Why Getting 100% Royalties isn’t the Dream Scenario

Too often, the debate over choosing a digital distributor lands on the revenue-share. Can I get 100% of my earnings?  We’re not trying to tell you that earning every penny of every sale is a bad thing, but it isn’t necessarily the best model for every artist. 

The easy explanation is that 100% royalty services have expensive annual fees, some reaching up to $60 per album. This means that every band on a particular 100% royalty service must make at least $60 on each album to break even. They also must do it within the first six months of the album release since that’s usually the window before sales diminish. We know it doesn’t sound like earning $60 in sales off of one album is that intimidating, but artists just getting started rarely meet that bench mark right off the bat. And try meeting that benchmark in year 2, year 3, and beyond. Tens of thousands of artists per year lose money with this business model, nor are they getting the potential promotional support needed from their distributor to maximize sales. 

So that brings us to the traditional model, where the distributor keeps a percentage of royalties, and why ONErpm believes this is the better approach. Here are 3 reasons why:

#1 We have an incentive to promote you and help you succeed, because that’s how we make money

We believe in a collaborative approach with artists. Services that charge annual fees don’t really care if you sell or not, as long as you are paying them. We care about artists’ success because we’re financially dependent on music sales. We’ll do everything we can to help artists achieve their goals. This brings us to our next point.

#2 You’ll make more money with a distributor that promotes you and treats you as a business partner

The 100% royalty is a nice marketing gimmick. While it sounds great at first, its potentially misleading. Getting a feature on iTunes or another service, and having a distributor promote you via its mailing list, social media, blog, etc. is invaluable and will grow your sales. If you sold 100 albums on iTunes and earned 100% royalties without any promotional help , you would earn $700 after iTunes keeps their 30% cut. But with a feature on iTunes, or simply more eyes on your music, you could easily double the number of sales. In this scenario, you would gross $1400 after iTunes’ fee. If ONErpm keeps 15% of that, you still earn $1190. That’s better than what you would have earned going it alone, which brings us to our next point.

#3 Why go it alone? DIY doesn’t mean being alone. Forging the right partnerships is key, and your digital distributor can play a vital role in your career

Services that charge annual fees are ambivalent about your success. In fact, you are their product, not your music. The majority of artists need a service that cares and whose interests and incentives are aligned with theirs.

Other factors to consider:

When choosing the right digital distributor for you, there are other considerations to factor in besides the revenue share percentage, such as: 

• How many stores or services do they work with? (ONErpm has 70+, Tunecore 17, CD Baby 21, you get the picture…)
• What territories do they cover? (ONErpm covers all the iTunes territories, but we also deliver to local services in Brazil, Latin America, Australia, Russia, and even China)
• Is the service truly global? (ONErpm is as global as it gets)
• How flexible is the service? (With ONErpm you control pricing, territories, release dates, which stores to select. Everything is left up to you, giving you full control over how to sell and dsitribute your music)
• Do you have to distribute to all of their stores or can you select the ones you want? (You can pick and choose each store per release)
• Do they make it easy to select different territories? Or is it a forced Worldwide agreement? (With ONErpm you can choose which territories you want to deliver to per release)
• Is the service exclusive or non-exclusive? (ONErpm is non-exclusive)
• How long is the contract for? (Our contracts are for 1 year but you can leave any time if a better opportunity comes your way)
• How easy is it to leave and do they charge take-down fees? (With ONErpm you can leave anytime and we don’t charge takedown fees like other services)
• What kind of relationships do they have with the services like iTunes and do they have a track record of promoting their artists? (ONErpm has a solid track record in getting features on iTunes and other services)
• Can you call them and have a real conversation with an actual person? (Our lines are always open and we have an open door policy - come meet us in person)

At the end of the day, different artists have different needs. If you’re Sufjan Stevens, who has a huge devoted fan base, and release an album on your own, going with a 100% royalty service might be the best option. But the vast majority of artists are better off working with a distributor whose incentives are aligned with their own.

For more info, check out our mission page