Distribution
By Ben McLane, Esq.
The key to selling records is to find a way to place them in stores. This is where
the concept of distribution comes into play. Distribution can come in the form of
either major or independent distribution. Since major labels have distribution
down to a science, that will be the focus of this article.
Assuming that an artist signs to a major label, the major label will then distribute
the finished record. Another scenario for major label distribution is for an
independent label to be distributed through a major label. This usually happens
only if the independent label has several acts on its roster (distributors are
interested in a steady flow of product). Occasionally, a major label will sign
an act off an indie and re-release the record under the major label banner.
Major labels utilize major label distribution systems to position records in stores.
These are giant conglomerates known as "the big six" which consist of: BMG, CEMA,
UNI, Polygram, Sony, and WEA. "The big six" in turn distribute a multitude of major
and independent labels. Each of "the big six" has a regional warehouse in each
major metropolitan area from which the records are distributed to local record
stores and other outlets. It is the distributor's obligation to (1) wherehouse
inventory, (2) solicit sales from stores, (3) fill orders, (4) process returns
(unsold records), (5) bill/collect, and (6) generate sales reports.
Major label distribution has some other players that contribute to sales. One stops
are middlemen who buy records from labels and then make them available to local record
stores that prefer the convenience of one stop shopping. Rack jobbers are middleman
that buy records from labels and then stock them in the racks that they operate
within retail stores. Chain stores such as K-Mart buy records from labels and
then place them in their stores. Record clubs buy from labels and then resell
to their members at discount prices.
Independent distribution can put records in stores, although to a lesser extent.
Some independent distributors have huge territories, while others are much more
regional. Independent distributors generally distribute the product of smaller
labels. Occasionally, they will distribute an unsigned artist's record if they
can be convinced that there is potential for substantial airplay and sales (the
artist will probably have to generate some sales first). A list of independent
distributors can be found in the Yellow Pages of Rock and The Billboard
International Buyer's Guide.
As the reader can now see, without distribution, the public would never have an
opportunity to buy a record. Further, an artist fortunate enough to obtain a
deal which has major distribution in place stands the best chance of achieving
economic prosperity in the music business.
Copyright 1998, Ben McLane
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