Ah, the age old question. Here’s how I break it down.
A demo is a “demonstration” recording of your song that will be used to “pitch” to recording artists. Usually these recordings are made (paid for) by music publishers and/or songwriters, with no intent to sell the recordings.
A master recording is something that you plan on selling via cd’s or digital downloads. Since many demo studios have the gear to produce master recordings, and since the talent pool is so great in town, it is highly feasible to record a “master” in a “demo” studio. Difference is, you MUST pay the musicians a different (higher) rate for the session. This schedule of fee’s is called a “limited pressing scale” or “master” scale. When paying the musicians “limited pressing scale” you are authorized to make up to 10,000 copies of your product to sell via cd’s or digital downloads. Master scale costs even more, and is used when the project is expected to sell more than 10,000 units (major label, etc).
Here are two examples of the Nashville Musicians Union Scale/Wage Chart. Compare the slight difference between demo and limited pressing rates.
For a full list of rates, scales and other wonderfully valuable insight, please check out the Nashville Musicians Association website.
Limited Pressing Scale