Quick Definition
Recoupment is the process by which an artist repays a monetary advance provided by a record label or music publisher. The label keeps the artist's share of royalties until the advance (and often other agreed-upon costs) is fully paid back.
Recoupment Explained
If you are "unrecouped," you owe the label money (against future earnings) and will not receive a royalty check. If you are "recouped," you have paid back the debt and will start receiving payments.
Crucially, recoupment usually comes only from the *artist's share* of royalties, not the total revenue. If you have a 15% royalty rate, you are paying back the debt using only 15 cents of every dollar the record earns.
Why It Matters
Many artists sign deals with large advances and never see a royalty check because they never recoup. Recoupable costs often extend beyond the cash advance to include recording costs, video production, and tour support.
Examples
Advance: $50,000. Video budget (recoupable): $10,000. Total debt: $60,000. If the artist earns $2 per album sold, they must sell 30,000 albums to recoup ($60,000 / $2). Until then, the label keeps all the money.
Cross-Collateralization
A common clause links multiple albums together. If Album 1 is unrecouped by $20k, but Album 2 is a hit, the label can use royalties from Album 2 to pay off the debt from Album 1.
Related Terms
See also: Music Advance, Royalties, 360 Deal.
Track Your Performance with Soundcharts
Knowing your real-time streaming numbers allows you to estimate when you might recoup, giving you better financial visibility.