A digital music distributor's function is to serve as an intermediary between artists (or labels) and online music retailers such as Spotify and iTunes. Their main asset is that they greatly simplify the digital release process by being able to distribute your music to a large number of outlets and streaming services. This saves you from having to deal with every single one of them individually, and subsequently helps you keep track of the otherwise greatly dispersed royalty distribution.
Another benefit of digital distributors is that most of them allow you to have access to valuable sales and demographic data concerning your music. This helps artists and labels keep track of how well their releases are doing, and gain insights into their listerner's characteristics, such as their home country, and when one of your songs are added to a streaming playlist.
In return for their services, digital distributors either ask for a one-off fee, or take a percentage of distribution income. The height of this percentage varies and usually depends on the specific type of services the distributor offers.
Picking one (DIY distributors)
There are a few key differences between digital distributors which can make choosing the right one a bit confusing. The most important difference, however, is the level and type of service a distributor provides. Here you can basically distinguish two types of distributors: one which caters to the DIY artist, and the other one which is specifically useful for labels. The DIY category contains distributors such as AWAL, Tunecore, and ReverbNation.
AWAL, a subsidiary of Kobalt Music Group, charges a relatively high 15% commission. This high rate can be explained by their promise of helping artists with marketing and promotion. What also distinguishes AWAL from its competitors is that it does not simply take on any artists. Instead artists or labels have to go through an application procedure and are subject to critical examination before they are admitted into the AWAL system.
Tunecore, on the other hand, takes on basically any new artist and does not require an application procedure. However, this also means that they do not invest in helping you promote your music. What they do provide is revenue advances to a select number of artists who have a proven track record of doing well on digital outlets.
In terms of costs, Tunecore does not take a commission but instead asks an annual fee in return for a membership.
Reverberation, similarly to Tunecore, does not take any commission. But unlike Tunecore or AWAL, they do not supply funding to artists who are showing signs of success on their platform. A specific strong point about this distributor is that it allows the artist to submit it's music to a database of potential interested parties, such as labels and advertising agencies.
Picking one (Label distributors)
It is important to understand the distinction between distributors who cater to the DIY and the ones who are specifically aimed at helping labels and more established artists. This is because the latter usually offers more services, but also is selective in its applicants. The most prominent names in the Label category are the Orchard, Ingrooves and Believe Digital
The Orchard usually works with more established artists and labels. One of its great benefits is that it also does physical distribution, and, being a subsidiary of Sony, has a global reach. Its service includes "marketing, advertising, sync licensing, video monetization, performance tights services and more" (The Orchard, 2019). Thus, the Orchard has a much more hands-on service model than the previous three examples. However, this also means that they do not take on any artist, and certain qualifications are recuired.
Ingrooves also incorporates a wide range of services which can be very useful, such as product management, promotion, synch licensing and rights management. With an extensive physical distribution option, it has a service offer which is quite similar to that of The Orchard. And, subsequently, only does partnerships with record labels or established artists.
Believe is the parent company of TuneCore, and involves "custom-made digital release strategies for artists & labels across all platforms increasing visibility", apart from offering the same services mentioned above. One major difference is that Believe is solely a digital company, and does not offer physical distribution services.