Tunecore has paid musicians $330M in royalties

Tunecore, one of several intermediaries that provide a gateway to digital distribution for independent musicians, announced on its blog that 330-million dollars has been paid out to musician clients during the company’s seven-year history.

Tunecore represents an interesting and significant service category in digital music. Its rise, along with that of CD Baby and others, emblemizes the replacement of old-world career agencies with technology platforms, just as digital listening has displaced analog music products. Tunecore and its ilk are distributors to retail outlets, but also have replaced A&R departments and artist managers to some extent. 

Tunecore’s essential business is putting recorded music into streaming music services like Spotify and Rhapsody, and download stores like iTunes and Amazon. Its clients are indie artists who own their own labels and fully control their recorded masters. The core values are distribution and bookkeeping. For relatively low fees, aggregators like Tunecore and CD Baby place music in large portfolios of commercial outlets, track streaming and purchasing, issue earning statements, and write royalty checks.

This middleman service is alluring to musicians seeking exposure and a toehold in the music business. However, for many who reside down the long tail of available music, those low fees are never recouped in fractional payouts from streaming and downloading. From that sad outcome stems much of the controversy surrounding the economics of streaming music services and the fairness of artist royalties.

Operating profit might be elusive for music services like Spotify which pay royalties, and for indie musicians who receive royalties. Intermediaries like Tunecore (which is privately owned and venture-funded) sit in a sweet spot between the two, passing content in one direction, funneling money in the other direction, and collecting a fee. It’s a valuable service. But some musicians wonder: Wasn’t the Internet supposed to eliminate intermediaries?

Brad Hill