A music video financed by a label is generally not a gift, and the money is not spent on the artist's behalf in the way the word budget suggests. It is an advance that has to be earned back.
Recoupment is the central mechanism
Costs advanced by a label are recovered from the artist's share of income before any of it reaches the artist. The video budget joins the recording advance in that balance.
Until the total is repaid, the release generates revenue for the label and nothing for the performer, even where the record is doing well commercially.
This is why an artist can have a widely seen video, a successful single and no income from either, which surprises audiences who assume visibility means payment.
The video is a marketing cost that the artist carries
A label commissions a video to promote a release, which serves the label's interest in selling that release, and the expense is then charged to the artist's account.
The arrangement is standard rather than exceptional, and the terms of what is recoupable are set in the recording agreement long before any video is planned.
Some agreements split video costs between the parties, which reduces the burden without changing the structure of who is accounting to whom.
Budgets are set against expected return
Spending is calibrated to what a release is projected to earn, so an established act receives more not because of prestige but because the projected recovery supports it.
A developing artist receives less for the same reason, and the resulting production constraints are a direct consequence of the accounting rather than of ambition.
Where a video overruns, the excess also becomes recoupable, which is why production companies are held to fixed budgets more tightly here than in advertising work.
Independent production changes the arithmetic
An artist funding a video directly owns it outright and has no recoupment to clear, so any income from the release reaches them immediately.
The cost is that the money has to exist first, and the scale achievable independently is usually far below what a label would advance.
Falling equipment costs have narrowed that gap considerably, which is a large part of why self-funded videos became viable rather than exceptional.
Where the video earns anything back
Advertising revenue from video platforms flows through rights holders, and how much of it reaches the artist depends entirely on the agreement in place.
A video also functions as promotion for touring and licensing, and those revenues are often outside the recoupment account, which makes them more valuable per unit than they appear.
Understanding which income streams sit inside the recoupable balance and which sit outside it is the practical question, and it varies far more between deals than the headline budget does.