Music industry technology provider RoyaltyShare has launched a new lower cost direct digital distribution platform for independent record labels which could eliminate the need for digital aggregators like The Orchard and IODA. (full Royalty Share story here). Just prior to today's announcement I spoke to RoyaltyShare president and COO Steve Grady from MIDEM about the new potentially game changing service.
Record label skepticism over the value of 10-30% fees and long term contracts demanded by many digital distributors has been growing in recent months. "The business is changing almost daily and labels need their options open and keep control," says Grady. At a time when revenues are shrinking "labels also need to monitor their costs". He also questions why "labels should be paid quarterly by distributors who receive money monthly".
RoyaltyShare will charge 5% for the new service. "Our standard deal is a year and labels don't need to be royalty processing customers to use the distribution service," he states. Many distributors demand multi-year contracts at higher rates.
Grady still sees a place for some digital aggregators, "Everyone in the industry must find their own value proposition. Some niche labels maybe be better served by the aggregators...
who can help them understand the landscape. Others will want their product to be placed on every service possible."
RoyaltyShare admits they are being a bit conservative in the beginning about which digital retailers and services they are contracting with. "We want partners who will deliver on what we promise our labels. More than 100 top retailers are part of the launch including iTunes, Amazon and eMusic. More overseas outlets will be added soon.
Read more about RoyaltyShare's announcement as well as an expansion of their relationship with the Beggars group of labels here.