Music Distribution Agreements: What a Distributor Does, How It Charges and What You Grant

The short version

A music distribution agreement is the contract under which a distributor delivers your recordings to streaming services and stores, collects what those recordings earn, and pays it to you after its fee. In a typical self-release deal you keep ownership of the master and give the distributor a license to distribute it, often a non-exclusive one. The distributor handles the recording's money only; the song earns through separate channels.

What does a music distributor do?

Spotify tells independent artists to work with a distributor, and describes distributors as the companies that handle delivery and pay streaming royalties (Spotify for Artists). In practice a distributor:

• Delivers the audio, artwork and metadata to streaming services and stores.
• Assigns an ISRC to each recording and a UPC to the release when you have none. The US ISRC Agency calls an ISRC a permanent identifier for a specific recording (US ISRC Agency).
• Collects what the services pay for the recording and passes it on with statements.
• Often sells extras, such as YouTube Content ID and automatic payouts to collaborators.

Spotify pays recording royalties to whoever the artist chose to deliver the music, typically a label or a distributor, which pays the artist under its own agreement (Spotify royalties guide). So the distribution agreement decides how much of a stream's recording money reaches you.

What does a distributor not collect?

A distributor collects for the master, the recording. The composition, the song itself, earns separately: performance royalties through a PRO and US streaming mechanicals through The MLC (see PROs and registration and how music royalties work). Spotify sends publishing payments to publishers, performing rights organizations and mechanical agencies, not to your distributor (Spotify royalties guide).

The line blurs where one company sells both: The MLC notes that some publishing administrators also offer recording distribution, and tells writers to be sure which services they signed up for (The MLC). CD Baby's artist agreement, for example, puts publishing administration in a separate addendum (CD Baby artist agreement).

Distribution also leaves out SoundExchange, which collects for non-interactive digital radio and pays featured artists directly once they register (SoundExchange; see neighboring rights agencies).

How do music distributors charge?

There are two broad models, and some companies mix them.

• An annual fee, and you keep the royalties. DistroKid lists a Musician plan at $24.99 billed annually, with unlimited uploads for one artist, and says every plan keeps 100% of earnings (DistroKid pricing, checked October 16, 2026). Its distribution agreement still deducts payment processing fees and 20% of money from videos matched through its Content ID service (DistroKid Distribution Agreement, dated June 8, 2021).
• A fee per release plus a commission. CD Baby charges a one-time $9.99 for a single or $14.99 for an album, with no annual fee, and keeps 9% of digital distribution revenue (CD Baby pricing, checked October 16, 2026).

Some distributors take only a percentage, with nothing up front. Whatever its form, that cut is the distribution fee.

A worked comparison for four singles released in one year, using those two price lists and leaving out processing fees:

1. The singles earn $1,000 in year one and $300 a year for four more years, $2,200 in all. At CD Baby's figures the cost is $39.96 in release fees plus 9% of $2,200 ($198), so $237.96. At DistroKid's Musician price it is five payments of $24.99, so $124.95.
2. The singles earn $100 a year for five years, $500 in all. The commission model costs $39.96 plus $45, so $84.96. The annual model still costs $124.95.

A percentage costs more as the music earns more. An annual fee costs more when it earns little, and it lasts as long as you want the releases up. Prices change, so compare current pages.

What rights does a distribution agreement grant?

Usually a license, and you keep ownership. DistroKid's agreement says the rights granted are non-exclusive and that it takes only a limited license to distribute (DistroKid). CD Baby's gives it a non-exclusive right during the term and says the recordings remain yours (CD Baby).

The word "exclusive" matters legally. Under US copyright law an exclusive license counts as a "transfer of copyright ownership" and a non-exclusive one does not (17 U.S.C. § 101), and a transfer is valid only in a writing signed by the owner (17 U.S.C. § 204).

Terms to find in any distribution agreement:

• Scope: this release only, or everything you release during the term.
• Term: a contract year that renews automatically, a fixed number of years, or a term that runs until an advance is repaid.
• Territory: CD Baby's is "the universe" unless you limit it at signup.
• Income: streams and downloads only, or also YouTube, social video and sync.
• Exit: the notice, how fast releases come down, and whether the distributor keeps collecting on earlier streams.

How do you leave a distributor and take your music down?

The agreement sets the exit. DistroKid's term renews each contract year unless you end it, can also end when your card is declined, and when it ends DistroKid notifies the stores to remove your recordings (DistroKid). CD Baby's can be ended by either side on 24 hours' written notice; CD Baby removes the music from its own site and notifies its partners within five business days, but says the artist stays responsible for enforcing removal at those partner stores (CD Baby).

When switching, the usual practice is to deliver to the new distributor first, with the same audio, titles and ISRCs, and take the old version down once the new one is live. An ISRC stays with its recording whoever distributes it (US ISRC Agency). Whether play counts and playlist placements carry over is up to each streaming service.

What are label services and distribution advances?

Some distributors add marketing, playlist pitching and money up front, often called label services or artist and label services deals; the UK's Competition and Markets Authority describes such service deals as an alternative to a traditional label deal (CMA, 2022).

The money up front is an advance, recouped from your share before you are paid more. An illustration with made-up terms: a $10,000 advance, a distributor that keeps 20% of income, and your 80% going toward the advance.

1. Year one earns $15,000. The distributor keeps $3,000, your $12,000 repays the advance, and you are paid $2,000.
2. Year one earns $8,000. The distributor keeps $1,600, your $6,400 goes to the advance, $3,600 is still unrecouped, and you are paid nothing.

Cross-collateralization widens what repays it. If the advance funded a new EP but can be recouped from all your releases with that distributor, your older singles stop paying you until the EP's advance is covered.

The more such a deal asks for, the closer it gets to a record deal: exclusivity over future releases, a multi-year term, a term that runs until recoupment, a larger share, options on later records, or ownership of the masters the advance paid for.

Is a distributor's split the same as a split sheet?

No. DistroKid's Splits feature, for example, pays each collaborator a percentage of a release's earnings, and DistroKid says "you can change the splits any time" (DistroKid). That is a payment instruction set by whoever controls the account. It covers only what that distributor collects, the recording's money, and it does not move with the release to another distributor.

Ownership needs paper the collaborators sign. Who owns the master and what a producer or featured artist earns from it belongs in a producer agreement or a featured artist agreement. Who owns the song belongs on a split sheet, which is what a PRO, The MLC or a publisher asks for.

What are the red flags in a distribution agreement?

• An assignment of ownership, or an exclusive license over everything you record, when you only need delivery.
• A long term, or one that runs until an advance recoups.
• Cross-collateralization across releases or kinds of income.
• No audit clause. DistroKid's agreement, for one, says you have "no right to inspect or audit" its books (DistroKid).
• Content ID on recordings that do not qualify. YouTube excludes content licensed non-exclusively from a third party, among others (YouTube Help), so a track on a leased non-exclusive beat can end up claiming videos by other artists who leased the same beat.

Common questions

Do I need a distributor to get on Spotify?

An independent artist usually does. Spotify tells artists to work with a distributor, or to rely on their label, which will already have one.

Does my distributor collect my publishing royalties?

Not as part of distribution. Performance royalties go through a PRO, and US streaming mechanicals through The MLC or a publishing administrator. Some distributors sell publishing administration separately, under its own agreement.

Do distributors own your music?

Under a typical self-release agreement, no: you license the recordings and keep the masters. Some advance and label services deals take more, up to ownership of the recordings the advance paid for, so read the grant clause.

What is the difference between a distribution deal and a record deal?

In a distribution deal you fund the music, keep the masters, and pay a fee or a percentage for delivery and collection. In a traditional record deal a label funds the work, takes a larger share and often owns the masters. Advance deals sit between the two.

What happens to my music if I stop paying my distributor?

It depends on the model. Under DistroKid's agreement, when the term ends it asks the stores to remove your recordings. CD Baby charges once per release, with no annual fee.

Do I need a lawyer for a distribution agreement?

Many artists read a standard self-release agreement themselves. For an exclusive deal, an advance, a term that runs until recoupment, or any grant of ownership, an entertainment attorney's review is worth having. keysig is not a law firm.

Where keysig fits

keysig does not draft distribution agreements; the distributor supplies its own. keysig drafts the paper a distributor, a label or a buyer asks for when they want to know who owns the master and the song.

• The Producer Agreement says who owns the recording: a work made for hire, or the producer keeping ownership and licensing it, exclusively or not. It sets the producer's points on gross or net receipts, and the artist and the producer sign.
• The Featured Artist Agreement names who owns the master and the featured artist's royalty share, if any.
• The Session Musician Agreement treats the musician's performance as a work made for hire, with a backup assignment, so they hold no ownership in the master.
• The Split Sheet records each contributor's share of the song, with their role, PRO, IPI number and publisher, for up to eight contributors. The shares must add up to 100%, and every named contributor signs.

If you are not sure which a release needs, start with which agreement do I need. Take the distribution agreement itself to an entertainment attorney before signing if it is exclusive, comes with an advance, runs until recoupment, cross-collateralizes, or asks for any ownership of your recordings.