A master is a final version of a track after it has been mastered. It is in the format required for distribution. Within Label Engine this means that the track is a 16-bit 44100 Hz Stereo Wave file.
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A premaster is a version of the track before it has been mastered, which may not be in the format required for distribution. Within Label Engine any wave file that is uploaded that is not 16-bit 44100 Hz stereo will be marked as a 'premaster'.
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Typically, a mastering engineer would perform the processing needed to turn your premaster into a master. However, if a track has been mastered but is marked as 'premaster' in the Label Engine distribution system, you can convert it to 16-bit 44100Hz Stereo by clicking 'Convert to Master' when editing the track.

Similarly, if a track is marked as 'master' but you know that it is a pre-master, you can click 'Set as premaster' when editing the track for distribution.