In the mid-2000s, indie rock boomed and major labels began signing many of the genre's biggest acts. Two decades later, MGMT, The Decemberists, Death Cab for Cutie and Modest Mouse, among others, have emerged from those deals into a wildly different music industry. For artists coming off major contracts, “it's a whole new era,” he says Kirk Hardinglongtime director and co-owner of label and management company Bad Habit.
Recording contracts changed drastically between 2004 and 2024. There is also a new set of players from which artists can choose — not just major labels and prominent indies, but also some distribution companies that offer some level of service. “You can choose what you want to be in your contract to a certain extent,” he says Scott Booker, the longtime manager of The Flaming Lips, who are currently out of contract with the label after fulfilling their deal with Warner Records. (Paramore is also a free agent.)
“If we end up signing,” Booker adds, “it will be a different kind of record deal than we would have signed even a decade ago.”
During the 2000s and into the 2010s, the majority of major labels signed low royalty deals and typically relinquished ownership of three to five albums for a long period of time (often forever). In addition, many agreed to what is known as “360 deals,” in which the company also participates in revenue from merchandise, sponsorships, ticket sales, and more.
At the time, record companies could obtain these types of terms because it was difficult, if not impossible, for artists to gain national exposure without the help of a record company. Now, artists can build a global presence before working with any company. This means they have the bargaining power to ask for, and sometimes receive, terms that would have been unthinkable just a few years ago. As a result, industry expectations around dealmaking have shifted.
“I don't think I've done a deal with anyone in recent years where the artist didn't get at least 50% of the profit,” says Harding. “The new wars that will be fought ensure that the deals and refunds are short-term so that the artist can get the deal done and get those new recordings back quickly.” (If a band licenses their album to a record label for 10 years, for example, after that time, the album reverts to the band, usually subject to the deal being reinstated.)
All of that said, an artist's leverage in record deal negotiations comes largely from their ability to produce streams. And that doesn't always work in favor of veteran rock bands. Rock is the fifth most popular genre when ranked by percentage of current streams, according to Luminate. “There aren't as many options as you'd think right now, given what's going on with rock music and streaming,” he says. Jordan Kurlandwho manages Death Cab for Cutie.
However, these acts have mostly proven they can build and maintain an audience — especially on the road, a challenge for many artists who came of age in an era of passive stream engagement. And some of them have a level of heritage that's attractive to labels, who always have to think about what will entice the next generation of signings. Friendly deal terms help, as does having artists on the roster that young actors look up to.
Whenever an artist signed to a traditional contract with a major label completes the deal, their old label usually still has a hook because they likely own the act's previous recordings. “If the label wants you to stay, they have the power to say, 'We can adjust the percentage of royalties in your catalog,' or in rare cases, take your recordings out of perpetuity and set up replays so you can eventually get them back.” ». Harding says.
“That always comes up now in renegotiations,” adds an executive at a prominent indie label. “Artists say, 'Fine, we'll sign you again, but we want those recordings back in 10 years.'
This leverage depends, of course, on the company's desire to maintain the complex. In the case of The Flaming Lips, “after American head, we started the conversation, would Warner write us back?' Booker recalls. “Is Warner even interested? It really came back that it wasn't, to be honest.”
Some veteran bands may still want to find a major label partner for specific services. While the influence of radio continues to decline, promotion remains expensive and the majors still have the most radio power. “Radio is still a big part of the Death Cab image,” says Kurland. During “the last Death Cab ticket sales campaign, for example, if you look at markets that no longer had an alternative radio station, [negatively] it affected our performances.”
“Could you sell fewer records and keep more money?” Kurland asks. “Yes. But are there other aspects of your business that might suffer by doing this?”
Ghadar Savour, an entertainment attorney who represents Built to Spill and other bands, asks a similar question — but is more optimistic about the answer. “If they do really well as a band, they can sell fewer records but keep the lion's share of the income and make a lot more money,” he says. “That's why you see a lot of bands getting into situations where they're no longer doing major label deals or even your typical 50-50 indie deal. They're looking for something more like a label services deal — which is a distribution deal with some services added for publicity and promotion.”
This is the route taken by The Decemberists, who have previously released five albums on Capitol, including The King is deadwhich reached No. 1 on the Billboard 200. For their upcoming album, the band chose to sign with Thirty Tigers, which is distributed by Sony's The Orchard and offers a number of services, including radio.
“We've found an option that provides label investment and infrastructure without compromising ownership, and that gives the band and their team real marketing autonomy,” he says. Jason Colton, who runs the band, via email. “It's a lot of responsibility for a bigger release, but ultimately, it's more investment, more control and outright ownership than you would find in a more traditional deal.”
In addition to major labels and distributors, indie label executives say they've also seen increased interest from veterans leaving major labels in recent years. The Yeah Yeah Yeahs signed a deal with Secretly Canadian in 2022 after years with Interscope, for example, while PJ Harvey released an album on Partisan in 2023 after 20-plus years with Island Records. MGMT's new album Loss of life came out in February via Mom + Pop.
Potential label partners have their own calculations to make. “It's hard for any company if you only have the new record and someone else has the whole catalog, because a new record always drives catalog listening, but you don't share in the revenue,” says the indie label executive. “But there's always been something that labels need and want major artists, even if they're expensive, to attract other artists.”
“A lot of these bands are in a good position so they can get favorable terms,” the person continues. “Maybe they're just doing a record deal. Hopefully we do a good job, the artist is happy, and we renew this contract. Over time, we work with them for the long term.”
Additional reporting by Melinda Newman.
