Distributors - Physical vs Digital

Physical Music Distribution

Physical music distribution involves the process of manufacturing, promoting, selling and delivering music in tangible formats such as CDs, vinyl records and tapes.
In the pre-digital era, this form of distribution commanded the entire music market and is traditionally overseen by record labels.
Record labels work together with music distributors who secure deals with retailers, manage inventory, deal with returns and sometimes help with the promotion of the music product.
Despite the rise of digital music, physical music is still prevalent especially in the sales of vinyl records, which have seen a resurgence due to their perceived sound quality and nostalgic appeal.

Digital music distribution refers to the sale of music in digital formats through downloading or streaming.
No physical product is exchanged in digital distribution, which eradicates issues of inventory management and return of unsold stock.
With the emergence of streaming platforms like Spotify and Apple Music, digital distribution has significantly expanded.
Artists can directly upload their music to these platforms, or use digital distribution companies. These companies distribute music to various online platforms, and in return they take a cut from the artists’ royalties.

While both forms of distribution aim to deliver music to the consumers, they differ significantly in methods, costs, and reach.
Global reach: Digital distribution has a wider reach as there are no geographical boundaries, unlike physical distribution which is limited by geography and shipment costs.
Profit margins and costs: Digital distribution generally has higher profit margins, owing to low overhead costs and no manufacturing or shipment costs.
Speed and accessibility: Digital distribution offers faster accessibility to music and new releases can be made available instantly across the globe.

Physical music distribution: The process of making music available to consumers in physical formats such as CDs, vinyl records, or tapes.
Digital music distribution: The process of making music available to consumers digitally, usually through downloads or streaming.
Music distributors: Entities that help labels (or independent artists) to get their music on platforms or into shops.
Record labels: Companies that market music and music videos.
Streaming platforms: Services that allow users to listen to music online.
Digital distribution companies: Companies that distribute music to various online platforms on behalf of artists or record labels.
Sound quality: The perceived audio quality of a music track.
Nostalgic appeal: The sentimental or emotional attraction to artifacts from a past time period, such as vinyl records.