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We don’t distribute music here at Habitat (and we have no plans to in the future), but we know that choosing the right distributor for your label or artist project can be a big decision for business owners. Think about it, you’re entering a multi-year partnership with a company who will perform fundamental tasks on your behalf in exchange for a large chunk of your earnings. It’s no wonder music businesses put so much time and energy thinking about who they’d like to partner with for distribution.
Does it need to be that way? Yes, it probably does—if you’re not thinking critically about your major partnerships your music business is probably suffering from under-management—but it doesn’t need to be stressful. With a few key things in mind, selecting your distribution partner can be an easy and rewarding process.
The most important element at play in a decision like this is the relationship between partners. If you’re coming to B2B distribution from an aggregator, it’s likely that any company you work with will be a step up. Still, there are fine label managers, and then there are great label managers. Find yourself a distribution partner whose dedicated label manager is responsive, knowledgeable, and willing to advocate for you within their organization. This point of contact will be who you turn to when you need last minute changes to release artwork, or when you want to advocate for new features or changes to your distribution portal. If your label manager doesn’t have a 24-hour response time, ditch them and find someone who does.
Nobody wants to get bogged down by bad technology while they are setting up their releases for distribution. Unfortunately, some distribution companies have user interfaces that seem to be stuck in 2010. Other distributors, like IDOL, benefit from technological independence and excellence. While IDOL's Labelcamp platform is perhaps the best distribution portal out there, they white label it to other distributors as well (Xelon Digital , Republic Of Music). At the end of the day, it is the same fantastic technology.
Some distributors offer basic royalty management services built into their platform, but you’re much better off using a dedicated royalty processing platform like Habitat to manage your royalties. Usually, distributors royalty tech is limited and hard to use. There are a few distributors (like the above-mentioned IDOL ) who have integrations with Habitat to help make your life easier.
There is a wide range of rates that distribution companies will charge you (between 5%-30%). As a rule, European distributors with high-touch customer service will generally charge more than American distributors aiming for automation and efficiency. To further complicate things, there is a new class of distributor—like Too Lost and Revelator Ltd.—that uses technology to push their rates to some of the lowest we’ve seen. This of course has tradeoffs of its own. We recommend shopping around, getting a few different rate proposals and then making a counteroffer to your preferred partner. Odds are they will be receptive to a counteroffer, especially from an established label.
Every distributor out there will tell you about their abilities to help you land placements for your releases. Ignore this. They all have similar levels of access to the editorial tools and teams at the DSPs. The exception here are dance-oriented distributors who have spent decades cultivating relationships with Beatport, Traxsource, etc. Paradise Worldwide approaches this problem by offering real marketing and development services instead of promising playlist placements. At the end of the day, it will be the strength of your music and your artist brands that will be the key factor in driving placements.
Consider setting up direct deals via Merlin and using a service like AudioSalad to deliver your music to DSPs. While you might not get a dedicated label manager, you’ll save buckets when it comes to your overall margin. Yes, it’s more complicated, yes, it’s more work, but platforms like Habitat can ease many of your struggles and help you save time and money on a worthwhile endeavor.
