Record Deal vs Licensing Deal: Who Owns Your Master When a Label Wants an Exclusive?

A label wants to release your music, and the first question is who will own the master, the finished recording, afterward. In a record deal the label usually does. In a licensing deal you keep it, and the label gets exclusive rights for a set term.

This guide explains both structures, what exclusive does in the second, and what to check before you sign.

Two ways to give a label your recordings

In an assignment, the artist transfers the copyright in the recordings. Sound On Sound says that under most exclusive recording contracts the artist assigns copyright in the sound recordings to the record company, and that an assignment is a transfer of ownership for the full life of the copyright. Only in rare instances, the article says, does an artist win a clause that returns the copyright.

In a license, the artist keeps the copyright and gives the label permission to use it. A Canadian law firm describes a licensing deal as one "where the label is entitled to exclusively license (not own) the masters for a fixed period of time." On a release, a license deal is the kind that can produce a ℗ line such as ℗ 2027 Artist under exclusive license to Label.

Side by side:

• Who owns the master: with an assignment, the label. With a license, you.
• How long: with an assignment, the life of the copyright. With a license, a fixed term.
• What comes back: with an assignment, usually nothing unless the contract says so or the 35-year rule below applies. With a license, the rights, when the term ends.

What exclusive does in a license

Labels usually insist on it. The Arts Law Centre of Australia says licensees will usually require exclusive rights in their territory, because they invest there and do not want other licensees competing over the same recordings. The catch falls on the owner. If you grant an exclusive, worldwide license, you can no longer use the recording yourself unless you negotiate carve-outs. Arts Law's example is an artist who keeps the right to sell online and gives a U.S. licensee the exclusive right to physical sales in that country only.

Do not confuse this with a second kind of exclusive. Many labels also want the artist's recording services to be exclusive, so the artist cannot record for someone else. The Canadian firm says a label is rarely, if ever, going to sign a deal with an artist that is not exclusive. Check both.

Eight terms to check before you sign

• Term and options. How long does the license run, and can the label extend it or claim your next recordings? The Canadian firm's example of an initial period plus two option periods "could easily take 3-5 years."
• Territory. Which countries? Two exclusive licensees cannot share one territory, so map them carefully if you license different regions to different labels.
• Rights and formats. Which uses are included: streaming, downloads, vinyl, video? Arts Law says a license can cover all of the rights or only some, such as vinyl but not streaming. Extras like your name and photos should almost always be non-exclusive.
• Release commitment. Arts Law says the owner can require release within set times, with the rights reverting if the label misses them.
• Money. Advances are usually prepayments that the label recoups from your royalties, not a windfall. Ask what the royalty is based on and which costs come off first.
• Collecting income. Licensees often want to collect all of a recording's income in their territory, including from collecting societies. Arts Law advises artists to register with those societies themselves, SoundExchange in the U.S., so they can collect their own share directly.
• Clearances. The label will want a guarantee that samples, session work and songs are cleared. Arts Law says the contract usually makes the owner liable if they are not.
• The end. What happens to takedowns, to unsold physical copies (a sell-off period of three to six months, Arts Law says) and to your accounts and metadata when the term ends?

When the term ends, and the 35-year rule

In a license, the rights come back. Arts Law says that at the end of the term the rights granted to the licensee revert to the owner, who can negotiate new terms or license someone else. Check that your contract says so, and says what happens to the label's unsold stock and its access to your accounts.

In an assignment with no reversion clause, U.S. law gives authors a second chance. Section 203 of the Copyright Act lets an author terminate a transfer or license they signed on or after January 1, 1978. The window is five years long and generally opens 35 years after the grant. The author must serve written notice two to ten years before the date and record a copy with the Copyright Office. The right does not apply to works made for hire, and derivative works made before termination can still be used. It is a long wait and a technical process, so treat it as a safety net and not a plan, and ask an attorney whether it applies to your recordings.

When a license works like a sale

The label on the paper does not settle it. Pace Law Firm's 2026 guide warns that a license can be drafted so broadly, exclusive, worldwide, perpetual and fully sublicensable, that it "functions like an assignment in practice." It adds that a narrow assignment with strong reversion triggers can be less risky. Read the grant, the money terms and the ending clauses together.

If your recording uses a licensed song

A label deal covers your recording. It does not cover the song, which still belongs to its writers. Expect the label to ask for proof that everything on the record is cleared, and do not promise rights you only hold on license.

Keep your license certificate, receipts and any signed agreements with producers and players in one folder, and ask the writers or a lawyer how a label release changes what you need. Our guides on what to send when someone asks for proof of rights and on whether an exclusive license means you own the song can help.

A short example

Sam owns his masters and gets two offers. Label A offers to buy the recordings outright. Label B offers a five-year license for Europe, with the rights coming back to Sam afterward and the rest of the world left with Sam. The difference is not in the wording. It is in what he keeps and for how long. Under Label B's license his European release reads ℗ 2027 Sam under exclusive license to Label B. Sam and the labels are made up.

What to do next

• Ask for the offer in writing, and ask whether it is an assignment or a license.
• Mark up the eight terms above and ask for anything that is missing.
• Have a music attorney read it before you sign. A license can be written to act like a sale.
• Keep copies of everything, including the license for any song on the record.

This is general information, not legal advice, and contract terms differ by country. Still choosing songs for your next release? You can browse songs for artists and hear them in different styles before you decide.

Sources

• Sound On Sound: Recording Contracts Explained
• Cox & Palmer: Record Deals and Contract Tips, Part 2 (2022)
• Pace Law Firm: Creator & Artist Contracts, Untangling Ownership, Royalties & Reversion (2026)
• Arts Law Centre of Australia: Master Recording Licence Fact Sheet
• Australian Music Industry Network and MusicNSW: Master Licence Fact Sheet
• U.S. Copyright Office: Title 17, Chapter 2, Copyright Ownership and Transfer (Section 203)
• U.S. Copyright Office: Termination of Transfers and Licenses