A look at Equity Records...
At Equity, recording costs are absorbed by the label. Artists retain ownership of their master recordings, are paid a larger-than-average share for compositions, and start getting royalty checks from the first SoundScan sale instead of waiting until they've recouped recording costs. Most importantly, Equity artists who sell 500,000 units earn an "equity" share in the company. A full-service label, Equity and its related Equity Music Group back their artists through development, production, marketing and touring.
In return for all of that, artists cut the label in on revenues from touring, merchandise sales, publishing and sponsorships, expanding the relationship to a full career partnership.