Digital Music distributors are in the business of helping unsigned artists and labels to get their music to the end-user.
But in this day and age you’re spoilt for choice because if you can search online you will come across countless of music distribution services.
All these digital music distributors have different policies so that means as a label you shouldn’t be too quick to just sign up with anyone.
This blog post will give you an idea of some of the key things that you should look out for.
Let’s get started then.
1. “Free” or Paid Service
One of things that you should look for in a distributor is whether or not they require a payment for each release that you put out.
For example I know that companies such as a CDBaby, TuneCore and MusicAfrica (in South Africa) require a small fee in order to release your single, EP or album – Nothing wrong with that because they are in business.
Most of these companies allow you to keep 100% of the royalties though.
Sounds good doesn’t it?
It sounds like a good deal if you have already built up a Fan base or followers. Because once you release your project then you can expect your followers to buy your music.
Without followers you might be wasting your time and money. So then what do you do?
You can look for a digital music distributor which can offer a free service. In most cases there is no pressure to release anything until your products are ready and delivered for purchase.
What I’m trying to say is that you can get the distribution deal without paying any money upfront with companies such as Label Worx and Symphonic Distribution.
2. Exclusive or Non-Exclusive deal
Before signing an agreement with a digital music distributor, look for the “exclusive or non-exclusive clause”.
I’ll explain to you how this works.
An exclusive agreement means that your entire music catalogue would be controlled and distributed by one Distribution Company.
I’m not sure how many companies do this but this can turn out to be a bad deal because what if you’re not happy with their service?
On the other hand, a non-exclusive deal is more flexible and allows you to use a different distributor with each release.
3. Royalty Split
Most digital music distributors prefer you to pay them upfront (as mentioned earlier). They do so because there is no guarantee that they’ll make any money from your music sales.
Instead, they charge you for the service but if your music sells you will keep everything – All the royalties.
Some companies such as LabeWorx will deduct a certain percentage from each digital download and stream.
The typical royalty split (the last time I checked) is 85/15 in favour of the label/artist. But in order to get paid, your royalties should reach a minimum of 50 USD.
A good music distributor will send you a detailed sales statement every quarter (four times a year), whether your music is selling or not. But make sure that you get a detailed sales report on a regular basis.
4. Do they provide additional services?
Digital Music distributors (especially the market leaders) no longer rely on music sales as a primary source of revenue.
Let’s take a company such as CD Baby. If you visit their website you will notice that they offer a wide range of services such as following:
- Music Publishing Services
- Promotions (Podcasting, Online Radio)
- Video Monetization
- Pressing and physical distribution of CD’s
Although Label Worx doesn’t charge you a distribution fee, they offer other paid services such as:
- Mixing and mastering (They have highly experienced mastering engineers working in-house)
- Royalty management solution. It is a cloud-based accounting platform which you can use to manage your royalties from different sources.
- Promotion management. It is a service that you can use to promote your music before the release date. But you need to have a promo list first (contacts of people in the music industry and followers, etc.)
The barrier to entry in digital music is low and as result distributors are eager to sign-up Independent artists and labels.
You should take your time and know what you want from a deal -there is no one size fits all.
If I missed something, please do let me know by commenting below.