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Figuring out how to keep up to date with the constantly changing digital world can be confusing – even for those in the entertainment industry, gone are the days of people flooding to the local record shop to buy their favorite artist’s new album. Instead of buying a song on iTunes with your iTunes gift card, new songs and albums are being put directly into streaming services for us to enjoy with our smartphones.
Along with us adapting to the way we ingest music, going from records to cassettes to CDs to iPods and iPhones, the industry itself has had to change as well. Instead of being able to work as a middleman between the record label and the retail shops to bring the sound of an artist to the public, these middlemen have had to adapt to keep their company in business and learn how to make money with streaming services.
Let’s see how music is ingested and provided to the public has changed the industry as a whole.
Importance of music distribution companies
Music distribution is the process of making content provided by musical artists available to consumers via retail stores or online methods. This aspect of the business is often overlooked, as costumes simply think of their favorite artist or recording label as the face of the artist.
However, the middleman is known as a music distribution company, an important cog in the machine of the music industry. These companies make it possible to purchase music in stores, download songs, or stream albums using your favorite apps like Spotify or Pandora.
Although the steps of music distribution and the mechanics have changed in recent years, since the inclusion of the digital age and downloads, the thought behind it remains. Music distribution companies work to help consumers enjoy the music produced by arthritis without the record label or ‘retail stores’ getting in the middle.
So – what is music distribution?
Music distribution is the process of making music available to the public. By using contracts between retail stores and the record labels, music distributors have access to specific record stores, download sites, and streaming platforms that work together to cut a deal to make the rights available to purchase, allowing these services to resell an artist’s music.
Music distributors can be thought of as a middleman in the cog of the music industry. By bringing the content created by an artist to stores, making songs and albums available for public listening, the distributor works to provide consumers what they want, while giving the artist the credit they deserve. Without a distributor, we would not be able to listen to the majority of the music we find on streaming services and in retail stores.
How does music distribution work?
Music distribution companies used to sign physical deals with record labels and retail stores, ensuring the record label’s artists could sell their work at a record label store. Nowadays, it is more complicated with the thousands of online sites and downloadable platforms. Even so, the process is the same, with the distributor taking a cut of the payment from each ‘unit’ sold from the artist’s album or song.
Most music distribution companies expect record labels to provide them with an album ready for general consumption. However, some music distribution companies offer a service that means they are in charge of manufacturing and distributing the music. This process is more work for the music distribution company, but it also results in a heftier payday for the business.
With this music and distribution setup, the manufacturing costs of an album are paid by the music distribution company. By paying for the manufacturing, they can keep the income from the album sales until the investment from the record label is fully paid.
How music distribution has evolved
Music distribution looks different today than it did during the previous century. Most distribution companies worked with retail stores that were known for selling electronics, CDs, and tapes, such as Best Buy, Walmart, or independent record stores. Record labels would sign contracts with recording artists and with music distribution companies, counting on the distributor to take the music made by the artist to the wholesale stores.
Today, music distribution companies work with online streaming platforms to ensure an artist is getting paid per download or per stream of their music. Without music distributors, online streaming platforms would have to pay royalties individually – an extremely complicated and time-consuming process prone to many mistakes.
Downloading music brought extreme changes to the music industry, with fans illegally downloading songs via Limewire and other methods that would let them freely listen to music previously found only on CDs and tapes.
Streaming services
Although consumers now pay to download music through legal methods, like Apple Music or Amazon, the sales numbers of CDs, cassettes, and physical modes of listening have plummeted drastically. The music industry has lost billions of dollars in sales, as people listening to music are no longer buying the full CD or cassette tape at stores for $20, but rather spending just $8 per month to listen to whatever they want on Spotify.
Subscription services, like Pandora and Spotify, have helped the industry rebound and have also changed how the music industry and artists make money from their music. Music distribution companies now work with only a few of the largest record labels, like Universal Music Group, and streaming services, instead of retail stores.
Where did royalties come into play?
One important – and overlooked – characteristic of music distribution is the process of royalties. Royalties are the rights to a song and can impact whether an artist’s album is able to be broadcast to the world while giving money to the rightful owner of the song. A music distribution company needs to give the royalties to music back to the song right’s owners (usually the artist, unless they have a deal with their record label).
As physical copies of music have become digital in the past decade, who owns what was replaced by a more flexible system. Instead of knowing which artist-owned what album in the past, the process of figuring out and determining artist royalties has changed – just like the music industry itself.
Regarding streaming megalith websites like Spotify and Pandora, music consumption and purchases go together. Therefore, the value of the stream of each song depends on numerous factors the music distribution company controls.
Calculating royalties is a key step in the music distribution process, ensuring the proper person gets paid and earns recognition for their hard work, sales, and widespread consumption. Instead of streaming services needing to provide royalties to every artist on the platform who owns the rights to their songs, the service can instead use a music distribution company to organize their payments and ensure each artist using the platform stays happy.
Music distribution companies help fill the gap between the streaming service platforms, royalty payments, and the song right owners (the artists usually). Music distribution companies work to help ensure every royalty finds its way back to the recording label and artist without being lost in the streaming platform.
By getting the artist’s albums and songs into the world for public availability, whether it be via vinyl records, pay-per-song platforms like iTunes, or streaming services like Pandora, music distribution companies have done this part of their job.
What does the future of music distribution look like?
Music distribution has changed in the last few generations, drastically altering the way consumers can listen to music. With the music industry quickly changing the production of music from records to tapes to streaming service downloads, we see just how quickly ever-changing technology and the need for the fastest product can change the way we produce and consume music.
With the constant change, we see how it is almost inevitable for the music industry to continue the way it is in the future. Just like anything in life, the industry will continue to evolve – and music distribution companies will have to adapt.
There is still a role for music distribution, with companies providing streaming services with the rights to artist’s music. For this reason, music distribution companies can still partner with record labels to bring new music to listeners via streaming services and download platforms.
In addition, music distribution companies can take advantage of the latest trends, as some retail stores will continue selling vinyl records for those who like listening to songs on a record player.
Conclusion
As you can see, music distribution is a key part of consumers listening to new content created by artists. Without this middleman, we would have trouble finding and accessing music by our favorite musicians, since the record label and the artist have other jobs in the music industry.
Just as the industry continues to evolve, the music distribution process will continually change as well.The first was the man to bring records to stores, distributors have now changed to ensure artists’ music travels to streaming services for immediate consumption.
