How did the music industry get so complicated? How can an artist be aware of what’s happening all over the digital streaming sphere? So many platforms & so many data points to track. Although the complexity – digital distribution is actually something we should be thankful for.
Not too long ago, physical stores were Spotify and Apple Music of the world. Distributing an album to a “Tower Records” shop, would not help your music much. It is about getting discovered and doing proper campaigns to stand out.
A distributors job is to make sure an artist’s music fits store requirements, and pay you back artist royalties. As complicated and non-transparent as it may seem, we’re actually in an era where an artist can both deliver their music to the masses and also get paid from one place.
When choosing a distributor it would be recommended to take into account the following considerations
Stores & Streaming Services a Distributor Submits To
Which stores (DSPs) does your distributor work with? Different distributors have connections with different DSPs. Yes, it is amazing to be on every streaming platform out there, but focusing on a few big ones can be more rewarding.
We have complied a list of the top 10 streaming services by subscribers in 2019 statistics. FYI IndieFlow’s platform distributes to all these streaming platforms with 100% of the royalties going back to the artists:
1. Spotify: 124 Million Subscribers
2. Apple Music: 60 Million Subscribers
3. Amazon Music: 55 Million Subscribers
4. Tencent Music: 35 Million Subscribers
5. YouTube Music: 20 Million Subscribers
6. Deezer: 7 Million Subscribers
7. SoundCloud: 175 Million Users (No subscriber data available)
8. Pandora: 6.2 Million Subscribers
9. Tidal: 3 Million Subscribers
10. Gaana: 1 Million Subscribers
Royalties & Pay Outs
As these royalties most likely won’t pay the rent (at least in 2020), you must be aware of two things:
How are your royalties provided and how often are they given to you?
Direct distributors often have the availability to receive payouts after a certain amount of funds ($5-50) are collected from the streaming services. These funds are usually distributed to your bank account.
Another useful stat here would be the average royalty per play on each one of the different channels. It is an interesting stat as the leading streaming service (Spotify) is actually not the top payer in terms of royalties to artists:
Here are the top 9 payers- their average payout per track and for comparison purposes the number of tracks needed to hit ~$1,500 in royalties:
1. Napster: $0.019 (Per Stream); 77,474 (Streams Needed to Reach $1,500)
2. Tidal: $0.012 (Per Stream); 177,604 (Streams Needed to Reach $1,500)
3. Apple Music: $0.007 (Per Stream); 200,272 (Streams Needed to Reach $1,500)
4. Google Play: $0.0067 (Per Stream); 217,752 (Streams Needed to Reach $1,500)
5. Deezer: $0.0064 (Per Stream); 230,000 (Streams Needed to Reach $1,500)
6. Spotify: $0.0043 (Per Stream); 336,842 (Streams Needed to Reach $1,500)
7. Amazon: $0.004 (Per Stream); 366,169 (Streams Needed to Reach $1,500)
8. Pandora: $0.001 (Per Stream); 1,106,767 (Streams Needed to Reach $1,500)
9. YouTube: $0.0006 (Per Stream); 2,133,133 (Streams Needed to Reach $1,500)
Costs, Exclusivity & Length of Deal
Cost, exclusivity and length of deal vary depending on which distribution route you choose to take.
Distributing completely independently through online services or software:
(IndieFlow, Distrokid, CD Baby, TubeCore & other independent distributors).
The costs for these services vary from (0-10% of commission on royalties) to subscription costs or just a general cost per track distribution.
No exclusivity is required here and there is no minimum deal length)
Distributing semi independently:
Services such as AWAL offer semi independent services. AWAL has gone the semi label route – where they choose the artists they would like to distribute, offer them a cash advance & ask for a higher % of royalties (can be the ballpark of 20-30%).
They offer exit points upon payback of the cash advance.
*Information above should be verified with services and is not based upon sources and dependent on artist.
Distribution through a label:
The old fashioned label route is the “traditional” way of getting your music on the streaming platforms. It is worth noting that for the sake of uploading to the streaming services many of the labels utilize online services described above.
Labels can ask for contracts giving them up to 50-70% of royalties and will ask for exclusivity.
Labels do offer networking, PR and services that are not in the scope of digital distribution.
A Distributor’s Support Team
Is there someone to talk to on the other side? There may be all kinds of terms you’re not aware of, questions you may have or corrections you need to make even post release.
“What is an ISRC code?”
“I can’t find my profile on one of the stores”.
“How do I transfer my track from one service to another”
In many cases , because the stores are in direct contact with the distributors and not with the artists themselves, you need a good support team to back you up on a rainy day!