Digital Distribution Deep Dive

Digital Distribution Deep Dive

Peace. What’s happening good people? What we’re going to do here is compare digital distributors, head to head by the most critical aspects. Understand that the below charts are based on numbers and not a matter of opinion. If you’d like to learn more about these distributors, consider buying the Guide to Digital Distribution Ebook.

Stores used to be a major selling point for digital distributors. They all seemed to highlight the number of stores that would receive your music. As more attention has gone to Spotify, due to their Playlists, and Apple Music, as a result of their explosive growth, number of stores hasn’t been used as much of a selling point. That doesn’t mean that it’s any less important. Spotify is only available in one country across the African Continent. Countries like Korea, China, and India all have their own major platforms consumers prefer.

Some of what are considered stores aren’t technically stores like Shazam or Verve Life. These won’t directly drive you sales but instead offer opportunities for exposure that could have an unmeasurable impact on sales. Ideally, you want your music everywhere someone might look for music and not doing so is highly likely to result in lost revenue. Because you can’t miss what you never had, you probably won’t notice. It’s kind of like that old forest adage, “if a tree falls in the woods…”

Number of Stores

Their previous releases are missing from Distrokid’s newly added stores like Facebook/Instagram, Anghami, and KKBox. They have to, first, be aware that there are even new stores available, then manually add all eleven of their releases to those stores.

Shazam: $0.99/Yr Per Release - Shazam is the number audio recognition service. It’s huge! People use it to identify songs in TV shows, playing from cars on the street, playing in restaurants, etc. If someone wants to identify your song, it’s highly likely they either intend to buy it, stream it, or investigate it. Not having your music in Shazam is a major loss of an opportunity to connect with new potential fans. Shazam is included by all of the top distributors at no additional cost.

Content ID: $4.95/Yr per single or $14.95/Yr per album + 20% of revenue - Content ID allows you to monetize your music on your Youtube channel if you haven’t reached the monetization threshold. Your music videos will be on your Youtube channel and without Content ID, you wouldn’t be able to earn revenue from them if you’re not in Youtube’s Partner Program. All of the top distributors provide Content ID with no upfront cost, instead, they all take a percentage of revenue.

Transaction fees: 2% of payments (never more than $2 per payment) - Percentage of revenue taken by the service providing payment transfers. Most distributors will provide you with a means of avoiding transaction fees, Distrokid doesn’t. Withdrawing $100 per month for a year with Distrokid would result in an additional charge of $24 per year for their service through transaction fees.

Pricing

It’s difficult to compare distributors with different pricing models against one another head to head. Instead, what I’m going to do, is show you the total cost of distribution as a percentage of revenue. No upfront distribution fee isn’t exactly free as most distributors that offer this, take a percentage of your revenue. Because you can’t compare a percentage to a flat fee without knowing the amount of revenue, it looks much cheaper than it may actually be. Also, there are hidden costs like transaction fees that can drive up the cost of using a distributor.

We’ll be including all services provided in order to make a fair comparison. Some distributors exclude essential services that are included in most other distribution plans like UPC and ISRC codes, Content ID, and your release being added to new stores. It would be unfair to compare less to more as though they were equals, so we won’t be doing that.

Our pricing chart imagines an artist withdrawing $100 per month for a year from the release of one album. In the case of distributors that charge a one time fee upfront, like CD Baby, that fee is being calculated as a recoupable cost. So, for distributors like CD Baby, it’s your revenue, minus the price you paid for distribution in year one.

1 Album | $100/Month withdrawn monthly. $1,200 Total Revenue

Revenue

In year one, you’d earn the most from Tunecore because you’d only be paying for the one album you released. With CD Baby, you’d have to earn back the cost of distribution and also pay 9% of your revenue. Distrokid charges a host of annual fees including transactions fees for essential services that drive up their annual costs. Emubands only charges a one time fee but has the highest per release fee of all the distributors listed here. They also charge transaction fees. Both RouteNote and Onerpm take 15% of your revenue which results in you losing more money as your income grows.

Now we’ll look at the cost of 2 albums in the 2nd year. The reason for this is to show what you’d be earning from your releases every year after the first year. The one time fee for a distributor like CD Baby would be recouped which would leave just their 9% fee.

2 Albums | $100/Month withdrawn monthly. $1,200 Total Revenue | 2nd year

Ditto would earned you the most here because they charge $19.99 for unlimited with no extra fees for essential services. They do charge transaction fees but it doesn’t appear to make much of a difference. In the case of Tunecore, you would now be being paying two separate annual fees of $49.99 for two albums. Distrokid’s extra fees result in a de-facto per release fee on top of the annual base fee they charge. Going beyond two albums, Distrokid becomes one of the least expensive distributors but still loses the title to Ditto. Also, if you were to make $100 from two releases, you’d end up only earning $0.02 from Tunecore.

Now we’ll look at the cost of 2 singles in the 2nd year after all initial fees have been recouped. Pricing for singles differs from pricing for albums so it’s worth a look.

2 Singles | $100/Month withdrawn monthly. $1,200 Total Revenue | 2nd year

$1.2K from 2 singles in the 2nd year

Tunecore wins again here because you’d only pay an annual fee of $19.98 for both singles and keep 100% of what you make outside of that. Unlike in the case of albums, Distrokid doesn’t become less expensive than Tunecore as you release more singles. All fees Distrokid charges for essential services are annual with the total annual fee per album coming to $32.89 and the annual fee per single coming to $13.89. So, with Distrokid, it would cost you an additional $13.89 per new single vs. Tunecore’s $9.99.

Content ID

All major distributors, outside of Ditto, take a percentage of revenue earned from Content ID. Let’s take a look at how distributors stack up as far as percentage of revenue from Content ID. The scenario here is $100 earned from the sale of one single or album.

Content ID comparison chart: $100 Earned | 1 Single | 1 Album

Content ID

Ditto is the clear winner here as the only company that allows you to keep 100% of the revenue you earn from Content ID. RouteNote is the winner up charging only 15% with Tunecore coming in 3rd with a fee of 20%. Distrokid charges an annual fee per release, per year plus 20% of revenue. CD Baby and Onerpm both take a whopping 30% of Content ID revenue.

More to Consider

Upside

Which distributors rewards you for exceptional performance? You’d like some kind of additional support in the event that your project does really well. It could be priority placement for your follow up release, marketing support in the form of actual playlist pitching, etc. but you’d like for your distributor to provide you with something!

Tunecore

Advances - Get advances on your royalties based on your sales performance. Only your Tunecore revenue will be put toward paying back your loan your income outside of that isn’t touched. You must be with Tunecore for at least two years before you’re eligible for Advances.

Pitching - Tunecore offers a form you can fill out and submit for priority placement in music stores and streaming platforms.

Ditto

Ditto Plus - Exceptional performance of a release on Ditto can get you upstreamed to Ditto Plus which is basically a management system. They offer marketing support in the form of PR, playlist pitching, and a bunch of other services in exchange for a percentage of revenue.

Onerpm

Label Services - Onerpm offers tremendous upside for artists that perform exceptionally well. They’ll help create music videos, do advertising, playlist pitching, pretty much everything you’d need to really make the most of your success.

Caveats

Ditto - Received negative reviews from artists claiming their royalties were stolen as a result of being banned for streaming fraud. As this Rolling Stone article highlights, Streaming fraud is a MAJOR problem that results in artists losing millions of dollars each year. Artists that engage in streaming fraud aren’t stealing from Spotify, they’re stealing from other artists. As a result of their activity, you’re probably getting paid less than what you should. Most distributors didn’t care about doing the right thing in this instance because of the possibility of customer complaints and loss of revenue, as many take a percentage of sales.

As streaming fraud has sparked greater concern, other distributors are also starting to crack down and Ditto now looks more forward thinking than their competitors by tackling the problem before they were forced to. You now see the same complaints hurled at Ditto being lobbied against other distributors like Distrokid.

Heard it through the Grapevine - They’ve got a customer service problem but that’s usually the price you pay for affordability.

Distrokid - Recently, they’ve been getting complaints about removing artists for streaming fraud, just as Ditto does. Again, the same thing applies, streaming fraud is a problem. No one will admit to it because they want the money. Customers have also complained about hidden pricing

Heard it through the Grapevine - They’ve got a customer service problem but that’s usually the price you pay for affordability. Releases missing from stores is another problem with Distrokid but that could be a result of artists saving money by not using Store Automator and not manually updating their stores.

Onerpm - Customer service seems to be a MAJOR problem with Onerpm as some artists have complained to me about waiting as long as two weeks to get a reply from the company.

Digital Distributors in this Report:

Tunecore

Distrokid

Onerpm

Ditto

RouteNote

Emubands

CD Baby

$300 Million Lost to Streaming Fraud?

$300 Million Lost to Streaming Fraud?

Distrokid - Digital Distribution Deep Dive

Distrokid - Digital Distribution Deep Dive