Music Distribution Companies: Who Is Worth Using, And How Much Will You Make!

Im not too sure if this article will apply to the majority of our readers, but I thought I would run through a list of music distribution companies and work out who is worth using and who is not. All these companies are digital distribution companies, so they take music from artists all over the world and then distribute that music to the worlds largest online stores. All these companies take a cut for providing this service in some form or another.

We are also going to run through an example of how each site will work in terms of revenues for the artist. We will place 1 album per year for 2 years on each site. Each album will have 13 tracks. The artists actual sales were $0.99 per track and sold 1,000 tracks.

Cdbaby – Cdbaby is one of the old companies in this market and they provide some great services, even though the website they use seems to be outdated approx 5 years ago. The prices are as follows:

Setup: $35 one time fee

Cut for Distributor: 9% of all income

Partners: You dont have a choice at which online stores your music goes to, except for a very small list of selected retailers. The Cdbaby service is completely non-exclusive and doesnt tie up any of your rights. Their distribution partners include iTunes, eMusic, Hear Music, Last.fm, MusicNet, Napster, Rhapsody and others.

Example: The artist has to pay $35 upfront for first album and then another $35 for second album, totally $75 in initial outlay. Sales would be $0.99 x 1000 tracks sold, which equals $990, and the artist would receive $900.90. Profit equals $900.90 less $75 costs = $825.90

Tunecore – Tunecore is the new player on the block who has been getting a lot of press attention for their business model, while at the same time they have been signing some very big album distribution deals.

Setup: $19.98 Per Album Per Year Storage. Plus $0.99 per store per album. Plus $0.99 per track.

Cut for Distributor: Nothing in terms of income

Partners: The choice is yours, you can send your music to one or all of their partners. Partners include, iTunes, Amazon, Lala, Napster, Rhapsody, Music.com, eMusic and GroupieTunes.

Example: Costs would equal $19.98 x 2 for two years ($59.94), plus $0.99 per album for 5 stores ($9.90), plus 13 tracks on both albums at $0.99 each (25.74). Overall costs equal $95.58. Profit equals $990 less $95.58 in costs = $894.42

The Orchard – The Orchard is currently one of the worlds largest online distributors, they have over 350 retails partners in a variety of areas. Im not going to run through their sections because they are very straight forward. The Orchard as far as Im aware dont charge for inclusion into their catalogue, they also have a huge list of retail partners, but the big down side is that they are known for taking a very large percentage cut. Plus, everytime I rang them, I could never actually get to speak to a person with a little bit of intellegance that atually got back to me on time with information about what they can provide. The worst service I have seen in the industry.

RouteNote – RouteNote is the new player on the block. They have a very basic distribution model and a growing list of retail partners. Since they are new on the block they dont have as many retail partners as their rivals, but look for this to grow.

Setup: Free

Cut for Distributor: 10% of income

Partners: The choice is yours, you can send your music to one or all of their partners. Partners include, iTunes,  eMusic, Limewire and Audio Lunchbox. They are also in talks with Amazon and Rhapsody to add their options to the RouteNote service.

Example:$990 is sales and the artist would receive = $891 (with no upfront costs)

After this analysis it shows that Tunecore is the best option for artists to retain the most revenues. However, that being said the artist will have to pay a cost of $95.58 upfront and tasks the risk of having to make sure they sell 1000 tracks to make the correct money. RouteNote is a new service but the results speak for themselves. Their service brings is nearly as much money as Tunecore, but the artist doesnt have to pay anything upfront at all!

Disclosure – Im currently CEO of Insomnia Ltd which owns RouteNote.

Tags: digital distribution itunes music routenote tunecore