New Post: Labels Competing With Distributors Creates More Options for Creators - https://lnkd.in/gazEnGGA -
These days the music industry sometimes seems like a media business version of “Trading Places” in which every label wants to be a distributor and every distributor wants to become a label.
On March 7, Warner Music Group disclosed its interest in buying the French digital music distributor Believe, but all the label groups are focusing more on the distribution game – think Sony Music’s 2021 acquisition of AWAL and Universal Music Group’s October consolidation of Virgin Music and Ingrooves. At the same time, distributors are offering more of the services that only labels used to provide, including radio promotion and different kinds of marketing.
From the perspective of an independent creator, these two once-separate sectors have moved close enough that they’re competing – the majors are offering more flexible contracts that allow artists to keep their copyrights, while distributors are providing advances and an array of services to successful acts. For anyone who was in the industry before streaming became the standard, this seems like the music business’ Reese’s moment: You got your distribution in my label! You got your label in my distribution! To outsiders and young creators though, the distinction might not even make that much sense in the first place. Behind all the complicated corporate org charts, isn’t Sony just investing in, marketing and distributing Bad Bunny’s music (through The Orchard), just as it invests in, markets and distributes Beyoncé’s (on Columbia)?
Sort of. Companies spend less, and make less, on the music they distribute, while acts signed to labels represent bigger bets both in terms of investment and potential upside. Distribution is steadier, while the label business involves more risk and some very profitable successes that more than make up for them. That’s not new. What is new, though, is how what was once a binary choice has become more of a question of finding the right point on a spectrum of risk and reward that has a traditional label deal at one end, distribution on the other and plenty of options in between.
It’s easy to understand why distributors are offering services that were once solely the domain of labels – pure online distribution has always been a low-cost commodity business, and label services offers are one way to get better margins. But what about the opposite? Why are labels getting into a lower-profit business that essentially endangers the best part of their existing business? Especially as label deals get less standard, companies make higher margins on acts that are early in their careers, before they score the success that gets them the leverage to negotiate a better deal.
Understanding why the major label groups are investing so much in a less profitable sector than the one they’re in
Ex-City HR/Project Manager | Virtual EA & B4 NHS PA | Special Events/Projects | Arts Coordinator/Volunteer | Artist
1moGosh, like magic this appears - have just typed 'Luke Bryan' for the first time on LinkedIn and there he is presenting in 10 days time - spooky!