In the previous post, I touched on music distribution deals and also mentioned the P&D deal (press and distribution deal).
This post will explain in detail and give you a better perspective on the subject. So let’s go over it together.
What is a press and distribution deal and how it works
A Press and Distribution (P&D) deal also referred to as production and distribution is the type deal which allows the record label or artist to make more money per record. I mentioned artist but I must emphasize that the artist should have a formally registered company for this type of deal.
Instead of doing a joint venture with a major record label (which is common in the music industry), you sign a distribution agreement with a distributor. However, it is not uncommon for a label to provide a distribution service.
It’s called a pressing and distribution because the distributor provides a service to manufacture and ensure that your product is available to all retailers on their network
But as the owner of the label, you are responsible for but not limited to the following:
- Recording (Studio time), Producer fees (Buying beats), Mixing, Mastering
- Marketing and Promotions (Music Videos, websites, etc.)
- Royalty Payments
- Public Relations
- Storage warehouse fees
- Manufacturing costs
And every other expenditure that you can think – it’s all on you. The distributor will render the distribution service only but you will run the show as you see fit, it’s your baby.
But as the saying goes – No risk No reward. So since you are taking most of the risk that means you will keep the bulk of the proceeds should your sales jump off.
A typical P&D deal is an 80/20 per cent split in favour of the label.
The Pressing and distribution deal is nothing new though. Most independent labels are signed to licensing deals (or label deals) with major record companies.
But the major label uses the same P&D model and system (and have been doing so for decades) to provide this service (except for recording costs) to the Indies because they have the financial muscle to do so.
In case you don’t know, a major label is a company like Sony Music, Universal, or Warner Group (The Big Three).
The press and distribution deal looks good on paper for the savvy entrepreneur/artist but it’s far from perfect (nothing is). If the label is artist-run then you might have to wear several hats in order to run the business efficiently.
Having said that, let’s go through some of the advantages and disadvantages of the press and distribution deal.
Advantages of Press and distribution Deal
- It’s a scalable business and with no middlemen involved
- High-Profit Margins (70-85% gross margins)
- You (artist/label) retain creative control
- You retain ownership of all the masters and copyrights of your music
- In charge of your own destiny
- You control the budgets, cash flow and how much money is spent on each project
Disadvantages of Press and distribution Deal
- Requires large amounts of start-up and working capital
- You need to be hands-on unless you hire a manager to run the business
- High Barrier to entry (It’s not for everyone, you need lots of money)
- It’s a high-risk business model
- Low sales leave you with inventory that you can’t get rid of
- You carry the costs for the entire operations
List of notable artists/labels in South Africa (previously or signed to a P&D):
- Cool Spot Productions (Defunct)
- Bulldawgz Records (Defunct)
- Ghetto Ruff/Motherland (Active)
- Will of Steel Productions (Active)
- Ambitious Entertainment (Active)
- House Therapy (Defunct)
- Soul Candi Records (Active)
- Sheer Music (Defunct)
- Big Fish Records (Active)
List of notable artists/labels in the USA (previously or signed to a P&D):
- No Limit Records (Defunct)
- Priority Records (Defunct)
- Swishahouse (Active)
- Cash Money Records (Active)
- TVT Records (Defunct)
- Loud Records (Sold to Sony)
- Profile Records (Defunct)
Can a Press and distribution deal still work in 2020?
That’s the million-dollar question or should I say million rand question (I’m in South Africa after all).
The music industry has changed and it’s no longer the same.
Digital distribution is the way to go. However, in South Africa, some Independent music retailers are still in business, so there’s still a market for physical products.
Depending on the genre of music that you put out, a press and distribution deal might make sense. But most labels incorporate some sort of a 360 deal. What I mean by that is the label would prefer to sign an artist a record and management deal too.
They pay for everything but recoup most of their money from live performances. That’s how the label stays in business.
Should physical sales reach Gold, platinum or multi-platinum status, it will all be worth it. But if not, you could end up losing a lot of money. The press and distribution deal is not for everyone so you really have to know your market well and numbers.
I just took you through the basics of a press and distribution deal. And as you can see it requires funding and resources in order to work. Depending on your location, genre and market it may or may not work for you in this day and age.
If you have any questions, opinions and thoughts, please comment below.