Music distribution’s major function is to make recorded music available to the public through various channels such as physical sales, digital downloads, and streaming services. Music distributors serve as go-betweens for music creators (artists, labels, and producers) and retailers or streaming services. They are in charge of distributing music to customers, ensuring that it is properly marketed and promoted, and collecting revenue on behalf of its music creators.
The primary role of distributors has remained unchanged for over a century, although their operating business models are constantly changing. These changes have had a huge impact on the music industry as a whole – from the “era of CDs” in the 2000s to the “era of streaming” that we enjoy today.
Before, physical purchases through record stores and other retailers were the primary means of music promotion. However, as digital music and streaming services have grown in popularity, the job of music distribution has expanded to include online distribution as well. Music distributors nowadays assist artists and labels in distributing their music to a global audience, making it easier for consumers to access and enjoy music from all over the world.
What Is Distribution?
Music distribution has a history as long as the music industry itself. In the past, even those who wrote sheet music used the services of printing scores and delivering them to shops. It was (and still is) the main function of distributors – to deliver music to stores. Music distributors assist musicians and record labels in getting their music into the hands of fans and consumers. They function as a mediator between the artist and music sellers, such as online music stores, streaming platforms, physical retailers, and radio stations, allowing the music to be distributed on a grander scale.
However, in modern times, with the development of the digital music industry, most distributors have evolved from supply chain managers to digital infrastructure providers and rights administrators.
Today not only mixing online is possible, but also independent distribution of your music production using web technologies. Making a song available to listeners around the world is as easy as uploading a file to the Internet. And yet, distributors are still needed. These distributors provide services such as music distribution, promotion, and royalty collecting. Companies may also offer tools and data for artists to monitor the popularity of their songs.
Additionally, music distributors’ roles have grown in importance in the digital age, as more and more music is consumed online rather than through traditional channels such as physical record stores. Working with a music distributor allows musicians to reach a larger audience and potentially enhance their earnings from their songs.
How Distribution Works?
Can’t a singer or composer do digital music distribution independently? In fact, independent distribution is possible, but it is far from always beneficial. Distributors are an important part of the record chain, taking on two main roles:
- distribution of releases;
- distribution of royalties;
In today’s digital environment, there is a well-oiled distribution mechanism aimed at making the release available:
- to all listeners;
- on all platforms;
- on the day of appearance.
Of course, there are direct platforms (DSPs) like Bandcamp or SoundCloud. They don’t need a distributor: set up an artist page, upload your music and you’re done. However, they represent only a fraction of the many digital distribution resources.
In addition, most DSPs do not allow direct royalty free music downloads, forcing the artist to go through distributors. DSPs would rather work with the distributor than directly with the author to relieve themselves of the hassle of non-standard metadata and payout distribution.
Even Apple will ask you to contact your distributor to make sure the release metadata meets platform requirements.
The second key role of the distributor is to distribute royalties due to copyright holders. As the music market went digital, direct offers to “bring a batch of CDs to the store and get paid” were replaced by flexible payouts. In the streaming world, music consumption and purchase are inseparable. Copyright holders now make money the very moment the user plays the music.
Calculating royalties in such an environment is extremely difficult. Imagine if Spotify, Amazon Music, or Apple had to pay these royalties directly to every artist across the platforms. Even if they manage to get all the metadata and bank details correctly, the administrative costs will go up. In addition, copyright holders themselves will not be thrilled to receive payment separately from each of the digital platforms.
Thus, distributors are filling this gap by acting as a sorting plant for royalties from the DSP to the copyright holders.
The two main roles of distributors are distributing the artist’s music and transferring royalties back to the copyright holders. However, this does not mean that all distributors stop there. In contrast, most players in the market have expanded their offerings far beyond these basic aggregation services, providing professional marketing of music products.
Distributors are well placed to negotiate with DSPs, so most of the trade marketing work rests on their shoulders. A team of artists (whether it be a record company or a management company) can determine the distribution strategy and approach to the playlist, but in 90% of cases it is the distributor who will implement this strategy in direct contact with the DSP.
How Distribution Has Changed?
In 2001, the recording industry was almost exclusively physical. Twenty years later, physical sales accounted for less than 1/4 of all global record revenues – with the share dropping to 10% for mature digital markets. This rule is not without exception, for example, the Japanese music market is still dominated by CD sales. However, by and large, the music industry has embraced the digital environment.
Music distribution has changed dramatically throughout the years, particularly since the introduction of digital technologies. Streaming has made the fragmented music market much more centralized. A handful of DSPs dominate the digital marketplace – and while some of the streaming giants are pushing their algorithms as intermediaries in finding music on the platform, the most popular playlists are still curated by the service’s editorial team.
In addition, here are a few direct examples of how music distribution has changed:
- Digital Distribution: Music distribution transitioned to digital platforms with the rise of the internet and digital technology. Music can be downloaded or streamed online via digital music distribution, making it easier for fans to access and exchange music.
- Streaming Services: Streaming services such as Spotify, Apple Music, and others have altered music distribution even more in recent years. Users can access millions of music through these sites for a monthly subscription or for free with advertising.
- Physical Media: Tangible media, such as vinyl records, cassette tapes, and CDs, were the first modes of music delivery. These physical media were sold at record stores, music stores, and other retail establishments.
- Social Media: Social media sites such as YouTube, TikTok, and Instagram have also played an important part in music dissemination. Numerous artists have earned success by sharing their songs and creating a fan base on social media channels.
- Direct-to-Fan: Another recent trend is direct-to-fan distribution. This strategy involves musicians selling their music directly to listeners through their own websites or platforms. This gives musicians more control over their music and allows them to make more money from sales.
The Future of Distribution
Because technology and consumer behaviors are continually evolving, it is hard to predict with precision what the future of music distribution will look like. A variety of technological and societal trends that are presently taking place are likely to impact the future of music distribution. The rise of streaming services has become the dominant way people listen to music, is one big trend that is certain to continue. As these services become more advanced, they may provide users with more tailored and interactive experiences that will cater to the listener’s personal preferences.
Streaming services will continue to take the market away from media (disks, flash drives) and finally take it away from the music hosting. This best music distribution will call into question the existence of music radio stations: they will have to master streaming, where they are traditionally not strong.
When looking for new ways to develop the music business, the importance of distributors as intermediaries between creativity and the music market will continue to grow.
The usage of virtual and augmented reality technology is another rising trend in music dissemination. Music distribution may become more immersive and interactive with the advent of virtual reality headsets and other AR/VR technologies.
Blockchain technology may possibly play a role in music distribution in the future. This technology provides a more transparent and secure method of distributing and monetizing music. It may allow artists to sell their music directly to listeners while receiving royalties in a more streamlined and effective manner.
As the music industry becomes more fragmented, with independent artists acquiring more power, music distribution networks may continue to divide. This could result in a more diverse environment of music distribution outlets, ranging from social media platforms to specialized streaming services.