What’s good guys,
Today I will be doing this post to discuss and share my analysis on music distribution for independent labels and whether a pay per release with a commission on the back end, or a unlimited releases subscription based model is better.
I will be using the most popular distributors – CD Baby and DistroKid.
Let’s see how they perform over a 10 year period with equivalent earnings of 10 million streams on Spotify. Some artists get earn more than others, so we average it out so that each artist does 1 million streams per year.
That’s a total of $38.080 earned in royalties from the masters.
A startup label has 10 Artists and each artist needs to release the following every year:
4 versions of a 20 song album (Explicit, Instrumental, Radio Edit, No Drums Edition)
5 Singles and/or EPs
That’s a total of 40 Albums and 50 Singles/EPs released over a 10 year period.
For the comparison, we will be using 3 different options:
CD Baby
DistroKid with Extras (Discovery + Content ID)
DistroKid without Extras
DistroKid charges a yearly fee for unlimited releases and a yearly fee for extra features on your release. If you want to keep your music in stores forever, you need to pay the “Leave a legacy” feature, which is a one time payment of $49.00 for an album and $29.00 for a single. Let’s say we don’t need it since we are paying the yearly subscription anyways. We will also avoid the “add to new stores” feature and once a new store pops up, we can add it manually for free. Although this might be a headache down the road. 3. DistroKid (No Extra features) I included DistroKid without Extras to see whether it would make more sense to distribute without additional yearly fees, which can be quite significant over a long period of time.
CD Baby includes content ID, database registrations and adds to new stores without any extra costs. They take a 9% commission for your release and keep it in stores forever. That’s it. They also have a CD Baby Boost feature which is one time fee, but let’s assume the label has it’s own publishing and handles SoundExchange.
| Distributor | Annual fee | Fees per 40 albums, 20 songs each | Fees per 50 singles | Fees per 10M streams | Total fees after 10 years | Profit per 10M streams |
|---|---|---|---|---|---|---|
| CD Baby | $0.00 | $399.60 | $499.50 | $3,427.20 (9% cut) | $4,326.30 | $33,753.70 |
| DistroKid with Extras (10 Artists) | $157.99 | $1,390.00 | $297.00 | $0.00 | $22,139.88 | $15,940.12 |
| DistroKid No Extras (10 Artists) | $157.99 | $0.00 | $0.00 | $0.00 | $1,895.88 | $36,184.12 |
As you can see, DistroKid with no Extras would be the clear winner here with the most amount of profit per 10 million streams over a 10 year period. CD Baby comes second. DistroKid with Extras comes third and has the most fees with the yearly subscriptions.
Releasing on DistroKid without extras makes you miss out on key features like getting your music discovered in databases (Discovery Pack) and getting your music recognized and claimed in the YouTube System. (Content ID)
While CD Baby does this for free, you need to pay a yearly fee to DistroKid for this service. This is where for most artists and labels it will become unprofitable to use DistroKid.
You see, for an independent label using DistroKid, 1 million streams per year is never guaranteed, but you will always have to the subscription. If you are not out earning the subscription fee, then you would have to pay $1960 to keep the albums and $1450 to keep the singles in stores forever. How prolific are you? Let’s not forget that as you sign more artists, the subscription plan will become more expensive every year.
To me, this might be a bit predatory from DistroKid since you would either have to pay the subscription until you die or pay a significant amount to cancel your subscription and keep your music in stores. You get sold the dream that your music will blow up and out earn the fees, but you can’t out earn stupidity.
The Angel’s advocate for DistroKid:
Let’s say your music blows up and you don’t even have to worry about the fees since you’re making so much bank. Well, guess what, if your music blows up and does 10 million+ streams per year, you will most likely move from DistroKid into a custom distribution deal with another company. The chances of this all depends on what you’re doing. But to me this is a huge risk if the music suddenly stops earning you more than what you’re paying every year.
|
Features |
DistroKid |
CD Baby |
Winner |
|
YouTube Content ID and social media monetization (TikTok, Facebook, Instagram) (Single) |
$4.95/yr + 20% of revenue |
$0.00 (Free) + 9% of revenue |
CD Baby |
|
YouTube Content ID and social media monetization (TikTok, Facebook, Instagram) (Album) |
$14.95/yr + 20% of revenue |
$0.00 (Free) + 9% of revenue |
CD Baby |
|
Global Song Database registration |
$0.99/yr per song (Discover Pack) |
$0.00 (Free) |
CD Baby |
|
Cost for 10 Artist Slots |
$157.99/year subscription plan |
$0.00 (Unlimited Artists Slots) |
CD Baby |
|
Cost per release |
$0.00 |
$9.99 |
DistroKid |
|
Revenue split (DSPs) |
Keep 100% |
Keep 91% |
DistroKid |
|
Music Video Distribution |
$99.99/year (Keep 100%) |
Available only for select partners |
DistroKid |
|
Automatic Revenue Splits |
Included ($20.00/year for collaborators who don’t have an account) |
No |
DistroKid, although your collaborators need to pay a $20/year subscription to keep royalties. It might not make sense to pay $20 if you song doesn’t do at least that (excluding payment fees) |
|
Keep your music forever in music stores |
$29 per single $49 per album |
$0.00 (Free) |
CD Baby |
|
Add to new stores automatically |
Store Maximizer ($7.95/yr) |
$0.00 (Free) |
CD Baby |
As I evaluate the risk vs. reward when it comes to comparing CD Baby to DistroKid, to me the clear winner will be CD Baby.
You pay one time, get the extra features at no additional cost, you keep your music in there forever in exchange for a a mere $10 single payment and 9% commission on sales.
Your music doesn’t make 1 million or 10 million streams a year? No problem, You’re still in the green and earning royalties till you die and not paying subscriptions and fees.
If your music blows up and you’re with CD Baby, you can negotiate with them or another distribution company, get into custom tailored deals and move your catalog. But with DistroKid, if you’re not out earning the fees, then you either have to pay a huge fee to keep your releases in stores forever, keep our subscription, or get your songs taken down.
Consider supporting our label by checking out our music on our home page.
