Distribution: Why “Keep 100% of Your Royalties” is a lie.

You have probably seen the promise that you will “Keep 100% of your royalties” when taking up a subscription-based distribution deal with most of the online music distribution companies. Legally speaking this is true, when they receive royalties from the DSPs (Digital Streaming Platforms) and other online music stores like iTunes, they pass it on to their customers without taking a commission.

Being true from a legal perspective doesn’t mean it isn’t also disingenuous and intentionally misleading.

I’ve already covered the various things to consider when choosing a distributor, and really, the cost shouldn’t be the primary factor. I’ve used all of the major online distributors at one time or another, Tunecore, CDBaby and more recently Distrokid. Overall I’ve been satisfied with all of them, if I had to recommend one of them over the others I’d say Distrokid is the best of the online, self-service distributors with their feature set and ease of use but their statement that artists get to “keep 100%” still bothers me.

The goal of every self releasing artist is to at least have the music pay for itself. You will use the money made from music to cover the costs of making it and releasing it.

So, in reality, you will never “keep 100% of your royalties”, you will be using the royalties to cover the cost of the subscription. For some people, the cost of the subscription may be more than the royalties received, in this case, you will have kept none of your royalties at all!

For example, the current cheapest annual subscription with Distrokid is $19.99. Which on the surface is a great deal, you get to release an unlimited amount of recordings as long as they are all under the same artist name, but scratch just a little under the surface you will see that it’s not such a great deal. There are tons of essential features that you have to pay to unlock, such as Shazam and Siri recognition, but aside from that, it’s the promise that Distrokid will take none of your earnings as promised on their website that is the most misleading.

From Distrokid’s FAQ page

For you to cover the annual cost of the subscription you would need around 5000 streams per year, that’s just for the most basic subscription. For many people, particularly in the first year or two of releasing music, this is a huge number to reach just to break even.

Distributors that take a percentage of the revenue often don’t charge any fees upfront to release the music so while the first 5000 streams via Distrokid will earn the artist $0 in profit, the first 5000 streams on a distributor that only charges a commission will earn the artist money straight away. Distribution commission is usually 10-20% so even at the higher end of that the first 5000 streams would still earn about $16. Which is $16 more than with Distrokid who promised you would “keep 100% of your royalties”.

For Distrokid to be more profitable than going with a distributor that only charges commission, you would need to be getting 25,000 streams every year, even more if you wanted the features that Distrokid charges extra for.

Now before you jump ship to a “free” distributor it is worth first calculating if the commission will be more than the annual fees. If you are getting enough streams to cover the subscription and any extra features and aren’t paying more than 20% of your earnings back to the distributor then the deal is probably right for you.

If you are just starting out and have no idea how many streams you may get in the first year and have a tight budget it’s worth considering a commission based distributor. However, be aware there’s some companies offering “free” distribution that may not be worth the hassle and the inconvenience in order to save a few dollars.

I trialled Routenote and Amuse, two companies offering free distribution, they both have premium subscription-based services too. In the case of Amuse the free service is employed in a bit of a bait and switch. You can release music for free but it takes 28 days, twice as long as their premium option. Once delivered to the DSPs and online stores it takes around 7-10 days to go live, the stores don’t know which song came from “free” accounts and which came from premium accounts so they treat them the same, the only way for the “free” service to take longer would be for Amuse to purposefully drag their feet and delay delivering the releases. They do this for no other reason than to make the paid option seem more desirable. The other major drawback of their free account is they only deliver your music to 5 stores. A tiny fraction of the stores distributors usually service. It is the biggest 4 (+ Tidal), Spotify, Apple Music, YouTube Music, Amazon Music, and Tidal. But that leaves out Pandora, one of the biggest non-interactive digital music platforms in the world, and a lot of other very popular services.

Not only do Amuse make the hollow promise of keeping 100%, they also offer to do it for “free”

At this point, I decided that the free service was useless and decided to instead try out the premium service, so I paid $59.99 for an annual subscription and uploaded a song. I waited a few days for the data and artwork to be approved, much longer than almost any other distributor I’ve ever experienced. After 3 of 4 days, I was told that “the stores have rejected the artwork”, so I asked which store(s) specifically and what the issue was. They then changed the story and said that in fact, they had rejected the artwork themselves as they anticipate it being rejected. The reason they gave was that it was too low resolution, although I had delivered it at 3000px x 3000px as requested.

I went back to the designer who made the cover and asked him to check that the file was in fact 3000px, they confirmed it was but send me a new file in .png format to be safe. As the artwork had been rejected I had to start the upload again, I couldn’t simply update the artwork and resubmit so I went through the whole process again from scratch. After submitting I had to wait a few more days, once again they got back to me and said the artwork was still “blurry”. Over a week had passed now and I had had enough, there was nothing else to do short of completely redesigning the artwork so I went to another distributor. I uploaded the files and within 72 hours the song was live on almost all stores. With the same artwork, with no issues.

I contacted Amuse and requested a refund as they had not provided the service I had paid for and, as they had rejected what turned out to be perfectly acceptable artwork, they were incapable of providing that service. They refused to give a refund and instead just cut and pasted sections of their terms and conditions into a series of rude and condescending emails. (which is literally the worst thing to do if you are having a dispute with a customer)

After the 5th or 6th email from them in consecutive days I decided to cut my losses and move on.

RouteNote on the other hand, was not that bad, especially compared to Amuse. There were only really 2 drawbacks, one is that they took a very long time to approve the releases, 2-4 weeks across the 2 albums and 2 singles I released with them. The other issue is that they have a $50 threshold before they payout, and even though I’ve had one album on the service for 3 years now it’s only earned $11.15 so it will take another 12 years at that rate before I can withdraw any money! You have to have 12,500 streams before you can get the money. If you think you can get that many then RouteNote is a viable option.

So what’s the takeaway?

Don’t take the claims and promises at face value, do your calculations and work out which is best for you, commission or subscription.

If you want to move distributor, you can, as long as you follow the correct steps your music will move from one distributor to another without ever being removed from the stores and you will retain all your stats.

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