“Remember when your mom used to tell you that if it is too good to be true it usually is? Well, I think that this is the case with some of the DIY services out there, especially the ones offering to distribute all the music volume you want for a fixed fee. Inevitably, this model breaks down as their fixed costs rise higher than the low fees they charge you and artists and labels will be stuck without a distributor or, worse yet, out some money that is never passed through. There are some great DIY services out there, like Reverbnation, that are part of long-term, stable companies that aren’t a bunch of smoke and mirrors. ” – Robb McDaniels, CEO, INgrooves
Now, unless you know the digital distribution field quite well, this seems like he could be talking about anyone. But there’s only one company out there that operates this way. And that’s DistroKid. For $19.99, any artist can distribute unlimited songs or albums to iTunes, Spotify, Deezer et al. Both the founders of CD Baby and Tunecore have publicly endorsed DistroKid (since leaving their companies). Derek Sivers of CD Baby wrote “This is exactly what I would have created if I didn’t sign a non-compete agreement when I sold CD Baby. I’ll be sending everyone I know to DistroKid, now.”
Philip Kaplan, the CEO of DistroKid, happened to spot this and penned his response. He fired back:
“Your concern that we won’t be able to keep up with growth, is based on a mistaken assumption that we incur some sort of incremental cost with each artist or album we distribute.
Our entire process is automated.
I’m new to the music industry. But I’m not new to scaling large technology businesses. A previous company I founded, which had around $100M in sales and was later acquired, was a digital ad network called AdBrite. We handled more than 1 billion pageviews per day. Each pageview performed a real-time auction to select the best ad from millions of potential ads—and did this all in less than 50 miliseconds per pageview.
If DistroKid processed every single album on Earth, every day, forever, it wouldn’t reach a small fraction of that scale (so far we’ve distributed over 100,000 songs for 20,000 different artists). ” – Philip Kaplan, CEO, DistroKid
With those serious numbers that DistroKid has acquired in under a year, it’s no wonder INgrooves is worried and shooting out a bit of FUD.
Kaplan recalled a Forbes article he read on McDaniels years ago where he was quoted saying “People thought I was nuts. I didn’t know anything about the music industry. I just said ‘Here’s how I think the business should operate.” Kaplan admits, that now he’s the new guy. DistroKid launched less than a year ago. Kaplan wrote:
“But this time, you’re the incumbent. And I’m the one you’re calling nuts.”
Kaplan also stated “you endorse ReverbNation (without disclosing that they use your company, INgrooves, for distribution……), but I think you might find DistroKid inspiring if you gave us a try.” He finished his rebuttal on a cheeky note:
“One last thought- If INgrooves has an incremental cost problem, which it seems you may, perhaps you should use DistroKid to distribute your artists’ music. We’d be happy to have you as a customer and partner. I’m serious.”
Your move McDaniels.