Flat fee distributor TuneCore is launching a new service which enables other music companies to offer worldwide digital distribution using TuneCore's infrastructure.
TuneCore has already helped democratized the music industry by enabling individual artists easy and inexpensive access iTunes, Amazon, eMusic and other download stores while taking no rights, exclusivity or revenue. Now using Google's open API any music company like management, merchandisers and record labels can act as a digital aggregator. From their own sites, these middlemen can, for example, offer the opportunity for artists to "sign themselves" at a variety of costs and benefits including worldwide digital distribution. See a diagram of how it works after the jump.
ANALYSIS: Digital distributors are already feeling downward price pressure as artists and labels ask why they need to pay...
10-30% to get their product on iTunes and other download sites. Some distributors are answering the call with added services like marketing and promotion to mixed reaction and results. Tunecore has already added to that pressure attracting artists from Nine Inch Nails to The Cure who prefer the service's low flat fee no strings attached structure.
Now Tunecore is enabling a multitude of others who can also offer artists value added services ranging from widgets to radio promotion and beyond the same access. I wouldn't buy stock in The Orchard right now.
MORE: Turmoil In Digital Distribution
HOW IT WORKS:
Via TuneCore's new Application Programming Interface (API), approved partners can plug directly into TuneCore's system and develop their own applications powered with TuneCore's distribution, customer support and infrastructure. The partner uses TuneCore's infrastructure to handle file uploads, encoding and delivery of the music files. The artist remains on the partner's website or desktop software application, but TuneCore handles the distribution and offers optional customer support. The partner creates their own pricing and terms and receives status updates as well as basic administrative tools to log in and mange their account. When music goes live, the artists can log in to view sales either at TuneCore directly, or via embedded pages on the partner site.
The API is being launched in addition to TuneCore's existing manual third party and affiliate options. Currently there are 4,081 approved affiliates, each earning a 7% commission on each paying customer referred. Details can be found here.
Click on the diagram to enlarge.
