Music Distribution Deals: Facts You Need to Know Before You Sign
With the ever-increasing progression of music technology over the past decade, mainland CD stores continue to lose popularity as the modern demand for digital music downloads continues to further crush them in the archives of history. With over half of the world’s music buying audience, digital music distribution is the predominant method of music marketing the world offers us today.
More and more musicians are appearing on the stage with highly polished albums, mostly produced entirely on their own. They have become singular empires full of resources, with exclusive rights and authenticity as unrestricted producers and marketers of their own products. These musicians are ready to take the world by storm by partnering with one of the many distribution companies available today.
But as an independent musician, what are you really committing to in a distribution deal?
Many digital distributors offer musicians the opportunity to have their music available on many of the popular and well-regarded music vendors; Apple iTunes is one of the most popular playgrounds for today’s music consumers. But while they may promise to get your music on the right track, how will it rank among the billions of other artists vying for sales? Consider that most mainstream artists have far more dollars invested in their advertising and marketing personas than the unsigned musician could afford. Big acts are funded by deep pockets that guarantee the best sales opportunity.
One response to this is that many unsigned musicians feel that having their music available alongside mainstream artists is a boost to their credibility, giving them and their music much greater distinction. It is certain that a good deal can give your music a triumphant victory if it manages to populate old music sales sites. Your only goal afterward is to actually make sales on them. Otherwise, what is the purpose after all?
Offers, terms, and conditions vary from company to company, so it pays to shop around and research what type of distribution method is right for you. There are many good deals, and probably just as many scams, circulating on the information highway.
If you are considering accepting a distributorship agreement, before signing the dotted line it is important to ask questions such as:
o Does the agreement include advertising or promotional benefits for the artist?
o Are there any payments I must make, statutory, group or otherwise?
o What percentage of royalties will I receive and how are payments handled?
o Can you provide me with an estimate of how profitable your distribution methods are?
o What are my rights when terminating the contract?
o Am I solely responsible for tax returns on my net income?
Other things to check before signing are the ‘exclusivity’ terms. These could greatly inhibit your freedom. Does a deal involve licensing your music digitally (through preferred online formats) or does the deal also include physical sales? Some are very exclusive in nature, while others give you rights to continue marketing your music through other channels.
Please note that many reputable and authorized distributors, such as CDBaby, will not allow an artist to exploit other distribution channels, as both parties risk putting their music on the exact same sites. A nuisance that major retailers and distributors can do without, and an understandable clause too.
You should read the terms of an agreement in their entirety. It is absolutely essential that you fully understand what is expected of you and what is offered to you!
Here is an example warning:
A music distribution site is currently offering an agreement for the sale of both digital and physical music (the terms of the agreement are publicly available for download on the site).
The site seems to charge $99.99 as a one-time payment. However, when checking their terms of agreement, it states:
“After one year of promotion, we may archive, delete and/or suspend your Works from the Service without terminating this Agreement.”
So what if the agreement is still in effect but your work is no longer available on your site?
“You may pay an annual fee, to be determined, to ensure that your Materials are not archived, but instead displayed and offered for sale after the first year of Service.”
So if you refuse to pay this annual fee, the site still has all the rights to license and sell your music as expressed in the agreement you already signed!
This isn’t necessarily bad, but is it what you want? Always check the fine print and read any agreement carefully. As a general rule, be wary of sites that ask you to pay to distribute your music. On the basis that a site’s marketing strategies were successful and they believe your music is good enough to make a profit, why would they ask you to pay them upfront? Suffice to say that not all sites that solicit payment from an artist provide subpar service. Talk to other artists whose music is getting syndicated and see how they’re doing well. If something doesn’t sound quite right on any deal, check with the dealer. If you still receive an insufficient response, you can always seek a legal opinion. But if you’re really in doubt, maybe it’s best not to!
If you’re marketing your music through a label, you should be looking after your interests sufficiently. A reputable label that ensures that all terms in a distribution environment are clear and fair to all parties involved. Being part of an honest label is often a good way to free yourself from some of the finer pressures associated with straightforward schemes. Of course, they’ll also expect a cut of the profits, but they’ll often have a fair degree of interest in maintaining their own artists’ affairs properly. If the artist is happy, the label thrives on its good reputation and its integrity towards its artists.
Despite the odds, sales margins have increased for thousands of unsigned musicians, simply because of the greater variety of marketing media available. You can not only market your music yourself, but also allow others to do it for you. The more places your music is available, the better your chances of achieving sales. But as with any undertaking, money and profit are the primary goal and therefore you should proceed with caution before handing over your personal work to anyone.
There are many reputable dealers out there, who promise to do the job and actually deliver what they say. But, like everything in life, there are people you’d rather not get involved with. Therefore, do as much research as possible and ask as many questions as you see fit. After all, a year is a long time to get stuck in a deal that you later realized isn’t working for you! A bad deal would not only cause you a lot of frustration at your limitations, but it could also undermine your confidence to engage in future marketing opportunities.