Refers to the repayment of advances, recording costs, and other expenses by an artist to a record company through the artist's royalties. For example, if an artist is given a $100,000 advance and has recording costs totalling $50,000, then $150,000 can be recouped (taken from) the artist's royalties. The artist will not receive any royalties from the sale of albums until the record company has recouped all of these expenses.
Recoupment is the practice, common in the music industry, of claiming an advance provided to an artist back from that artist rather than (or, as well as) from related sources. Many record labels practice recoupment, and most new artists have little choice but to accept it since they lack the negotiating power to obtain a better contract.