Those of you in the music "biz" - question about distro deals...

[nwright]

My band has been given some cool possibilities to mull over, and one thing we'd like to know more about is distribution deals. From what we've been "told" by those in better positions is that bands usually solicit for distro deals, not so much labels scouting out distro deal possibilities.

If a label likes a band but is hesitant to sign a full deal, is this when they'd offer up a distro deal only?

Sorry to keep re-asking and rephrasing the same question, but the idea of searching only for distro deals and NOT for the whole shebang is something I don't know much about...If you can't figure it out, we're looking at distro deals ONLY.

 

[006]

Being in a band that is signed on a distro-only label and being friends with another band that is also on distro-only, I'll try to help. Basically, with the increased popularity of the "biz" a lot of people have figured out they can sign bands to a distro-only contract, where they only get the cd's pressed, get artwork done and, of course, find distribution for it. The distro labels typically sign a band based on their assumption that they can invest the money to get, for example, 2,000 cd's made, hoping to obviously recoup that money and turn a profit. Typically we get like 200 cd's every time we sell out of our own stock, meanwhile the label distributes it worldwide through various shops, online, etc. So the deal we have is just that our label presses like 1 or 2 thousand at a time, gives us 200 or so and we get to keep the 200 and do whatever we want. At the same time the label is profiting and our cd is getting out there all over the place. Same thing, essentially, with my friend's band. There are a LOT of distro-only labels that have popped up in the past couple of years. Typically they outsource the pressing and whatnot, but sometimes you will find an outfit that is capable of doing everything in-house. Usually those labels will give you more cds than a label that outsources the work.

The best way to explain it, is that it's the safest deal you will ever encounter. Once you start getting into tour, merch and advertising, through a label that is capable of it, that is when you should start watching your back and making sure you read the contract very carefully.

~006

 

[smy1]

Being in a band that is signed on a distro-only label and being friends with another band that is also on distro-only, I'll try to help. Basically, with the increased popularity of the "biz" a lot of people have figured out they can sign bands to a distro-only contract, where they only get the cd's pressed, get artwork done and, of course, find distribution for it. The distro labels typically sign a band based on their assumption that they can invest the money to get, for example, 2,000 cd's made, hoping to obviously recoup that money and turn a profit. Typically we get like 200 cd's every time we sell out of our own stock, meanwhile the label distributes it worldwide through various shops, online, etc. So the deal we have is just that our label presses like 1 or 2 thousand at a time, gives us 200 or so and we get to keep the 200 and do whatever we want. At the same time the label is profiting and our cd is getting out there all over the place. Same thing, essentially, with my friend's band. There are a LOT of distro-only labels that have popped up in the past couple of years. Typically they outsource the pressing and whatnot, but sometimes you will find an outfit that is capable of doing everything in-house. Usually those labels will give you more cds than a label that outsources the work.

The best way to explain it, is that it's the safest deal you will ever encounter. Once you start getting into tour, merch and advertising, through a label that is capable of it, that is when you should start watching your back and making sure you read the contract very carefully.

~006

I can not see ANY benefit to the deal you described. Other than not having to front costs for pressing ...

 

[Skinny Viking]

I can not see ANY benefit to the deal you described. Other than not having to front costs for pressing ...

It sounds like to me what he is saying is that the distro label doesn't pay them any money as part of a licensing deal to promote/distribute/sell his band's cds. The label is giving them 200 cds per pressing and the band can do as they wish with them, which I'm guessing includes selling online as well as at shows etc ? If thats the case, its not a bad deal provided they can sell the 200 cds everytime the label does a fresh pressing ... for example, if they (the band) are allowed to sell the cds in any way they wish, if they charged $10 a disc, they would make a total of $2000 of the cds given to them by the label. Meanwhile the label is promoting/distributing/etc ... and getting more attention (hopefully) to the band which in turn leads to more sales overall for both parties. If they can continually sell out of the 200 cds they are given for each pressing, it could actually add up to more profit to the band than if they had signed a strict licensing deal in which the band (usually) receives a specific amount of money for the label's right to make as much profit from the release as possible over a specified period of time/territories and so on and so on ...

anyway, its actually a pretty damn good setup but it does mostly hinge on if the band can easily sell its 200 cd share each time

Cheers!

 

[nwright]

Maybe it's different since it's a "distro-only" label? Like I said, I don't know a whole lot about it (yet), so I'm looking to those who've gone through it.

What about labels like Nuclear Blast and Century Media and Metal Blade that do distro deals as well as full deals?

I know a few bands on labels, and they aren't much help because they were offered full fledged deals, and honestly they still don't know much. I also know a band that was signed to an imprint of Metal Blade (Ironclad), and I don't know if it was distro only or what.

What I *think*,from a band perspective, is it allows the CD to reach a much larger audience than it would if we released it ourselves, without the investment and recoup $ figures a larger deal would. Past that, I get lost.

 

[Skinny Viking]

What about labels like Nuclear Blast and Century Media and Metal Blade that do distro deals as well as full deals?

I could be mistaken with this but I believe they almost always only do distro deals for releases that are on other labels. So if you were signed to a label like, I dunno, LMP .... that label is based in germany. Now for arguments sake lets say they don't have distribution in North America, its possible a label that DOES may license a release from LMP for whatever amount of money and then that label can market/sell it in the new territory.

 

[nwright]

Hmm, maybe. I don't want to name names, but I know a band here in the states got a "deal" through Metal Blade, but it was distribution only. They are listed on the Metal Blade site, have been in metal blade ads, etc...Basically coming across as a regular signed MB artist, but the deal is distro-only. That seems confusing to me.

I always thought that labels had agreements or partnerships with distributors (i.e. a seperate entity) that they "sold" their release to as a way to get them into stores...As such, for labels to sign distro-only deals seems confusing. In my mind, I see it as the label is paying the artist to handle the duties of getting the release from said band into the distributors hands, without investing as much into the band itself with advances, and perhaps less promo and visibility as a fully signed artist.

*shrugs*

 

[006]

I think you are hoping to find that a distro-only contract is more than it is...

The reality is that the band is getting worldwide exposure, even if we aren't making a jillion dollars our cd is still everywhere. Those 200-500 that we get from each pressing we are free to do with as we wish. We sell them at shows. It happens that we are pretty popular in our hometown and decently known elsewhere. We typically sell out of the 200 within a month or so from online orders and selling at shows. By that time the label has also sold out and is already pressing more. It's not a bad deal at all actually. The label is the one fronting the money for the cds. The only main difference from a distro-only deal and a full fledged contract, IMO, would be that a full contract would include touring, other merch, tons of advertising and getting your cd into more places than webstores and obscure metal shops.

~006

 

[Andy Sneap]

with a distro deal the return % is much higher as the company doesnt have to advance any money, take risks or do much work. With some you get a return of 50%, others that do press and advertising it can be 40%. Put this up against the usual 10 - 15% from normal label budgets and it can make sense for a smaller band. The way these small labels work is they'll get 4 or 5 bands willing to do this then offer a package to a distribution company, this is alot easier than getting just the distributor on board for one band.

 

[musickey]

My band is getting ready to sign a press and distro deal. The scope of the deal is to give the label the write to sell the album and promote it, while we retain all copy and publishing writes, and we are only bound to the contract for 8 months and at that 8th month period if we wish to terminate the contract we can. It comes down to this in a nutshell, we retain all our publishing writes and if the label wants to make money they are going to have to sell our shit, Even though we are taking a hit on the percentage of net gross, we are still going to be making enough back to cover our replication cost and a little change profit, but getting name recognition is what we are hopefully going to gain, assuming the label actually pushes the album. What I have explained is just a short explanation of what our contract Intel’s, the label will of course give you money for touring, merch, next album whatever but let it be know its just a loan that you will be paying back with your album royalties.

 

[egan.]

What Andy said is what I consider to be a true P+D deal.
What 006 described I consider to be something different.
My bands first release was done 006's way with tribunal where we basically gave them a finished product and they gave us 10% of what was pressed in return. The advantage was the label provided advertising and international distribution which at the time (2000) was much harder to arrange on your own. Money-wise it was a shitty deal but in practice, I think that having that release helped us tremendously with getting signed with Relapse.
That said, if you are selling 2000/month and getting 10% of product as a royalty amd no advance then IMO you are getting hosed. That is a lot of records for a small label.

When we left relapse we actually tried shopping our 2nd record as for a P+D deal because we finished and paid for it w/o a label. We ended up signing a regular contract with Candlelight instead b/c it was the smarted move for us at the time.
My experience with P+D deals is that they are great but your band needs to be a 'sure thing' to pull it off well. For example, Bloodbath has historically done deals on a per record basis to the highest bidder.

 

[smy1]

That said, if you are selling 2000/month and getting 10% of product as a royalty amd no advance then IMO you are getting hosed. That is a lot of records for a small label.

That was my problem with 006's original description ...

 

[006]

Well...we could just be selling cd-rs locally. Or front the cost of everything. That would be soooo much better.

Besides, this is the deal they had going before I ever joined the band. Either way I could care less, I'm just doing it to play shows and have fun.

~006

 

[scorpio01169]

That was my problem with 006's original description ...

even with 006 description how is he getting hosed...they are getting 10% of money that they didn't put up front, and in my book that's not a bad deal. look at it this way you could put up all the money for the pressing of your music and where will that put you....with 1000 or more cd that you may or may not cell in your city only if you don't have the cash to press cds and travel do shows and hope you can sell cds at the show where no one knows you. on the deal they got they have the potential to make $2000 dollars of money they didn't put up plus they get free advertising and exposure where ever that label promotes them.

 

[egan.]

even with 006 description how is he getting hosed...they are getting 10% of money that they didn't put up front, and in my book that's not a bad deal. look at it this way you could put up all the money for the pressing of your music and where will that put you....with 1000 or more cd that you may or may not cell in your city only if you don't have the cash to press cds and travel do shows and hope you can sell cds at the show where no one knows you. on the deal they got they have the potential to make $2000 dollars of money they didn't put up plus they get free advertising and exposure where ever that label promotes them.

Actually as I stated, if you are starting out that sort of deal can be good--for all of the reasons you outlined actually. However if you are selling thousands you are in a position to do much better for yourself financially.
They are getting hosed b/c if you can move thousands of CD's a month you should be getting a good advance to do the record a royalty rate of at least 12%...or no advance and a royalty rate between 25-50%. Obviously something is always more than nothing, but there are also expectations that come with greater sales.

 

[scorpio01169]

Actually as I stated, if you are starting out that sort of deal can be good. However if you are selling lots you are in a position to do much better for yourself financially.
They are getting hosed b/c if you can move thousands of CD's a month you should be getting a good advance to do the record a royalty rate of at least 12%...or no advance and a royalty rate between 25-50%. Obviously something is always more than nothing, but there are also expectations that come with greater sales.

true......but then you have to look at what label is gonna give 50%+ on cd sells on a no advance, even though it's the fair thing to do but....... i don't know how things are now but back when we were offered a deal the only real money we would see was from a shitty tour deal, and with that you had enough to get from town to town and eat.

 

[nwright]

What Andy said is what I consider to be a true P+D deal.
What 006 described I consider to be something different.
My bands first release was done 006's way with tribunal where we basically gave them a finished product and they gave us 10% of what was pressed in return. The advantage was the label provided advertising and international distribution which at the time (2000) was much harder to arrange on your own. Money-wise it was a shitty deal but in practice, I think that having that release helped us tremendously with getting signed with Relapse.
That said, if you are selling 2000/month and getting 10% of product as a royalty amd no advance then IMO you are getting hosed. That is a lot of records for a small label.

When we left relapse we actually tried shopping our 2nd record as for a P+D deal because we finished and paid for it w/o a label. We ended up signing a regular contract with Candlelight instead b/c it was the smarted move for us at the time.
My experience with P+D deals is that they are great but your band needs to be a 'sure thing' to pull it off well. For example, Bloodbath has historically done deals on a per record basis to the highest bidder.

Thanks Egan and Andy...What you've posted is more in line with what I thought.

Egan, we'll be playing a fest with you guys in Indy in September. Looking forward to checking you guys out.

I do have 1 question...can you elaborate on:

My experience with P+D deals is that they are great but your band needs to be a 'sure thing' to pull it off well.

In todays market and smaller labels, what would you consider a "sure thing"? I know bands that are on Metal Blade (not the band I referenced above) and Prosthetic, and they had a pretty good amount of promo, magazine reviews and write-ups and ads, vids on MTV2, etc., and I'd be shocked if they've sold 20K CD's each (i'd estimate either to have sold around 15K if I had to guess)... Maybe I'm wrong, and I surely don't have a clue, but in figuring this all out, I don't know where the line is between success and failure, and if a distro deal would be worth it. I seem to see bands that are low 5 figure sellers with full deals intact and basically live hand to mouth, so as we progress through to the next level, I wonder what would be the best move for a band in our position. Distro talks have taken place, but even then I wonder if it'd be the best thing for a band like ours in our position (i.e. full time jobs that we can't abandon, thus limited touring possibilities, etc.)

 

[nwright]

double post

 

[egan.]

Obviously it's a sliding scale, but if you can break the 5 figure range IMO you are doing pretty well in today's market. My point with the "sure thing" was that you can count on more advertising and also negotiate a much better deal-- or even better get a couple of labels bidding.
For us we liked the idea of doing a record selling it and not being locked into a contract. When it came down to negotiations we found that we could get a bigger advance, more guaranteed advertising, and tour support by going with a traditional deal. Obviously though, these things need to be weighed for your situation.
The hand-to-mouth thing is pretty pervasive. I think that Lacuna Coil is the only band we've toured with where none of the members had to get time off from work to go out. Some labels will put more pressure on you to tour than others.

 

[Chryst Krispies]

I think that Lacuna Coil is the only band we've toured with where none of the members had to get time off from work to go out. Some labels will put more pressure on you to tour than others.

Damn I'd love to see a D.D / L.C show. hahah I must've missed that shit