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Digital Distribution
by Mike Grebb.

This article first appeared in The Musician's Atlas' June 2005 Atlas Plugged Newsletter and is used by permission. The Musician's Atlas is a fantastic resource for musicians, containing over 30,000 music business contacts.

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Perhaps no other area of the music business is more mysterious for emerging artists or indie labels than distribution. After all, getting your CD into a record store is not only a thrill--itís real validation. You must be legit, right?

But alas, wide retail distribution has never made a whole lot of sense for the vast majority of artists. Retail space is limited and unless there's a demand for your CD (unlikely if you're not touring nationally and getting covered in local media across the country), shoppers probably won't plunk down money for your album. And as if that's not painful enough, distributors usually charge a hefty fee (deducted from your royalties) for all the returned, unsold CDs. Ouch.

Happily, the digital revolution has changed the distribution game significantly in the last few years. Getting your CD into brick-and-mortar retail outlets is not as vital to your success as it once was. In today's new music landscape, artists look to digital distributors such as iTunes, MusicMatch, Napster, America Online and others for revenue opportunities.

No matter how your music is digitally distributed, (song downloads, limited license via a subscriber service, streamed from music sites, Weedshare, etc) one thing is certain: Never before has getting your music out to the world been so darned easy. With digital distribution, anyone on the planet can access your tunes from anywhere. And that, without a doubt, benefits emerging artists who donít have lots of money behind them.

Navigating the digital distribution landscape, however, is confusing and rife with enormous complexities. Take music download sites, for example. Probably no two sites operate in quite the same way, which means artist pay outs and other factors differ considerably.

Artists and labels must first decide whether to contract with individual download sites on their own or to use a digital-distribution service that can get material out to dozens of download sites in its network. Using a service can save an enormous amount of time, effort and frustration. Think of all the aggravation youíre avoiding in not having to collect reports from a kazillion download sites. With a distributor, itís all aggregated in one place. To me, thatís more than worth whatever fees are involved (we'll get to those in a moment).

In addition, a digital distributor representing hundreds or thousands of artists is likely to have more pull with the sites than you would have on your own. That can translate into getting your songs up and selling much more quickly, although patience is a virtue here. Remember that every major label, along with every indie label and independent artist, is trying to get their stuff up on iTunes. My distributor, CD Baby, has been trying to get me placed on iTunes for months, but theses sites are enormously backlogged, and many obviously give priority to big-name artists.

Hooking up with a top digital distributor can also help place your music with other emerging areas such as ringtones, which are potentially even more lucrative since customers typically pay two or three times what they would pay for a song download just to get a beepy little sample on their phone. Go figure, eh?

Some outfits have entire divisions devoted to "mobile music," which can include not only ringtones but also wireless digital music distribution in general (i.e., to cell phones or other wireless-enabled devices). The bottom line is that distributors keep their pulse on new and emerging avenues for getting music out into the digital universe. Unless you want to spend half your life tracking developments yourself, you might want to look into a digital distributor so you can focus onÖ oh, I don't knowÖ music, perhaps.

Be aware, however, that some digital distributors (like many traditional retail distributors) require exclusivity, which restricts you from signing one-off deals on your own. In such cases, you can only distribute music on sites within their network. (One exception to this is IRIS, which signs non-exclusive deals with indie labels). Since the object is to get your music out to as many places as possible, it's important to consider whether the distributor has a large enough network with some big-name players included, to make exclusivity worth while.

And, of course they do expect to be paid for the service that they provide. Typically they take a small percentage of the sales, but the amount and how this is structured really varies case by case. One of the most accessible digital distributors is the well-known CD Baby, which takes 9 percent of your royalty. So under that model, if Site X sells your songs for $1 per song and keeps 45 cents of the sale, CD Baby takes almost six cents per download from your 65-cent cut (i.e., 9 percent). Not bad, considering that you get to keep 59 cents for yourself and didnít even have to deal with the download site directly (Submitting songs on your own can be a nightmare. Each site has its own submission standards and metadata requirements, not to mention encoding preferences).

Shop around. Since each digital distributor is different and caters to different kinds of artists and labels, you'll have to shop around. Pick one that's right for you. One caveat is to always read the fine print. Some digital distributors may require separate fees for encoding your songs, adding metadata, or other administrative and technical tasks. There might also be a sign-up fee. Just make sure you fully understand this stuff.

Shiny discs will be with us for a while, but everyone needs to understand the world of digital bits rushing around cyberspace. It's the future. Don't be left behind.


(Mike Grebb is a writer, journalist and singer/songwriter based in Washington, D.C. He has written for numerous publications, including Wired and Billboard. He just completed his debut solo record, Resolution, which is available at www.mikegrebb.com).

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