Music Distribution Myth Artists should know

Before we get to the myth itself, let's break down how music distribution actually works. There are essentially three main types of distributors.

The Three Types of Music Distributors

1. Direct Distributors: Think of these as the powerhouses. They have long-standing, direct relationships with all the major digital streaming platforms (DSPs) like Spotify, Apple Music, and Amazon Music. They often work with major record labels or provide the backend technology for other distribution platforms. When you hear about a "distributor of distributors," this is who they're talking about.

2. White Label Distributors: These companies don't have their own direct connections to the DSPs. Instead, they partner with direct distributors, using their established infrastructure to run their own services. They're basically building their brand on top of another company's tech. These companies often work with larger independent labels, aggregators, or artists with a proven track record.

3. Aggregators: This is probably the most common type you, as independent artists, will encounter. Aggregators are the platforms that make it easy for you to get your music onto the major DSPs. They work with white label distributors (or sometimes direct distributors) to provide a user-friendly service for a massive number of artists.

Now, let's talk about the cold, hard numbers. Running a white label distribution company is no small feat. It can cost anywhere from $80,000 to $100,000 just for the initial setup. On top of that, there's a monthly service charge of $5,000 to $10,000, which often increases as the catalog grows. Then you have to factor in their commission, which can be anywhere from 5-10% of the total earnings. Once you add in salaries for staff, catalog management, marketing, and everything else, you're looking at an initial first-year cost of over $300,000 with an ongoing operational budget of at least $200,000 per year.

So, when I see a new DIY music distribution company pop up, promising artists 100% of their earnings for a small yearly fee like $19.99, I have to wonder: have you ever stopped to question how a brand in a multi-billion dollar industry can be so "generous"?

Here it is. The myth you need to stop believing: No distribution company gives you 100% of your earnings.

Even the DSPs themselves have a sharing ratio for earnings. So if you're not getting a piece of the pie, someone else is. That's the first thing I tell any artist or label that comes to me for consultation.

In our next session, we’ll talk about what you should be looking for when choosing a distribution company. Until then, have a great rest of your week and feel free to share your thoughts in the comments below.