You may be wondering how a free music distribution platform can turn a profit. After all, if they are allowing people to listen to tracks for free, they have got to turn a profit from somewhere else, right? Some of the main music distribution platforms include LANDR, TuneCore, CD Baby, TopSpin, iMusician, MondoTunes, and Symphonic. In this blog post, we are going to take a look at how music distribution platforms like these can make money.
Commission-based revenue structure
There are a number of different ways that music distribution companies make money. Essentially, it is all about making sure there is a demand for music that fans can consume right away. Music distributors need to have an exceptional ability to spot fresh sounds and fresh faces. They will want to stay away from artists that sound like someone else who has already made it.
Typically, when they make an agreement with an artist, they will work with them on a commission-based agreement. This is their main revenue model, yet it is not the only approach they take in order to make money. There has also been a move to digital distribution in recent years, and this has helped music distributors to lower their overheads when it comes to getting music out there for fans to consume. After all, there are no CDs, nor is a warehouse needed for product storage.
Music distributors are heavily involved in the world of marketing. After all, they need to get the word out about the musicians that they represent. From weekly newsletters to social media marketing; there are many different ways that they do this. Email marketing campaigns are significant as well.
Making key partnerships in order to drive profit
A lot of music distributors will also look to partner with retailers in order to make money. They will create a brochure or media kit that has details regarding what makes their business and titles special when compared with other distributors. The brochure will be directed toward making sure that retailers realise that they will miss out if they do not stock your titles.
It is also important to partner up with online music retailers. This includes the likes of eMusic, Myspace Music, Amazon, and of course, iTunes. You will need to look at their individual websites so you can find their specific guidelines.
Finally, music distributors also turn a profit by making key partnerships with digital music kiosk manufacturers. You will want to get in touch with the development team so that terms can be negotiated regarding all songs in your library being uploaded to the machines in question.
So there you have it; hopefully, you now have a better insight into the world of music distribution and how these businesses make a profit. Overall, it is all about creating demand and making music that is readily available to fans. A lot of money is thrown into advertising in order to make this work.