DISTRIBUTION
What does it mean?
What can a good distributor do for you?
How should you go about choosing one?
DISTRIBUTION by Victor Stent
With the advent of the digital economy, many traditional business structures have found their monopolies challenged and their business methods increasingly rendered ineffective and irrelevant. The music industry is not immune to the impact of this digital revolution and, as many artists are now realising, the balance of power is shifting in their favour for the first time in over 25 years. This profound change came in a rush, as artists embraced the digital era and its possibilities much more quickly than the corporate music industry. But, like the TITANIC, the industry majors can't alter course quickly enough to avoid the looming danger. Now artists can perform, record, mix, and master their music as well as do the cover art, all in the digital domain and for a fraction of the price it used to cost. This, and the significantly reduced cost of short-run CD pressing, have made it possible for NZ artists to now record and release their own albums all without the traditional 'record deal' and the compromises those deals inevitably entail.
However D.I.Y. CD releases have limitations. Access to other distribution channels becomes necessary, as selling at gigs and to friends and family will rarely cover the initial costs. Again, the major's monopoly is already being challenged here by independant distributors and, in the near future, we'll see direct selling to consumers via the INTERNET and, eventually, by direct-download, without any software ever being produced. In NZ, the first stage of this revolution is already well under way, with many artists realising their dream of recording and releasing their own CD without a 'record deal'. However, to recoup costs, a significant number of CDs must be sold and to do this, the traditional retail channels must be accessed, as this is still where over 95% of music sales take place here in NZ. Here's an easy 10-point guide as to what services a good NZ distribution company should be able to provide:
1. REPRESENTATION. Artists are usually not the best people to sell their own work. Professional salespeople know how to combine forceful selling skills with effective public relations that will create product awareness at retail. These are the people who sell to the consumer and they must be informed, enthused and enlisted.
2. GEOGRAPHIC DISTRIBUTION. There are less than 200 viable music retail stores in NZ and a distribution company will cover them all on a regular cycle, gathering orders and soliciting reorders. They are equipped and ready to supply at all times.
3. RETAIL CONVENIENCE. Both chain-stores and owner-operators hate paper work. Instead of dealing directly with many individual suppliers [i.e. the artists], they universally prefer to buy from a small number of large suppliers who can provide most of their requirements. The result less invoices to process and much cheaper freight [i.e. more items per delivery will lower the per unit freight cost].
4. ACCOUNTING. A distributor will be more able to collect money owed by retailers as they have new products every month that the retailer will need and the retailer will pay due accounts to ensure supply is maintained. A regular payment schedule can then be set up for the artist.
5. CREDIBILITY. Retailers are generally more likely to buy in a release if it has the security of a back-up service and the credibility of a known distributor involved [e.g. easy reordering, return of faulty stock, customer orders].This more positive perception will also ensure a greater instore commitment to selling the release and then, more importantly, reordering it.
6. KNOWLEDGE. A distributor will have the valuable marketplace knowledge and experience that can only be accumulated over time. They can assist with advice on everything from essential components of the cover art [e.g. barcodes, catalogue number, copyright], to manufacturing [e.g. duplication deals, mastering], to promotions and marketing [e.g. charts, media, advertising].
7. AFFILIATIONS. Every distributor who is a member of R.I.A.N.Z. automatically qualifies their distributed artists to apply for their share of R.A.P. FUND income [set up to share airplay income amongst NZ artists] and to apply for NZ ON AIR grants. R.I.A.N.Z. members may also pay publishing royalties due on controlled compositions after sales have been made, whereas independant releases must have royalties paid upfront on the amount of stock produced. 8. CHART. The NZ chart is administered by R.I.A.N.Z. and it reflects the weekly sales of it's members products each week, ranked in descending order. To qualify for and then successfully compete in the charts every week, the consistent and experienced presence of a committed distributor is essential.
9. CAREER. A distribution company will have valuable industry connections, both within NZ and overseas and their representation and track record will help to provide the credibility necessary to secure overseas interest and possible release.
10. FREEDOM. Independant distribution is just that. The artist still owns their career, their recording and their stock. They can do it all the way they want and need not wait around to be 'signed'. The distribution company works for the artist, charging a commission on each unit sold [usually based on a % of wholesale price], with the majority of income returned to the artist. The time-consuming and specialised duties of selling, supplying and administering money are what the distributor is paid to handle. The artist is then free to do what they probably do best make music, perform it and create demand for their releases!!
Ultimately, the key to real commercial success in the music industry comes down to two things a hit, and the people on board who care enough to make it a hit. Enlisting a team of the right people who can help unlock the sales potential of an album must be the primary goal of any artist seeking financial success in the commercial music industry. Whether to choose a 'major' or an ÔindependantÕ as the team to create success for a project is an important decision, but at least these days NZ artists do have a choice!
(Victor Stent has previously spent 5 years as Managing Director of Polygram NZ and 5 years as Operations & Marketing Director for Virgin Retail Asia/Pacific).