Deal terms indie labels need to look out for before signing

Independent labels face many of the same traps as artists—unclear funding terms, lopsided rights, and fine print that costs more than it’s worth. That’s why we built the Deal Comparison Tool: to help labels see through the fog, spot bad terms, and make smarter financial decisions. 

Dan Englander, cofounder of KingUnderground, thought he had two strong distribution offers on the table. But once he used beatBread’s Deal Comparison Tool, the picture changed. 

“After seeing the output,” he said, “I realized there were several scenarios where I could’ve ended up strapped for cash.” 

Here are a few deal terms indie labels should watch out for before signing anything. 

When a Deal Takes More Than Your Masters 

When indie labels sign funding or distribution deals, the terms often reach beyond the music itself. These are called ancillary rights, and they cover everything from merch to ticketing to fan engagement. 

Some funders or partners may ask for: 

• A cut of artist touring income (often 10% after venue/promoter fees) 

• Control over VIP experiences or fan club packages 

• A portion of the artist’s ticket allocation (sometimes up to 20%) 

• Exclusive rights to design, sell, and manage merchandise 

• The right to run your direct-to-consumer store 

• First dibs on future merch or publishing deals 

These rights add up – and they’re often locked in for the life of the deal (or longer). You might be able to negotiate them down, but rarely can you remove them entirely. 

For an indie label managing multiple revenue streams and artist relationships, these clauses can limit flexibility, strain partnerships, and reduce your cut of income you help generate. Make sure you know exactly what you're agreeing to and how much control you’re giving up. 

The Length of Your Deal Might Outlast the Artist's Career 

Many funding or distribution deals come with long license terms—7, 10, even 15 years isn’t uncommon. In some cases, especially with major label deals, the rights can be perpetual, meaning the label or funder controls the masters forever. 

For indie labels, this can severely limit flexibility, especially if the artist or catalog gains value over time. While terms can sometimes be negotiated with enough leverage, it’s rare to see anything under 10 years. Before you sign, ask yourself: How long are you comfortable being tied to this partner? And what does that mean for your ability to re-negotiate, sell, or re-release in the future? 

Smarter Deals Start With Smarter Tools 

A deal that looks great on the surface can hide a long list of limitations in the fine print. That’s why we built the Deal Comparison Tool—to help indie labels ask the right questions before signing anything. 

Whether you’re weighing your first offer or comparing multiple funding proposals, our tool helps you break down the terms, project your long-term returns, and avoid the traps that drain your bottom line. 

Because making smart business decisions shouldn’t require a law degree or major-label backing—it should be standard practice for every artist and indie label. 

Don't just sign a deal. Understand it. Compare it. Choose it.