How to Make Money as a Music Distribution Company With No Investment
Music distributors make their money by creating demand and making the music readily available to fans. Illegal piracy and a competitive market full of struggling record labels cut into profits. Large distributors throw millions into advertising to be competitive. However, there are methods that will allow you to be a player in the music distribution industry without going broke.
Things You Will Need
Recruit local artists with extreme scrutiny. Pass on artists who sound like groups that are already hot on the market. Search for fresh faces and fresh sounds. Approach the artists with a commission-based agreement. Act as a music promoter, and allow the artists to focus on the music. In exchange, you'll take your commission from the sales.
Eliminate printing and packaging costs from your budget. Go completely digital. In "Manufacturing, Distribution and Promotion in the Music Industry," Chris Brophy says, "The main advantage of digital distribution, or digital delivery as it is also known, is that it enables artists and record labels to distribute their work to the public instantly, without many overheads (there are no CDs to press or warehouses needed to store your product)."
Review other online distribution models such as Tunecore and CD Baby to get some ideas on website design. Check out Web design books and graphics books from the library. Design a website that will allow your users to download music directly from your website.
Set up a shopping cart feature on your website. Sign up for a free PayPal business account or an account with Payloadz starting at $5 monthly for the ability to accept credit cards. Follow PayPal's tutorials to link your shopping cart to your PayPal account. Payloadz stores the digital content so you don't have to.
Encourage the sell of usage rights to video game companies, commercial directors, and movie and television producers. Provide additional services to artists. Sign your artists up with Broadcast Music Inc. (BMI), who will collect royalties for your artists from radio stations and other entities that use your artists' music for public consumption.
Act as a music publisher. Watch the credits on movies and television shows carefully. Take notes of company names and producer names. Visit the company websites, and find the email and snail mail addresses of the principals involved. Send them an introductory email explaining how your library of songs may help enhance their next productions. (However, only the copyright owner can actually sell rights to use a song.)
Add as many friends as possible on free social networking sites. Give daily tips on better recording or songwriting for your artist friends. Write reviews for the albums of the artists in your distribution for your circle for music lovers.
Start a weekly newsletter to include longer version of these tips, reviews, and concert listings. Post them on document-hosting websites. Create a newsletters sign-up box on the home page of your website. Email your newsletter to people on your list.
Leave fliers at nightclubs that feature music genres consistent with your music library. Give away CDs to local DJs in exchange for them promoting your library.
Encourage conversation about your library. In "The Guerrilla Guide to the Music Business," Sarah Davis and Dave Laing write, "Word of mouth sells a high proportion of all records. People like turning others on to music they love, and it's a big influence on sales."
Create a media kit or brochure that details what makes your company and titles special among other distributors. Create a brochure that is directed toward convincing retailers that they are missing out if they don't have your titles.
Partner with online music retailers such as iTunes, Amazon, Myspace Music, and eMusic. Check the partner agreements on their individual websites for specific guidelines. The eMusic website has an online form to request selling your songs on its site. The company requires you have 50 titles in your catalog. The popular iTunes requires content providers to complete an application, which takes several weeks to review.
Establish partnerships with digital music kiosk manufacturers. Contact the product development team and negotiate terms to upload all the songs in your library into their machines.