Music distribution is pivotal in getting an artist’s music to listeners.
This article will provide an in-depth look at what music distribution deals entail, their ongoing relevance, the key components of distribution agreements, and factors artists should weigh when evaluating them.
What is a Music Distribution Deal?
A music distribution deal is an agreement between a recording artist, record label, and distribution company.
It gives the distributor rights to distribute, promote, collect royalties, and generate revenue from the artist’s music.
Under a distribution deal, the artist still maintains ownership of their master recordings while granting the distributor a percentage of the royalties as payment for getting the music on digital retail and streaming platforms.
This allows artists to retain more control over their music rights than traditional record deals.
Distributors like AWAL operate such a percentage-based model.
On the other hand, distributors like Distrokid, Tunecore, etc., operate based on a prepaid model.
They charge you a fixed fee periodically for their service without taking any share from your royalty. So you keep 100% of the distribution royalty.
The Evolution of Music Distribution
To fully understand modern distribution deals, you must learn about music distribution’s evolution over recent decades.
Traditionally, major record labels handled all aspects of the distribution process for an artist.
They controlled manufacturing vinyl albums and cassette tapes, partnered with physical record stores to get music on shelves, and took a hefty percentage of profits.
Some pioneering artists like Master P forged direct distribution deals with record stores, maintaining more ownership while utilizing the label’s distribution channels.
This landscape shifted dramatically in the early 2000s with the rise of digital music distribution.
Creating the MP3 file and launching iTunes allowed fans to purchase and download digital music for the first time. This took power away from major labels.
Then, the advent of streaming platforms like Spotify revolutionized distribution by allowing instant access to music online.
Fans no longer had to buy physical albums or digital downloads. The subscription-based or freemium model became the norm.
The ability to directly distribute music digitally to fans opened up significant opportunities for independent artists without label support.
This laid the foundation for modern-day artists like Chance the Rapper and Russ, who have embraced the independent route and achieved remarkable outcomes.
These artists have challenged the status quo and demonstrated that true independence is attainable without sacrificing revenue to traditional distribution models.
The Digital Revolution
In this new digital era, companies like CD Baby, Distrokid, Tunecore, etc., emerged to offer music distribution services.
These digital distributors aggregate music from various artists and facilitate delivering it to major streaming platforms, digital retailers, and music services.
This digital shift eliminates the need for costly manufacturing and distribution deals.
However, many still provide additional promotional services like pitching songs to popular playlists, marketing campaigns, etc.
So, while the specifics have changed, distribution deals remain as vital as ever in the streaming age for getting music to listeners.
Despite the accessibility of modern digital distribution, some artists are still drawn to traditional distribution deals.
These deals promise exposure, promotion, and the allure of industry validation.
This is untrue, and you must look beyond the surface to understand the dynamics at play.
Why do Distribution Deals Remain Relevant?
For several reasons, distribution deals remain essential for artists in the modern digital era.
Firstly, distributors provide access to all major streaming platforms and digital retailers that would be difficult for artists to reach independently.
They handle the complex process of ingesting music across platforms like Spotify, Apple Music, Amazon Music, YouTube Music, TikTok, Instagram Reels, etc.
Artists would struggle to upload and manage their music across each platform individually.
Secondly, distributors leverage industry connections and establish relationships with digital streaming services that artists lack.
This makes it easier to elevate music on influential playlists, land feature spots on platform homepages, and receive other visibility boosts.
Next, many distributors offer valuable marketing resources and assistance.
This can include pitching songs to playlists, managing social media campaigns, providing streaming data and sales analytics, and executing other promotional efforts.
Independent artists often lack these skills and connections.
Also, distribution deals provide new funding opportunities through financial advances paid to the artist.
This capital can fund recording costs, music videos, touring, marketing, and other investments to boost a music career.
Finally, distributors handle the complex logistical lift of delivering music to digital platforms worldwide.
This convenience allows artists to focus on creativity rather than distribution administration.
How Modern Distribution Deals Work?
Modern distribution deals are heavily focused on the digital side of distribution as it’s affordable and doesn’t need complex logistics management as there’s no physical distribution involved.
So unlike in the olden days, today, these distributors don’t have to invest much to get your music out there.
Unfortunately, most modern distributors still use the contract clauses formulated for traditional distribution to get a piece of the artists’ royalty-pie without offering any perks.
Today, physical distribution is reserved for top artists or artists with a huge bank to break.
Modern distribution deals usually last one or more years in length.
Shorter-term deals allow flexibility to change distributors or go fully independent. But longer terms offer the benefit of larger upfront financial advances.
The distributor earns payment through a percentage commission on any revenues generated.
Commission rates range from 10% on the low end to 30% or more for more extensive service packages.
The specifics depend on the level of funding and support services included.
Speaking of services, distributors offer varying bundles beyond just distribution.
Some focus solely on distribution administration, while others provide full marketing, promotions, and radio servicing.
Artists should assess the services they need.
Smart artists negotiate to retain approval rights and creative control as much as possible.
This includes authority over music rights, release timing, and other critical decisions.
Don’t sign away all your power.
Deals may be exclusive or non-exclusive.
Exclusive distribution agreements restrict artists from working with other distributors during the contract term. Nonexclusive deals offer more flexibility.
Contracts also generally contain termination clauses that allow either party to end the agreement early if certain conditions are not met.
Common reasons include non-performance, like failure to promote the artist’s music adequately.
Looking deeper at the legal aspects, distribution contracts contain several important clauses artists should fully understand:
Territories
This defines the physical territories, geographical markets, and digital platforms the distributor will be responsible for delivering the artist’s music.
Wider reach is better, so global territories are ideal.
Payment Schedule
Outlines when, how, and what payment details for all money exchanged.
This includes release schedules and processes for royalties, advances, commissions, reimbursements, etc.
Frequent and transparent payment structures prevent future conflicts.
Reporting & Accounting
Requires the distributor to provide regular royalty statements and accounting.
This reporting should clarify streaming revenue, downloads, physical sales, deductions, and other financial details to create transparency.
Indemnification
A standard legal clause whereby the artist and distributor each agree to handle liabilities relating to their actions under the contract.
Assignment
Limits the distributor’s ability to transfer or sell rights granted under the agreement to another party without artist approval.
Prevent distributors from handing over your deal.
Music Rights
It confirms the artist retains full copyright ownership and creative control over their music rights.
Don’t let distributors take ownership.
Factors You Should Consider
Looking beyond the contract terms, there are several vital factors you as an artist should consider when evaluating distribution deals:
Business knowledge – Understanding rights management, royalty structures, accounting practices, and other financial elements of the music business is highly beneficial when negotiating and leveraging these deals.
Digital, physical, or both? – Most artists’ distribution needs can be fulfilled by a digital distribution deal, which is very common. But if you want to sell vinyl or tape, ensure your deal covers physical distribution as well.
Financial projections – Artists should map out expected costs and model potential earnings from the deal to assess possible return on investment. Gauge the budget.
Marketing needs – Determine if the distributor’s promotional services and marketing support provide real value compared to going fully independent.
Target platforms – Ensure the distributor covers niche platforms important to your audience, like BeatStars or SoundCloud.
Ideal level of control – Structure the deal to retain the rights, approvals, and creative control that allow you to execute your vision.
Team support – Having experienced advisors and legal guidance can help immensely in navigating the deal.
Artistic intuition – As with any partnership, follow your gut instinct in whether the distributor is the right ally for your music.
Final Thoughts
In the modern streaming-centric music landscape, digital distribution remains as important as traditional physical distribution for breaking through the noise.
While the specifics of these deals have evolved with the digital revolution, their core function of getting music to fans has not.
By understanding the role distributors play, how deals are structured, and key contract terms, you can better navigate today’s music distribution environment as an artist.
(Learn about different types of music contracts)
Frequently Asked Questions
What is a marketing and distribution deal?
A marketing and distribution deal is an agreement where an artist grants the company rights to distribute, promote, and sell their music in exchange for upfront funding, marketing support, and access to the company’s retail and streaming platform connections. The company earns a commission on revenue generated.
How can I get a distribution deal?
To get a distribution deal, demonstrate your fanbase traction and pitch yourself directly to distributors. For a major record label distribution deal, get representation, grow your audience substantially with releases, perform live, and leverage your team to get in front of A&R executives and negotiate an agreement.