Direct Deals, SOBO, and Merlin

Updated July 2026.

LabelGrid supports three ways to get your music to stores: through LabelGrid’s own DSP agreements, through your own direct deals delivered via SOBO, or a hybrid of both. Which model you use decides who owns the DSP relationship and how much of your royalties you keep — direct deals and Merlin delivery let members retain 100%. This guide explains each model.

For how royalties are reported and paid, see the Royalties overview.

Distribution models at a glance

Distribution model	How delivery works	Royalty retention
LabelGrid deals	You distribute using LabelGrid’s existing DSP agreements; LabelGrid handles delivery, DSP relationships, and claim management	Retention per plan (a distribution fee applies for review, delivery, and claim management)
Direct deals (SOBO)	You bring your own DSP feed contracts; LabelGrid delivers on your behalf via SOBO — you are the licensor	100% (LabelGrid provides technical delivery only; no distribution or Content-ID fee)
Hybrid	Some releases via LabelGrid deals, others via your own direct deals, from one catalog	Per model, per release

The three distribution models

LabelGrid deals

With LabelGrid deals, you distribute your content using LabelGrid’s existing agreements with the DSPs. LabelGrid handles the DSP relationships, technical delivery, release review, and claim management (takedowns, disputes, and Content ID). In return, LabelGrid retains a distribution fee — the exact retention depends on your plan. This is the turnkey option for customers who want DSP access without managing store relationships themselves.

Direct deals (SOBO)

With direct deals, you already have your own agreements — called feed contracts — directly with the DSPs. LabelGrid delivers your content to those DSPs on your behalf using SOBO (Sent On Behalf Of), a DDEX directive that names you, the customer, as the licensor rather than LabelGrid. Your uploads go out under your own DSP account, you own the DSP relationship, and you handle your own quality control and claims. Because LabelGrid provides only the technical delivery, you keep 100% of your royalties.

Hybrid

The hybrid model combines both approaches. You can distribute some releases through LabelGrid’s DSP agreements and others through your own direct deals via SOBO — all managed from a single catalog. This suits labels that have direct deals with some platforms but rely on LabelGrid’s agreements for others.

What SOBO means

SOBO stands for Sent On Behalf Of. It is a DDEX directive included in the delivery that tells the receiving DSP the release’s licensor is the feed-contract owner — you — not LabelGrid. In practice this means:

• Your content is delivered under your DSP account and feed contract.
• You own the direct DSP relationship.
• LabelGrid acts as the technical delivery layer, not the licensor.
• You are responsible for your own review, quality control, and claim handling with the DSP.

Note

Because you own the feed contract on a direct deal, takedowns, disputes, and Content-ID claims are handled directly between you and the DSP. LabelGrid delivers the content but does not manage those relationships on a SOBO delivery.

100% retention on direct deals

On a direct deal delivered via SOBO, LabelGrid takes no distribution fee and no Content-ID fee — it provides technical delivery only. That means you retain 100% of the royalties the DSP pays out under your own contract. This is the model for customers who have negotiated their own DSP deals and want maximum retention.

Merlin Network delivery

LabelGrid is a recognized delivery platform for Merlin Network members. Merlin is an independent-sector digital licensing collective that represents a large share of independent recorded music. If your label is a Merlin member, LabelGrid can deliver your catalog under your Merlin agreements, and members retain 100% of their royalties on Merlin deals.

Tip

Merlin membership is arranged between your label and Merlin, not through LabelGrid. Once you are a member, contact LabelGrid to set up delivery under your Merlin agreements.

Which plans support direct deals and Merlin

Direct deals via SOBO and Merlin delivery are available on Custom and API plans, which are designed for customers who require 100% royalty retention or direct DSP-deal integration. If you need direct-deal or Merlin delivery, contact LabelGrid to discuss the right plan and set up your feed contracts.

FAQ

”What is SOBO delivery?”

SOBO — Sent On Behalf Of — is a DDEX directive that tells a DSP the licensor of the release is you, the customer, not LabelGrid. You bring your own direct DSP feed contracts, and LabelGrid handles the technical delivery on your behalf. You own the DSP relationship and keep 100% of your royalties.

”What are the differences between LabelGrid deals and direct deals?”

With LabelGrid deals you distribute using LabelGrid’s existing DSP agreements, and LabelGrid retains a distribution fee to cover review, delivery, and claim management. With direct deals, you use your own DSP contracts and LabelGrid delivers via SOBO — you keep 100% of royalties and manage the DSP relationship and claims yourself.

”Do I keep 100% of my royalties on direct deals?”

Yes. On direct deals delivered via SOBO, LabelGrid provides technical delivery only and takes no distribution or Content-ID fee, so you retain 100% of your DSP royalties. You own the feed contract and the DSP relationship.

”How does Merlin work with LabelGrid?”

LabelGrid is a recognized delivery platform for Merlin Network members. If your label is a Merlin member, LabelGrid can deliver your catalog under your Merlin agreements, and members retain 100% of their royalties on Merlin deals.

”Which plans support direct deals and Merlin?”

Direct deals via SOBO and Merlin delivery are supported on Custom and API plans, which are built for customers who require 100% royalty retention or direct DSP-deal integration. Contact LabelGrid to set up direct-deal or Merlin delivery.

”Can I use both LabelGrid deals and direct deals at once?”

Yes. The hybrid model lets you distribute some releases through LabelGrid’s DSP agreements and others through your own direct deals via SOBO, all from one catalog.

Related guides

• Distribution Overview — how distribution works with LabelGrid
• Royalties overview — how royalties are reported and paid
• Supported Stores & Platforms — where LabelGrid delivers
• Contact support — set up a direct deal or Merlin delivery