The Distribution Battlefield

The little guy vs the big guy. I.e., Corporate labels vs indie labels.

Before we dive into the battlefield of distribution. Let’s take a quick look at streaming.

When looking at the digital side of the music industry, streaming is a wicked beast; one where the independent little guy is, going to get the short end of the stick. The big guys, with their bigger contracts, working with streamers like Spotify, Apple Music, SoundCloud, and the like, hold the market share making it pretty tough for independent artists and labels to get a fair shake when it comes to gains in profit.  This some time ago, spurned a Boston-based antitrust outfit to publish a study questioning the fairness and practices of the top streaming services, especially Spotify, exploring the advantages toward artists signed to major labels.  In a nutshell, revenues from streaming had quite a large growth in earnings, and artists, not signed to major labels, were saying that they felt they were not treated fairly, given how the industry had a major growth in revenues.  To get a deeper understanding of the report, check out this article from 2021 with links at Digital Music News.com.  “Yes, Music Streaming Platforms Heavily Favor Major Label Artists — Now There’s a Study to Prove It”, by Dylan Smith.

 With that said, the dynamics within the music industry between the major labels and indie labels, has changed significantly since the rise of streaming platforms, and how music has evolved with the new forms of digital distribution.

 The Dynamics of Distribution

The major labels have the greatest advantage in control and resources.  Universal, Sony, and Warner all have a massive advantage through their global reach into many territories with their tentacles well placed into the many facets of the industry.  And given these, well-established channels, these major players can secure top-tier placements on all the major streaming platforms, radio, satellite, and other major media outlets.

The majors also have the best channels for gathering data and valuable analytics.  Because of this advantage, they can optimize this vast amount of data in their marketing and distribution strategies guaranteeing that their artists always get premium exposure in the markets.

When holding a market position, the major labels, if they don’t have an internal distribution setup, will jump in bed with large distributors striking a partnership, guaranteeing efficient and worldwide distribution.

On the other hand, we have the indie labels.  Indie labels are known for their guerrilla marketing tactics, agility, and being smaller organizations. They are unlike the large cumbersome behemoth major labels and are thus flexible and unorthodox in their marketing and distribution methods. Because of their size, they will most often zero in on a niche or unique range of music genres that will hold a distinct spectrum of audiences and garner a lucrative market share.

Great things come in small packages.  With that, indie labels can be more artist-centric, giving more freedom for artist creativity, and flexibility in arrangements on finances.  This freedom gives the artists the reins to hold on to their artistic integrity, an attractive asset to those who value their art over commercial success and establish their legacy on their terms.

The market share of streaming, for indie labels, has grown quite a bit, garnering close to 35% of the market share according to past data. Between 2019 and 2020, the data suggests that the Indies' share of streams grew from some 28% to about 30%.  It would be interesting to see the latest data on growth today.

Battlelines and Trenches Drawn Over the Struggles for Power

Taking food off another man’s table is fixin’ for a fight.  And when it comes to dominating the market, the major labels still call the shots.  But the Indies are gaining ground and reducing the no-man’s land between trenches.  Since the introduction of the streaming platform, the battlefield has somewhat been leveled, creating an environment for indie labels to broaden their range and capture a larger global audience thus reducing the need for large and expensive distribution channels. This also opened up opportunities and guerrilla marketing strategies for the small guys and gals out there.

However, when it comes down to controlling the ‘channels of distribution’, the major labels still have the upper hand.  So, the industry gatekeepers hold down the distribution system for the big guys, thereby creating a ‘new front’ where the Indies are exploiting various digital platforms and direct-to-fan strategies as a workaround to get that nut.

With independence comes freedom and indie labels can take risks that major labels will hold back on or overlook with a particular talent or genre often putting the indies in a position to be the trendsetters.  Indie labels often introduce new genres and artists, thereby influencing the culture which, when the artists gain some traction, will blow up on the mainstream and become a prominent act or influence.

And in Conclusion

The major labels will continue to hold the majority of the market taking command of the battlefield, while the Indie labels will continue, in the struggle of carving up new trenches for considerable growth in the music industry.  The competition is stiff and ‘necessity breeds innovation’, but this can only bring about more diverse choices for artists and music lovers alike.

Express Guitar... The Fast, Easy and Effective Way to Learn Guitar.
To learn more click here.