The Distro Deal Or The Distro Crisis?
A music market that was once dominated by major labels and prominent subsidiaries is now also made up of middle market companies offering what’s known as the “The Distro Deal.” Here, artists forgo a small portion of their recording income (rather than pay a fee) in exchange for label services, distribution, and occasionally financing. For the artists serviced, this can be a healthy alternative to the traditional record deal. The problem is distributors need to license music at scale to be profitable, and in turn cannot service all the artists they onboard. This information disconnect between artists and distributors is the foundation for what I call the "Distribution Crisis” - and the current ecosystem that's made up of distressed aggregators, confused artists, and a few lucky winners.
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