Distribution: Flat Fee vs. Percentage Model (The Great Debate)

[Kevin_Rivers]

Hi guys,

 

I'm Kevin Rivers (CEO of Venzo Digital). I see that many artists uses percentage base distribution (like CD Baby) while others uses flat fee distribution (like TuneCore). Here is my question to you:

 

Q: Which model do you think is better? And why?

[daddymack]

the one that pays the most the quickest...

[niceguy]

 

Hi guys, I'm Kevin Rivers (CEO of Venzo Digital). I see that many artists uses percentage base distribution (like CD Baby) while others uses flat fee distribution (like TuneCore). Here is my question to you: Q: Which model do you think is better? And why?

 

 

Howdy Kev. I'll reply, even though as a longtime resident of these forums, I'm not sure I like the idea of data mining and market research at these forums. But that's for the moderators to decide, and daddymack seems cool with it.

 

I use TuneCore because the flat-fee makes SO much more sense. Once the flat fee is recouped, it's pure profit. With a percentage model, you lose colossal amounts of money (if you sell colossal amounts of product). This is basic business sense, and I simply cannot comprehend why someone would EVER sign away a percentage of their profits when they instead could pay a small flat fee.

 

Also, I don't trust new digital distributors. I use TuneCore because they've been around forever, they're well-known, and I feel secure with them. For example, I wanted to get on Rdio, but TuneCore doesn't distribute there. So I used Oseao Media Group, JUST for Rdio. Lo and behold, that distributor folded a few months later, and hundreds of clients were freaking out because they lost so much royalty money and there was no recourse. (I was fine, though, because my sales come from iTunes and Amazon, and TuneCore distributes me there).

 

So, you're entering a ferociously difficult field of business, and honestly, I would never, EVER recommend anyone to sign with a small, new digital distributor. There's too much at stake.