In this post we will discuss what a music distributor is, what they actually do for you, and how they make money. We then breakdown the different types of distribution available and review the distribution companies available to you. And finally give you some real world examples of the distribution deals we have done.
Your distributor makes up an essential part of your record label setup so it’s important to spend enough time reviewing and choosing the different options available to you.
Ari Herstand has written a great article about the different types and it's worth checking out, however it's always smart to get a second opinion 🙂
Having access to all these reviews can be overwhelming, which is why we created a handy 'distribution picker' tool to help you decide which is best for you after answering a series of questions.
In a nutshell, music distribution is taking your final mastered song and artwork files and ingesting them into a system that then distributes them to all of the music stores; Spotify, iTunes, Amazon, Google, Deezer, where the music is downloaded or streamed by music fans.
The distributor then collect the music royalties from all of these stores as well as sales reports and sends these to you every month. There is an approximate delay of about 3 months from when a sale or stream is made to when you receive the sales reports and royalty money.
As each store requires different formats for content delivery and different software for reporting sales, distributors have often developed software systems to automate the process and this is what usually sets them apart from each other.
Every record label has a distributor of some sort that they work with, as you can't simply upload your music directly to Amazon, iTunes, or Google play. Spotify is trialing artists directly uploading to the platform, but only with select artists and it’s not public yet. (as of this post date)
It is important to note that a distributor is not a record label and does not own your music or copyrights. They may offer ‘label services’ but that does not mean it's a label deal. They provide a service and take a fee or percentage from your revenue for doing so.
Distributors make money in one of two ways. They either charge a fee for uploading and distributing each release to the stores, or they take a commission on your music revenue. Typically the larger and more established distributors that have bigger labels and artists as clients will use the commission model. Some will also offer a combination of the two, and others will offer extra services such as marketing or specialists store uploads.
Some distributors offer deals where they manufacture actual products and distribute these to the physical music stores (that still exist!). Triple V in the Netherlands is a good example of this. If they believe a track has enough of a buzz they will press up 500-1000 copies of vinyl and distribute these to stores around the world. The margins are so low that the cost of manufacturing pretty much covers the profits, so you may only get a bit of pocket change, but it is nice to have your music pressed on vinyl – and looks cool hanging on your wall.
But let's concentrate on digital distribution, as that's where 99% of your sales will come from. Once established you can always look into someone that will do your vinyl, or you can do it yourself. (More on that later...)
I'm going to briefly talk about the differences between the main types of distribution companies.
An aggregator amasses hundreds of digital platforms under one roof and is the largest of digital music distributors. The Orchard is a good example of an aggregator. They have direct links to the major online music stores database and back-end systems like iTunes, Amazon and Spotify and provide quality control for the stores.
Often smaller distributors will actually plug into these bigger aggregators as well and use them on the back-end to handle digital distribution of their own content.
Some distributors offer other extras that help with running a label, especially in the electronic world. They offer DJ emailing services for promo, built-in accounting, and the good ones will be there to answer any questions you have when you’re confused or there is an issue with a release in a store.
These types of distributors offer what they call 'label services' or 'label management' where for a higher commission they can do all the admin ‘heavy lifting’ for you. Examples of these are Believe Digital, Ingrooves, and AWAL, and they all have worldwide offices in the UK and the US along with marketing teams inside the company that can help with promoting your bigger releases, or albums. They often work with very established and older acts that were signed to a major label in the past and now want to release their own music with a team around them.
These serviced distributors will have an application process so this is where having your business plan comes in handy. When you apply you will give them your business plan along with what your first 3 releases will be, and how you will do promotion etc.
Often after you have achieved some success as a self-distributed label, these companies will reach out to you, as they will recognize the value in your catalogue.
All service distributors take a % of your sales and typically this will be anything from 15-30%. Usually it's toward the higher end if you’re starting out, and once your sales get higher they normally lower the %. Another bonus is that they don’t change upfront fees.
Bear in mind that while they take a % of the sales this means it is in their interest for your music to do well as the more sales you make the more money they also make. Contrast this with a self-distribution service that charges an upfront fee, but has no financial interest in your music selling well.
If you are going to be predominantly an electronic record label then there are specialist distribution companies that focus on electronic music and have a good relationship with Beatport and can help you get a label account there. The major players to consider are FUGA, Label Engine, Label-Worx, and Symphonic.
With self-distribution, you get a very simple no-frills distribution service and they won’t provide any marketing support or extra accounting or promotion services, and they usually charge a flat fee to distribute your music.
While they do charge an upfront fee there is usually a very low or no commission % taken from your royalties. Companies such as DistroKid, CD Baby, and Tunecore are examples of this type of distributor.
There is usually no application process to use this type of distribution. As long as your material is inoffensive, you can upload any music and artwork and have it distributed on 95% of the digital stores.
These are great options when starting out due to the low cost of distribution. While they offer very limited support this won't be an issue, as you will have the support of The Label Machine to guide you through the releases.
These companies are also usually focused on individual artists that want to sell their own music directly without a major record label. When you create a release on a distribution platform you have to list a record label, at which point an artist without a record label lists themselves as the record label, for example Jonny Rotten Records. This is why even if you choose to sell only your own music, to do this successfully you still need to build a structure around you.
The structure you would build is essentially what a record label is.
Unfortunately there is no ultimate distributor to choose as it depends on your label goals and current situation but as mentioned earlier we have created a distribution picker tool that will narrow it down for you to find the best option.
Below is a list of all the major distributors available to indie record labels. For real world deal examples for record labels we have set up CLICK HERE to jump down and read more.
A new and interesting distribution start-up, which uses data analysis to find award-winning artists. There are zero fees or commission as they use the data as a type of A&R to select artists doing well that they will offer a label deal too.
Very established and was the first self-distribution company that allowed anyone to distribute to iTunes. They are leading the way in covering all royalty channels for artists. I have used them myself for music compilations, as it’s a very streamlined service.
A tech-driven, and forward-thinking, slick, no-frills company. I use them for most digital releases and you use just one page to distribute your album or single. In the last 5 years DistroKid has gone on to be in the top 20 distributors of the world. They also offer payment splitting, however each artist or remixer needs to signup for a $19/year account. They are Spotify’s officially preferred distributor for artists too. https://artists.spotify.com/guide/your-music
International company with offices in Moscow, Dubai, and London. They offer extra services like mastering and marketing, which is how they make their money. They offer language support for Spanish, Portuguese and Russian.
I had the pleasure of being on a UK music trade mission to India with the CEO of Horus music a few years ago. They were on the mission as they were looking to expand into the Asia and China markets. And the trip has clearly paid off as they have got great penetration in these growing markets.
These guys were first known as an auto mastering service that actually delivered great results. We used them on a couple of EDM tunes and it turned out great. They now offer distribution to the top digital stores and can also handle the licensing admin for cover songs.
Claim to have the largest distribution channel on the world covering 140 countries. They haven't had any major success stories, despite claiming to have links to major record labels.
This distribution company is based in the US and has the largest market share for indie labels in Label America. They are one of YouTube’s fastest-growing multi-channel networks (MCNs) with over 3 billion plays per month.
While not the biggest of operations compared to other distributors here, they have focused on the Asian and Chinese markets and claim to cover 95% of the world's music market over 193 countries.
This company is focused towards YouTube creators and video game music composers and has a limited number of platforms. They are great at splitting royalties between creators of a project and have an offer on one of the best independent mechanical licensing services, which is great if you plan to do a lot of covers.
These guys have been around as long as CD-Baby and were the original distribution company we used for Never Say Die Records. Since then have been bought by Believe Digital. They have great reporting, and Tunecore Publishing is great for tracking down songwriter royalties too.
The types of distributors can offer what they call 'label services' or 'label management' where for a higher commission can do all the admin heavy lifting for you. They typically work on a commision and there is an application process to work with them.
These guys are owned by Kobalt publishing, who are a very transparent, forward thinking, tech-focused publisher who don't own any of the artists publishing. AWAL is thus very transparent and offers some of the best analytics and data reporting in the industry. Because of this, they can see if an artist is getting traction in the industry and can offer playlist and physical distribution possibilities.
We used Believe Music after being courted by them at ADE (Amsterdam Dance Event) and had a great experience with them. They are one of the biggest independent distributors out there and have a great marketing strategy teams and YouTube monetization services. They also have strong sync licensing teams and can broker partnership deals with brands.
Ingrooves are a full artist and label service company on par with Believe Digital. We have used InGrooves for the last few years as a label distributor and they have been great for placing banners on the specialist music stores such as Beatport. They also offer publishing rights management.
Originally started to help Youtube creators claim payments and even splits between collaborators, Stem evolved into a full-blown music distributor. Their payment splitting is their strong point and probably the best for an independent distributor. You have to agree to splits with everyone on the record before they will distribute you. Frank Ocean and DJ Jazzy Jeff are clients.
These labels will distribute your music to electronic music specialists Beatport, Juno, and TrackItDown.
They offer DJ emailing services for promo, built-in accounting, and the good ones will be there to answer any questions you have when you’re confused or there is an issue with a release in a store. Due to the specialist nature of these companies, you need to apply to each of them for distribution.
FUGA is the worlds biggest electronic dance distributor. Founded in 2006, they have gone on to expand into the US and look to become one of the largest independent distributors connected to over 260 digital platforms. They have many label service tools aimed at electronic labels such as DJ promo and royalty management.
Label Engine was originally focused on helping electronic record labels easily import sales data from distributors and calculate complicated splits across tracks that had multiple collaborators and remix fees. We have used Label Engine for our royalty accounting for many years, and since we joined they have grown into a full-service digital distributors. They offer DJ promo tools, and auto video creation and uploading to YouTube of your tracks.
Launched in 2006, Label Worx offers a Label Management System (LMS) that covers the various aspects for distributing your music to electronic platforms. They offer DJ promo tools, mastering services and a demo submission solution called Promo Worx. They also have a royalty accounting software solution that is designed to work for specialist electronic labels.
The company was founded in 2006 and has grown to be one of the big indie distributors that offer PR marketing, plugging, music video distribution and advances for artists that gain traction. As well as a straight 15% commission, artists and labels can also negotiate a tailored deal as a dedicated partnership.
Triple Vision are one of the leading independent distributors in Europe that specialise in bass heavy electronic music such as drum and bass. They have an extensive vinyl distribution network and can offer P&D deals for labels that get good traction.
So, let’s head to storytelling time so you can hear some real world examples of my experiences with the different options, and how they panned out.
When I started my first record label we had a solid first release, and via some connections in the music world, we managed to get a Beatport Label account. That was the important one for us back in 2010. Now, we still had to get distribution to the other platforms - iTunes, Spotify, Amazon.
After researching the options available I went with Tunecore. It was $50 a year for a release (you could buy up to 3 years for an extra $30) and we kept 100% of the royalties. Now $50 / year per release might sound like it will get expensive when you are up to 20 releases in a year ($1000+).
However, consider this; we had a couple of tracks that were making about $80,000 a year when they peaked. Had we been with a distributor - 15% on $80,000 is $12,000. Suddenly that $1000 a year didn't seem so much!
When we started getting a bit of a name the distribution offers came knocking, and we met with bunch of companies but ultimately they couldn't really offer us much. The rate we were on with Tunecore effectively worked out at 2%, and the lowest any distribution company went to was 15% so we stayed with Tunecore and our direct deal with Beatport.
However, after 4 years with Tunecore we moved to Label Engine. Why? When we started out I did all the royalty accounting on spreadsheets. After the 10th release it was getting very tricky balancing everything out. Especially as in the electronic world you have remixes splits on EPs and tracks and maintaining this is a lot of hard work. We then discovered DJ Lazy Rich's platform Label Engine – which basically handled all the accounting for you. You upload the sales sheets, create a template for how the release sales were divided up between label, artist and remixes, and every 6 months it would tell us who was owed what, and really helpfully would even send statements to the artists if requested.
So we moved to this system, then after a few years the Label Engine also started to support distribution and after a long courtship in which they ended up giving us a very favourable distribution deal we decided to move all of our distribution to one place.
When we started the next couple of record labels we decided to go with more traditional bigger indie distribution companies. We chose Ingrooves for the second record label and Believe Digital for the third record label. The idea was to see how each of them worked and if the 15% they took make a difference.
Advantages of using a distributor like this is that you will have a label representative that oversees your label and you can contact to answer any questions or problems that may arise with your releases or distribution. They also offered a lot of extra services as mentioned earlier which was great when starting a new label.
The label representative will usually have an internal team that talk to the major platform stores, for example Beatport, and they will submit your press releases directly to them, which can increase your chance of being featured in playlists and genre banners.
Another label we started, we went with Triple V in Netherlands. These guys gave us a very favourable percentage on the distribution fee as well as offering a P&D deal for vinyl manufacturing. They also handle the distribution for a lot of the top drum and bass labels and as Get Hype Records was going to be a predominantly drum and bass label it made sense to go with them.
A great strategy I would suggest is to go for self-distribution via Distrokid and then as you build up your catalogue, approach one of the more specialist distributors such as InGrooves that offer extra services for a percentage of revenue. Backed with a solid business plan, and evidence of successfully releasing music you will have an easier time having a successful application.
If you are releasing electronic music and getting on the Beatport charts is important to you then apply to Label-Engine or Label Worx with a solid business plan, which includes your first three releases planned.