Digital Distributors – Choose the Right One for you

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Are you thinking about signing a deal with a popular Digital Distributor to get your music on iTunes and in other stores? Look at this chart for a comparison before you sign anything and read the legend carefully for how to use this chart.

Company Threshold Vig Opt Out Length Exclusive Fulfillment On Demand Printing Marketing Comments Overall 5 star rating
AWAL
awal.co.uk
$50 15% 30 days 30 days Negotiable No No Yes Contract straight-forward but leaves out many contingencies. However short terms and low threshold keep it a contender. ***
IRIS
irisdistribution.com
$200 15% No 3 yrs No No No No Some elements are exclusive but not master recordings. High threshold and long terms require careful consideration. **
DRA
digitalrightsagency.com
$250 –
$500
Neg. No 2-3 yrs Negotiable Yes No Yes Deals mostly with artists that have a lot of activity, therefore all points are negotiable. Points on this chart are a range. **1/2
IODA
iodalliance.com
$25 15% 1 month
Complex but doable.
Perpetual Yes No No No Caution: uses the term "underlying compositions" to define rights granted, but will negotiate. **1/2
The Orchard
theorchard.com
$50 Neg. No 1-5 yr Yes Yes No Yes Spotty rep. New management is eager to repair mistakes of the old owners but so far has not proven themselves to do so.  Will negotiate. *
CD Baby
cdbaby.net
Adjustable
starting at $10.
$20 is the default
9% 30 days Complex but doable Perpetual Yes
(despite claims to the contrary)
Yes No No Caution: uses the term "underlying compositions" to define rights granted. Will not negotiate terms. Variable threshold is troublesome. **1/2
TuneCore
tunecore.com
$0
(money held for 15 days)
$0
(fee of about $7 a year per album)
Fire at will 6 months >No Yes
(partnered)
Yes
(partnered)
No Best deal in town for the emerging artist. Run by industry veterans with good reps. ****

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© 2006 The Moses Avalon Company. Reproduction of this chart without permission is a no-no. To get permission click here.
 

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Legend

Threshold:
The amount of money you must earn on the deal to trigger a payout. If you do not earn that amount each month the company keeps all the money. Although these numbers might seem small they deserve some consideration. The company almost always deducts their Vig first before calculating the balance against the Threshold. So a Threshold of $200 and 15% Vig nets out to about 336 downloads per month before you get paid. (Example: For a 99-cent download on iTunes, about 29 cents goes to Apple, leaving about 70 cents that is passed on to the aggregator. Then the aggregator takes its 15%, leaving 59.5 cents. 59.5 cents divided into $200 is about 336.)
 
Vig:
The percentage the company keeps of your earnings through all digital sources . This is very important because many think that these deals are just for things like iTunes, but in most cases, they are for all digital means, including performance royalties earned from Satellite Radio.
 
Opt Out:
Many companies offer "Opt Out" clauses that suggest that you can get out of the deal easily by just notifying them. For example a "30 day opt out" implies that if you send them a letter saying you want out that you will be released within 30 days. This is rarely true. Since the advent of digital distribution, many people have tried "opting out" of old deals in favor of newer, better ones only to find that now there are multiple copies of their same masters on download services months later, each paying different royalty rates and thus tangling their credit history. The chart shows which companies offer this feature and what they claim is the amount of time it takes to be released from the deal AFTER notification.
 
Length:
The amount of time you are committed also known as the "Term." When you see "perpetual" this means that the deal is forever unless you notify the company within a window of time to cancel.
 
Exclusive:
Some companies insist that you do business with them and ONLY with them during the Term. Others are more flexible. However, the use of the word "non-exclusive" is often designed to instill false confidence in the customer. For example CD Baby offers a "non-exclusive" deal but the methodology of their software makes it virtually impossible to use them in conjunction with other companies. Most insist on commitments that are from six months to three years. Not only is this a lifetime in a recording artist’s emerging years, it’s a lifetime in the world of digital technology.
 
Fulfillment:
Does the company offer sales fulfillment of CDs along with their Digital Distribution deals? Yes or no.
 
On-Demand Printing:
Printing a small number of CDs is becoming more popular. This column shows whether or not the company offers this service along with their Digital Distribution agreement.
 
Marketing:
This column shows whether or not the company offers marketing services in conjunction with their Digital Distribution services.
 
Rating:
The ratings in the last column are done from the point of view of the emerging artist weighing their options for self-distribution while keeping their options open for a traditional record deal on a label.
 

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