The Power Shift from Label to Artists
Aug 26, 2025 | Law Student Blog,
By Alexis Trimm, Honors College of Arts and Science Student at the University of Missouri-Columbia
The music industry has long been shaped by a rocky relationship between artists and record labels. For decades, labels acted as the gatekeepers of music in exchange for owning master recordings and controlling the fate of artists. In return for having a label behind their names, many artists sign away long-term rights to their creative output, giving up their freedom to the labels. But today, these label-favored relationships are shifting, largely due to changing copyright laws, digital platforms, and an uprising of unhappy artists seeking to control over of their work.
A seemingly minor change to a United States law that allowed artists to reclaim control of their works may have been just the change these artists needed. The Copyright Revision Act, enacted in 1976 and effective as of January 1, 1978, introduced a change that has allowed artists (or their heirs, hereinafter all referred to as “artists”) to eventually reclaim control of their works. For example, under Section 203 of the Act, artists and songwriters who signed away rights to their master recordings after 1978 are legally able to terminate those contracts after 35 years.
The 35-year mark was reach in 2013, drawing thousands of artists to begin reclaiming their music that had been under label control for decades. Termination of these contracts is a statutory right, giving artists a fairer chance to benefit from their music, despite their treatment by the label. By reclaiming rights, artists can renegotiate their contracts to favor themselves rather than the label, go independent, or digitally share their music with fans.
There are many different types of deals a record label can have with an artist. The most common is a traditional record deal. In this arrangement, the label funds the production, marketing, and distribution of music in exchange for ownership of the master recordings and a royalty payment to the artist. Another kind of record label deal an artist can make is a “360 deal”, which allows labels to take income through all sources, including music sales, performances, merchandise, and endorsements. This arrangement offers more support to artists than a traditional record deal, but it still establishes the control a label has over an artist.
Distribution deals are another type of record deal, whereby an artist keeps ownership of their music but pays a label to distribute it. Here, artists retain ownership of their music but pay the label for distribution services. This scenario often appeals to artists wanting to be more independent. Further, licensing deals allow artists to license their music to a label for a specific period or purpose. This can provide for profit-sharing with a label without giving it full ownership. Labels often feel that their expertise can exponentially help an artist grow, but tensions arise in artist-label relations regarding creative control.
The level of creative control an artist retains in a record deal can vary, depending on the contract terms and leverage. Artists such as Prince and Taylor Swift have fought for greater creative control over their music over the years, underscoring the importance of their freedom. With the rise of social media and digital streaming platforms and tools, the number of independent artists has grown significantly. Independent artists keep ownership of their music and have more creative freedom than those in record deals. They may use social media and digital platforms to connect with their fans and grow their careers directly.
The Copyright Termination Act has helped shift power from labels back to artists, especially letting artists who signed deals in the 1970s, 80s, and 90s reclaim their works. Despite this, independent artists may lack industry connections and financial support that come with record deals. As a result, many artists choose to sign a traditional record deal to increase their chances of mainstream success, even if that comes with less creative freedom. Independent artists can choose a series of business models to grow their music, such as distribution deals, licensing deals, and independent distribution. Distribution deals entail retaining ownership of their work while still using a third-party distributor versus a licensing deal, where the artist allows a label to license their music while retaining ownership.
Lastly, they can do distribution themselves, directly through platforms like SoundCloud and YouTube. Due to the rise in the number of independent artists, many labels feel they are in trouble with lost revenue from the albums they own. When these albums sell or songs from them are used in television and film, the label can make a high profit. When artists reclaim the rights to their music, the labels can lose control over such recordings and therefore significant revenue.
The fight between artists and labels has received a lot of attention in the media, especially the 1990s case of Prince, who publicly fought his record label, Warner Brothers, for ownership and control of his music. He even appeared on stage with the word “Slave” written on his face and changed his name to an unpronounceable symbol to try and break his contract. After becoming commercially independent in 1996, Prince released music on his own label, NPG Records, but in 2014, the popstar signed a new deal with Warner Brothers, one that gave him ownership of the master recordings. He strategically made this deal to work with the Copyright Termination Act, as his debut album had been released in 1978, making it 35 years old and eligible for termination from Warner Brothers the year his new deal was signed. (Prince died in 2016, but his estate can benefit.)
Prince’s new deal helped show that many artists are no longer going to stand for their mistreatment by labels and just sign away all their rights or, at least, they’ll claw back their rights as soon as they can. These artists have learned that they may have legal leverage to fight for what they believe is deserved for their art. While copyright termination rights are powerful and can be very helpful to artists, they are not the sole ticket to artistic freedom. Loopholes still exist, with perhaps the most prominent being music that record companies classify as “works made for hire”. In traditional record deals, a label will often declare an original recording of a song is a “work for hire”, meaning that the label legally is the owner of that recording.
Litigation has been used to challenge this practice, especially when an artist is not a true employee of the label. If an artist signs onto a label as an independent contractor, then they are not considered a true employee of the label, and therefore the “work made for hire” classification does not hold up unless the agreement signed by both parties explicitly states that the work in question is a “work made for hire” and it falls within one of the enumerated categories of commissioned works.
The process of artists terminating their contracts and reclaiming their music is not a simple one. They must follow specific legal steps, including serving written notice of termination to the label that has had rights to the work no less than two years and no more than ten years before termination eligibility. In this written notice, they must also state the effective date of termination. Further, a copy of this notice must be recorded in the U.S. Copyright Office. A notice of termination can also be appealed, and artists only have a five-year timeframe to go through with their termination. If this deadline is missed, they may lose the opportunity to do so permanently. Further, such termination only affects copyright ownership in the United States, though a recent U.S. court decision suggested that it could apply globally.
As copyright termination rights become more widely understood and utilized by artists, the traditional music business continues to grow and change, perhaps favoring artists more than before. Record labels are being forced to adapt to artists wanting more freedom and fair treatment, and they may therefore have to offer more equitable deals with shared ownership and shorter timelines. Artists should no longer be held captive by record labels, and with the right strategic legal moves and proper planning, they may finally be able to own, control, and directly profit from their art.
The Copyright Termination Act has changed the nature of record label deals with artists. Although using this provision to artists’ advantage is still being explored, the future favors artists owning their own art and profiting directly from utilizing digital tools and platforms that didn’t exist earlier. As seen in both the older Prince vs Warner Brothers battle and with current rising artists, the days of record labels owning an artist’s music may be limited. The music industry may be whistling more to the tune of artist empowerment, and the melody has never sounded sweeter.
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