Fri Aug 13, 2021

I was talking to a friend who is an amateur artist. He has some success in his genre but it’s a hobby for him. During the past weeks, I had this conversation with several artists so I thought of writing a piece around it to explain how the digital distribution is divided and how it works.

My friend had uploaded on a kind of famous site to be shade. This site is very common but for us the professional industry it has a long time being really shady. First of all, you can upload your songs through an app for no cost but most of the cost is hidden so, in reality, it’s not free. My friend knew that but actually bought an upgrade some he became a pro member to get better service to be able to talk to support and get things out in 48 hours.

Just that is a bit shady itself, any decent digital distributor has support that doesn’t cost extra. I can see though why the companies choose to have that. Too many artists are contacting them about matters that have nothing to do with them, the artist wants to just have a good old chat around their music, things that take time and really don’t get any revenue. Since I have created over four different distribution systems, I know that amateur artists are really hard to make any money out of.

This is why the distribution system looks like it does. In the beginning, around twenty years ago, they took anyone in. They thought that with large catalogs they could get money in the long tail. These companies also brought in real labels and real companies that actually market their artists. Over the years these companies saw that the long tail really wasn’t that attractive. With a large catalog, you get quite many of these artists that blame their own mistakes on you. Sitting and doing their own calculation how much money they will earn on 100 streams etc. Most of these artists don’t even have business accounts fewer paying taxes on what they earned. The ones that started early quickly changed rules, so they got rid of the small artist that just wants to brag to their friends that their song was on Spotify. They kept the bigger clients. These companies today are the bigger distributors that professionals use, among them you find The Orchard, Kontor New Media, Ingrooves, etc.

That made the market opens up for new people trying the long tail. These toughs have a really hard time attracting any serious company since the strategy was to get the artist to pay for each step they took. Here came the pro accounts, that they can get your song published, cover songs cost extra, and so on. Here you have CD-baby, Distrokid, and such sites.

This created like two sections. The professionals that have deals and services that are unheard of from the ones that are open to everyone. Of course, my company did the deals very early and with several of them non-exclusive. Here we go, I can tell that we have deals with the professionals where they take between 3% to 5% of the revenue that comes in. We can upload as much as we want at any time. The handling around is to get out is normal 12 hours. But with a simple mail, I can stress out a release in an hour's time if there is a crisis. Of course, free support and also loads with free tools to promote my releases in their system. This is what most professional mid-sized or bigger labels have.

This will never get offered to any amateur artist, not even if they stream millions. Because what happens after these companies had taken the marked some new ones got on, especially companies run by major labels. You think that the majors had the same deals as the first ones. Nope, they tried to build their own systems that became slow and really insufficient. Many wrote deals with them not even using their distribution. No, the majors needed these new systems to be able to find artists that were coming up and grab them early. In reality, this is that they could get rid of their A&R:s and just relay on having the system beep as soon as an artist reached a certain number, then approach the artist and give them a sucky deal that basically said that they took 50% of the revenue and the artist was still in the system paying for their service. Systems like this are Spinnup from Universal, Tunecore that was bought up to become a service like that. Amuse was created by people from major labels. They often say that you can upload your music and get signed.

The problem with this was that they haven’t thought of all the crazy artists that jump on the systems. And also, that the competition is quite fierce between these companies. In the end, they also learned that just because they get a ring at a certain number it’s a good signing. On major signed a football team by mistake, they had given out their own chant and of course, all their fans were listening so the numbers were high but were not an artist you can develop.

In the end the majors got tired of scam artists paying to get numbers and them paying for useless artists. Instead, now you have companies like Chartmetrics or Soundcharts also measured how many fans the artist got on social media and on other things like ticket sales and started to use those. It didn’t go better since many of these artists there were done by managers and professional teams that took big bucks to sell the artist. I have had so many conversations with majors complaining of the price picture.

In the end where we are now is that there are still these professional companies out there. But they have understood that rather than having a million artists it is better to have the 10% that brings in the money. I was talking to one of them to get a deal for an indie band with good traction they have over 20 million streams of their first album and singles. But even that was a bit too low. They wanted a good catalog that brought in 100 million streams quarterly or an artist that did around 2 to 3 million streams the first two weeks. They explained that they have nowadays included PR services and a bunch of other systems that the artist gets for free. In fact, the offers they had were kind of what you got from an indie label in the 90:s. But in return, they really must be profitable. They didn’t want to waste time on projects that were not supported in some way.

All the amateur artists that release music are stuck with the other companies that will charge for everything they do. And it goes in waves where the artist is for the moment since these companies change their offers all the time. The reality of the whole thing is that it’s not even close to what the professionals get for free and even get more service than that. We also now see people trying to establish a new record label but won’t stand a chance to get to the professional level and on the whole, will just go under during the cost that is mounted upon them to get out their music in the needed channels.

Do I feel it’s a scam that so many claims? Not really, it’s how you work out your business plan. Working with professional companies that know what they are doing and support their artist with real PR and campaigns is cost-effective. Having an open system where everyone can upload is demanding a lot of support from people who actually shouldn’t release music at all. They want the same service and opportunity as the artist that have it as a profession, while they don’t even know what a collection society does and in fact are not even equipped to be on the better services. Like my mentor once said, “many people want to get in, few are called”.

And it’s not really excluding either. If you are an artist and want to have a career. The cost for the services is kind of low and in pretty quick time you will be discovered by people that take you up the pyramid and at the end of all, you get to the professional level. The major problem is that all artist thinks that they should be in the top from the beginning.

Back to my friend though. He uses one of these companies, he doesn’t want to be at the top he just releases music as a hobby. But suddenly he was added to a playlisting system that is fake. He didn’t do anything; the system was just trying to prove that they worked to get him to buy their services, which he didn’t do. Suddenly this company just froze all the income that he had on his single. Even though he had paid for extra service he didn’t get an answer in a month why they froze it. When the answer came it was that he was featured on a playlist that was fraudulent. The problem is that he can’t affect what playlists are adding him. Also not all money can have come from that fraudulent list. He hadn’t told anyone or paid anyone to be on there. My concern is that there are some of these sites acting very shady and pray on the new artist that gets a feeling that the industry is here to cheat them.

So how do you choose a system? As an amateur, you can’t get a perfect system. You must work your way up. Choose what you feel comfortable with and then work not looking on numbers just get real fans and real listeners and you will be fine. Most people think that the distributors can break an artist or get them signed to a real deal. Don’t believe the hype, a sustainable career is mainly hard work.

Editor’s Note: Peter Åstedt has been working in the music industry for over 30 years. He has started record labels, distribution systems, and publishing companies. Peter also runs several major showcase festivals and is an advisor for INES and co-founder of MusicHelp/Discover Sensation. He has worked with the Top Ten most streamed songs and had music on both the Olympics and Super Bowl. Peter has currently taken up the seat of Station Manager of Cashbox Radio, working with MD, PD and station owner, Sandy Graham. As well he recently worked as the European Consultant for Heal the Earth – An Earth Day Celebration. His latest venture is a new Showcase Festival in Sweden, Future Echoes scheduled for September 16-18, 2021.