Production Deals. In this type of deal, the artist signs on with a production company (usually headed by an established producer). These deals are normally structured like a regular recording agreement. In essence, the producer will record the act's music and then attempt to obtain a deal with a record label. If the production company is successful in procuring a deal, the royalty paid by the record company to the production company on records sold will be divided between the production company and the artist.
Pressing and Distribution Deals (P&D Deals). In this situation, the artist delivers a fully mixed master and finished artwork to the record label, which in turn manufactures and distributes the records. One advantage of this kind of deal is that the artist should be able to obtain a higher royalty on sales because the act has already paid for the costs of recording the product.
Since it seems that major labels prefer to see what the public responds to before making a large financial commitment, many artists are considering independent labels, distribution deals, production deals, and P&D deals in order to prove that they do appeal to a record buying audience. As a warning, some of the operations listed above can be suspect. Thus, an artist should make sure that any deal made is with a reputable entity/person.
Ben McLane Esq