Digital music distribution: how to sell your music online

The creative process of a musician is always the starting point for any musical career. But from the first notes and words to appear on paper until a sold-out venue there is a long way to go. Figuring out how to get music on Spotify often seems like a challenging task for independent artists. Let’s take a closer look at the importance of digital distribution in the music industry.

What is a digital distributor?

A digital distributor is a company providing an online platform, which artists and record labels can use to upload their releases to DSP’s like Spotify, Apple Music, Amazon, Deezer, YouTube and Beatport. Most distribution platforms are also connected to royalty accounting software, completing the supply chain for digital sales of music.

Large distributors, like Tunecore, Octiive and CD Baby all offer extra services such as help with music marketing and promotion, delivering to neighbouring rights agencies, creating artwork, radio airplay and music analytics.

Create your own label

Signing with a digital distributor means, in most cases, that you should register your own record label. This is because most DSP’s do not accept unsolicited releases or releases directly from an artist. A good digital distribution company can help you set up your own label.

The importance of digital distribution

The golden marketing rule in successfully launching a product is ‘50% focus on product development and 50% focus on distribution. Lots of artists get stuck in the creative process and dedicate too much focus on perfecting their musical work. Quality is of the utmost importance, but some artists tend to get stuck in a ‘bubble’ and lose track of the bigger picture.

The bigger picture means a record can only be monetized once it has been distributed. A manager plays an important role in giving the artist the right focus.

What to look for in a digital distributor

With so many distributors around, we highlight the features you should look out for when searching for the perfect match:

The number of connected DSP’s

Not all distributors have the right amount of deals in place to deliver to a wide array of digital service providers like Amazon, Spotify or YouTube. If you want your music to be distributed globally, to as many platforms as possible, make sure to look for distributors who can provide this service.

If you only aim for music sales locally in your own territory, this, of course, does not apply.

Relationships between distributors and DSP’s

Equally important is how well a distributor and DSP co-operate. When signing a track to a record label, a label manager is often responsible for maintaining a solid relationship with a DSP. A good digital distributor can promote and prioritize your content to big DSP’s, as an extra push to filling out priority submissions on f.e. Spotify 4 Artists. Besides that, not all distributors receive a daily feed of data about sales and streams. Flying blind when working on a marketing campaign can be a tricky thing.

Distribution fee

There are several ways a digital distributor charges for its services. One of them is charging a percentage of the revenue generated. In some cases, distributing music is for free and the distributor only takes a share of the royalties. No streams mean no revenue for the artist or the distributor.

Another way of charging for services is to pay an upfront fee. For example Tunecore, they charge almost USD 50 per distributed album. The upside of this model is that usually, the artists receive 100% of the royalties collected. So in case of a huge hit, the distributor only makes USD. 50 revenue whilst the artist gets all the royalties.

A third method is a hybrid of both; charging a (smaller) upfront fee and a small % of the royalties. Often this way of working also includes additional services like marketing and promotion, or in some cases mastering.

Reporting

Not every distributor reports in the same way and frequency. Some report monthly, others quarterly and some even semi-annually. An important note here is that distributors always pay royalties collected from DSP’s, when the DSP’s have made their payments.

DSP’s like Spotify, for example, report at least 2 months after the end of a month.

The format of reporting is also important to look at. Pdf’s might come in handy for a quick overview but detailed excel files are needed to pay each contributor its fair share.

Online platform

An obvious one, but a good distributor of online content must of course offer a state of the art online platform. An artist should be able to upload, manage and track all of his content 24/7.

Access to data

Having access to a good platform is one thing, but being able to download reports, see trends, analytics and statements are also important for any artist. There are lots of differences between digital distribution platforms when it comes to accessibility of assets.

Music promotion

Besides pitching music to DSP’s, several distributors also offer music promotion services like creating press kits, promotional mailings and in house marketing tools. Sync licensing, radio promo and reporting to collecting agencies is also an extra service of distributors.

Case study: Octiive

We’ve taken Octiive to serve as an example of a digital distribution company. Octiive offers more DSP’s than any other distributor and offers flexible packages, varying from pay as you go services to unlimited uploads.

Octiive also offers a label service, in case an artist does not yet have a record label on which to release its music. Distribution, a music blog, promotion, marketing and mastering are services of Octiive. It includes an easy to use online system with trends and analytical data.