Global Music Distribution A Buyer’s Market

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The 20,000 Foot View:  The internet was supposed to be the great leveller, enabling smaller artists and labels to reach global audiences in a way not previously possible. But, it turns out that getting music to these global fan bases is not quite so straightforward. Smaller labels simply do not have the resources to enable them to distribute music across all territories. In fact, the compulsion to reach more markets actually increased the need for global capabilities not reduced it. The solution to emerge was third party distribution companies that are now a crucial part of the business of most independent labels. The majors were quick to recognise the opportunity and establish themselves as central players in this fast-growing sector.

Key Findings

• Global distributed music revenue was        million in 2017, representing        of all recorded music revenues and up from        million the prior year
• The market is highly competitive with more than        distributors or labels acting as distributors to other labels
• Standard digital distribution fees average around        of gross, while physical averages around       
• However, pricing varies significantly, with fees paid ranging from as low as        to as high as       
• Major labels account for        of distribution revenue
• The independently owned distributor market was worth        million in 2017
• As Merlin gains scale more labels will be looking for digital supply chain services rather than full suite digital distribution
• Streaming services will likely start striking more direct deals with independent labels, especially those currently distributed via major labels or major owned companies

Companies and brands mentioned in this report: AWA, Beggars Group, Believe Digital, Big Machine, CD Baby, Consolidated Independent, Ditto, FUGA, Kontor New Media, InGrooves, Merlin, PIAS, Sony Music, Spotify, The Orchard, Tunecore, Universal Music, Vivendi, Warner Music