35 years; UK law offers no equivalent, which is why British artists from Taylor Swift's UK peers down to pub-circuit veterans can spend an entire career watching someone else license their own voices. Swift's re-recording campaign was a workaround, not a right, and labels have since lengthened re-recording restriction clauses specifically to close that door.
The 360 clause
Streaming shrank the pie that royalties are cut from. A single play on the largest platforms generates a fraction of a penny in total, of which the label takes the majority share before the royalty calculation even starts. Labels responded to their own shrinking margins by widening the base: the multiple-rights or 360 deal, standard for major-label signings since the late 2000s, gives the company a percentage, commonly between 10 and 30 per cent, of income streams that historically belonged entirely to the artist. Touring receipts, merchandise, brand sponsorship, acting fees and sometimes publishing all flow partly to the label, on the argument that its marketing spend builds the name that earns them.
The artist's defence is that live income arrives through different pipes. Ticket money comes via promoters such as Live Nation and AEG, merch through the venue or the artist's own company, and broadcast performance royalties through PPL, which pays performers directly under equitable remuneration rules that a label cannot intercept. A 360 clause reaches into those pipes by contract, but the percentages are lower than the label's share of recording income, and the costs are the artist's to control.
Why everyone is on tour
Put the three mechanisms together and the modern touring economy explains itself. Recorded music pays the artist last, after an open-ended debt, at a minority rate, from a per-stream sum measured in fractions of pennies. The masters generating that trickle belong to someone else until the 2090s. Live performance, by contrast, pays quickly, scales with demand, and even under a 360 deal leaves the artist the largest slice. The relentless festival circuits, the £30 T-shirts, the VIP soundcheck packages: none of it is vanity. It is the rational response of people who signed away the recordings and kept the road, and it will persist until either streaming rates or contract law, both examined but left largely intact after the 2021 inquiry, shift the balance back towards the thing the deal was supposedly about.
