Spotify’s direct distribution deals are only a threat to those aggregators stuck in the past

The following MBW blog comes from Lee Parsons (pictured). Parsons is the CEO and co-founder of UK-born independent artist services company Ditto, which has worked with artists such as Stormzy, AJ Tracey and Dave over the past few years – and is currently being kept busy as Chance The Rapper’s digital distribution partner. Parsons, whose company delivers music to likes of Spotify, Apple Music, YouTube, Pandora, Deezer, Amazon and TIDAL, responds to today’s news that Spotify has directly entered the digital distribution space via its Spotify For Artists portal.

We loved Spotify yesterday, and we still love Spotify today.

I’m not going to lie: the news that the world’s biggest subscription streaming platform is now accepting directly-distributed music did come as something of a surprise.

(It can’t just be me. In fact, I know it’s not – because my phone hasn’t stopped ringing since MBW’s story hit my inbox.)

But let’s not pretend this is a completely-out-of-the-blue shocker. It’s not; it’s been a long time coming – literally.

Two years ago, the Financial Times reported that Spotify was in ‘advanced talks’ to buy SoundCloud for somewhere approaching $1bn. Obviously, Spotify had designs on SoundCloud‘s unique strengths concerning user-uploaded audio content.

In the end, the price of that deal didn’t match the opportunity.

But Spotify clearly never forget about that opportunity – and, today, it’s gone it alone.

What this move means for independent artists and their relationship with Spotify is yet to be seen. Ultimately, it strikes me as a natural continuation of the news that Spotify is now doing experimental direct licensing deals with independent acts.

Where I might have some specialist perspective on today’s news is when it comes to its impact on companies like Ditto – not to mention CD Baby, Distrokid etc.

I was actually asked this very question by MBW in an interview back in July‘Spotify talks a lot at the minute about a two-sided marketplace, which sounds a lot like SoundCloud… is that a threat to you?’

I completely stand by my answer: So long as you want to be on all the services and get a level of expertise across all of them, as well as things like radio and press, you will always need a [third-party] partner.

Today, though, has really sharpened my mind on this subject.

Ever since Ditto was founded in 2007, we’ve argued (and fought) to ensure that artists have real choice in the marketplace.

The paths to distributive dominance were locked down by the labels, particularly the majors, for a long time. Those days have thankfully long gone, and today, unless you’re adding real, provable value to an artist’s career, you’re toast.

Spotify’s announcement today brings yet more choice to the table – good thing. And it shines an even brighter torch on whether certain artist partners are really contributing enough to an act’s career to justify their fee – another good thing.

“Any record label or so-called ‘aggregator’ that still has ‘digital distribution’ as their sole core USP in 2018 is doomed to fail.”

Quite frankly, any record label or so-called ‘aggregator’ that still has ‘digital distribution’ as their sole core USP in 2018 is doomed to fail. Digital distribution has not been a magic potion for a decade. In 2018, it’s the bog standard, bottom-of-the-heap, anyone-can-do-that expectation.

We spotted this fact at Ditto a few years back and, I’m thankful to say, have invested heavily in expanding our global footprint and expertise – with 19 offices around the world today.

We also doubled down on our ability to promote and market artists on new media (social, YouTube etc.) as well as ‘old’ – radio and other key broadcast partners. And we’re currently pumping resources into taking optimum advantage of blockchain, which will inevitably play a huge role, in some form, in the music industry of the future.

We’ve done all of this because, every day, we need to prove to our artists what we can do for them that they can’t do themselves; that we’re getting them noticed, and appreciated.

That is the very nature of a healthy partnership.

Striking a deal with any label or ‘aggregator’ worth its salt today should mean one thing to an artist above all else: when your career trajectory starts to rise, there are multiple layers of support and promotion behind you.

If you’re a true partner to an artist, it’s your No.1 job to make the most of their moment – both locally and globally. Anything else is a failure.

Spotify is completely artist-focused, and that chimes with our world view too. But it’s also worth remembering that the land of entertainment media today is ultra-competitive, multi-faceted – and very hard to navigate.

Spotify isn’t just battling Apple Music, Amazon, TIDAL, Pandora, Deezer and YouTube – they’re also battling TV shows, Instagram, Disney, Netflix, PlayStation, Marvel… and things I (and you) haven’t even heard of yet.

The point being: if an artist wants to kick-start their career on a single streaming platform, using a free upload tool, that’s completely understandable. You have to start the fire somewhere.

But if that same artist wants to give themselves the very best chance of lasting success, of being noticed and remembered above all the noise; if they want to be supported by an incisive global strategy across multiple consumer-facing partners, they should think really hard about picking the best ally.

In today’s deeply fragmented digital media and entertainment marketplace, backing one horse is a very bold strategy.

If you ask me, the smartest thing to do is to spread your bets.Music Business Worldwide

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