Understanding the Basics of Music Distribution

Music distribution refers to the ways in which music is recorded by the industry and how it is offered to the consumers. Music plays an integral role in its business model and can be purchased online, downloaded or streamed. The internet has dramatically changed the mechanics of music distribution, with both positive and negative effects on artists. For many years now, this industry has operated in a certain way and continues to do so in the digital age.

Music is not only created by musicians but is also influenced by many other players throughout the process of getting from its source to your ears. Producers, engineers, record labels, promoters, agents, and publicists all play important roles in the music industry. Distributors are equally significant.

Mechanics of Music Distribution 

Music distribution companies are responsible for distributing records. Through a contract and payment system, a distribution company grants record stores, online download platforms, and streaming services the right to buy and resell an artist's music.

It is common for record distributors to sign agreements with record labels granting them the right to sell the labels' products. The distributor shares a portion of earnings from each unit sold with the label.

Distribution companies offer manufacturing and distribution agreements (M&D), but they typically expect the record labels to supply them with finished, ready-to-sell products. As a result of this arrangement, the distributor pays the manufacturing costs of an album upfront. In addition, the distributor keeps all revenue generated from album sales until those initial expenses are recouped.

During much of the 20th century, record labels released their albums through distributors, which sold them to retailers such as music-only stores, big-box retailers, and bookstores.

Music distributors can be understood as wholesalers when examining their functions within the music industry.

Record labels have the option of hiring musicians. These companies market, record, and promote the music. Cassette tapes, CDs, and record players were the most popular formats of music purchased by consumers. These products are usually produced by the labels themselves. To get their albums into the hands of fans, labels and distribution companies signed distribution agreements with retail stores.

Distribution models determine whether albums are bought directly from labels or consigned. Retailers sold the albums both outright and on consignment; some bought them outright, while others did so on consignment.

Music Distribution Today

The 21st century has seen a fundamental change in the music industry due to downloading. During the early days of Napster, there were millions of songs available for free download.

The music industry has lost billions of dollars from declining CD and cassette sales as consumers purchase legal downloads through outlets such as iTunes and Amazon. With Pandora and Spotify, the music industry began exploring new revenue models and distribution channels in 2015.

Few record labels remained affiliated with music distributors as hundreds of distributors crumbled. In spite of the fact that there are hundreds of independent record labels, Sony, Universal Music Group, and Warner remain the most prominent music distributors. It is likely that one of these companies is responsible for making music available to you, regardless of where you buy it, download it, or stream it.

Prospects of Music Distribution

Despite radical changes in the industry, music distributors still have a role to play. Some record labels and musicians don't want to take on the responsibility of distributing their own albums. In order to bring music to fans, the major music distributors are still closely associated with record labels. Some stores still sell physical versions of albums, like vinyl, CDs, and cassettes. Music is distributed to consumers directly through digital download services, in addition to distribution agreements with artists.

Music will probably be reshaped for years to come by the digital revolution, and digital music won't disappear. Distribution will likely continue to evolve as more artists use independent means of releasing their music.