A surprising shady tale regarding DistroKid

BradHoyt

Active Member
Just saw this recent video... Looks like you may not want to use DistroKid if you're outside the USA since they can, on a whim, withhold 30% of your earnings for tax reasons.

 
OP
BradHoyt

BradHoyt

Active Member
Is this one of those situations where it turns out all that was needed was a W8-BEN form to be filled in?
Doesn't look like it. lol
If that were the case, seems they could have told the guy in a reply to his emails.
 

Beluga

Arctic and sub-Arctic cetacean
It looks awfully like an 8W-BEN situation. Actually any business in the US can withhold the 30% taxes if you can't prove you pay taxes within a country the US have a tax treaty with. They should have informed him though and requested clearly this form. I believe CDBaby was pretty clear they needed the form when I signed up there. It probably is possible to reclaim the taxes retroactively.
 

gamma-ut

Active Member
Not very long on the search engine pulls up these:



Brazil doesn't appear to have a tax treaty, or at least one I can find - this is where this guy is, right? I'm not up for having to sit through 20-odd minutes of him ranting at the camera just to find out but there was someone saying it was Brazil in the comments. In which case, this is stuff that goes on his tax form at the end of the year rather than getting sorted upfront with a W8. Imagine my surprise to find out this probably didn't happen randomly or as the result of some scam.
 
Last edited:

Beluga

Arctic and sub-Arctic cetacean
Well if there is no tax treaty it's a difficult position to defend then.

Talking about shady, since this guy only does covers, does he pay the composers for their work? Do the streaming services make the difference between the composers and performer as the PRO do?
 

Polkasound

Senior Member
If that were the case, seems they could have told the guy in a reply to his emails.
I agree. It looks like DistroKid is being unnecessarily unhelpful. If a tax form is required to avoid having money withheld, that makes sense, but DistroKid is being suspiciously evasive when it comes to conveying that information.


Do the streaming services make the difference between the composers and performer as the PRO do?
Yes. Once you digitally distribute your cover song, you are no longer responsible for paying digital mechanical royalties (unless you also make the song available on your own website, in which case you are acting as an independent distributor which would require a license.)
 
I always wondered in the end if anyone in the film music realm (or any kind of pop music) makes some decent money by featuring themselves on spotify and the likes through Distrokid.

Seems most of so called "artists" just want to be present on a platform which by the way seems over saturated...

Thanks for sharing this guy's experience. Most of people I know publish everything through this service, as it's still pretty much the reference.
 

Polkasound

Senior Member
I always wondered in the end if anyone in the film music realm (or any kind of pop music) makes some decent money by featuring themselves on spotify and the likes through Distrokid.
I'll share part of an article I'm writing. I'm discussing the polka music industry, but the info applies universally to a lot of independent artists in all genres:

"Twenty years ago, if someone wanted to hear all 18 songs on a band's album, they'd pay the band $15 for the CD. Today, if someone wants to hear all 18 songs a band's album, they'll stream it on their favorite subscription service and the band will earn about 5¢ in royalties. That's a profit reduction of approximately 99.6%. At this rate, a band would need to achieve about 5,000 song streams to equal the sale of just one $15 CD. To recover their recording expenses, they'd have to achieve anywhere from 350k to 1.5 million song streams."
 

reimerpdx

Meat Popsicle
I'll share part of an article I'm writing. I'm discussing the polka music industry, but the info applies universally to a lot of independent artists in all genres:

"Twenty years ago, if someone wanted to hear all 18 songs on a band's album, they'd pay the band $15 for the CD. Today, if someone wants to hear all 18 songs a band's album, they'll stream it on their favorite subscription service and the band will earn about 5¢ in royalties. That's a profit reduction of approximately 99.6%. At this rate, a band would need to achieve about 5,000 song streams to equal the sale of just one $15 CD. To recover their recording expenses, they'd have to achieve anywhere from 350k to 1.5 million song streams."
...and the effect compounds. Not often will people stream the entire album, and listen to it on repeat, like they would have a physical album.
Streaming is not going to make as plebs rich ;)
 
I'll share part of an article I'm writing. I'm discussing the polka music industry, but the info applies universally to a lot of independent artists in all genres:

"Twenty years ago, if someone wanted to hear all 18 songs on a band's album, they'd pay the band $15 for the CD. Today, if someone wants to hear all 18 songs a band's album, they'll stream it on their favorite subscription service and the band will earn about 5¢ in royalties. That's a profit reduction of approximately 99.6%. At this rate, a band would need to achieve about 5,000 song streams to equal the sale of just one $15 CD. To recover their recording expenses, they'd have to achieve anywhere from 350k to 1.5 million song streams."
I wonder what the solution could possibly be to this situation. Once consumers are used to paying a low monthly fee to services like Spotify, where can you go from there, other than Spotify willingly paying a much higher percentage per play, which I don't see happening. The old model was definitely flawed as has been detailed in various media, but at least the money-making potential was reasonable for professional musiclans. Sounds like there's never been a better time to leave the music industry.
 

Polkasound

Senior Member
I wonder what the solution could possibly be to this situation.
It's unfortunate, but it's technically not a problem that requires a solution. Interactive streaming is just another form of radio, and radio royalties were never intended for independent artists to earn much money from. The sad truth is that the music industry has changed so dramatically in the last 15 years, that the days of music sales as a source of profit are over for 99.9% of artists.
 

GNP

Member
It's shit like this that is why I prefer commissioned music projects, rather than entrusting production music to some label.
 

Beluga

Arctic and sub-Arctic cetacean
I agree. It looks like DistroKid is being unnecessarily unhelpful. If a tax form is required to avoid having money withheld, that makes sense, but DistroKid is being suspiciously evasive when it comes to conveying that information.




Yes. Once you digitally distribute your cover song, you are no longer responsible for paying digital mechanical royalties (unless you also make the song available on your own website, in which case you are acting as an independent distributor which would require a license.)
I see! But his videos on YouTube are monetised. When I upload a video on YouTube Im only allowed to monetise it if all of the content is mine. So does Youtube distribute the income from ads to the authors of the songs?
 

Polkasound

Senior Member
When I upload a video on YouTube Im only allowed to monetise it if all of the content is mine. So does Youtube distribute the income from ads to the authors of the songs?
This is not at all my area of expertise because I do not even have a Google account, but I believe YouTube gives content creators the option to monetize their own videos. A lot of people do that, and it's how some vloggers have become millionaires. If you upload a video with a cover song, YouTube's Content ID system will determine the rights to the audio are owned by someone else, and will automatically monetize the video with the ad revenue going to the rights holder. The rights holder also has the option of telling YouTube to take down or mute the video.
 

MartinH.

Senior Member
If you upload a video with a cover song, YouTube's Content ID system will determine the rights to the audio are owned by someone else, and will automatically monetize the video with the ad revenue going to the rights holder. The rights holder also has the option of telling YouTube to take down or mute the video.
Afaik that system has a flaw: you can put two copyrighted songs in the same video and when more than one is claimed by content ID, that will create a deadlock and I think no one gets any money if they don't take any further legal action.
 

robgb

I was young once
Is this one of those situations where it turns out all that was needed was a W8-BEN form to be filled in?
Sounds like it. I vaguely remember the 30% thing from when I was considering using a couple Canadian authors for a project I was working on.
 

jonnybutter

Active Member
It's unfortunate, but it's technically not a problem that requires a solution.... The sad truth is that...the days of music sales as a source of profit are over for 99.9% of artists.
I think it does require a solution. I don't know what that solution is, but the idea that the days of making money selling your own music are over (for 99% of artists) has enormous implications. Like I said, I don't have a solution, but I think we need to at least keep thinking about it rather than just accepting things the way they are.
 

Polkasound

Senior Member
the idea that the days of making money selling your own music are over (for 99% of artists) has enormous implications
Believe me, I don't like it either, but I also recognize that the entertainment industry continually evolves. Just like DJs changed the live music industry, and just like video rentals changed the movie theater industry, streaming is changing the music industry. There are a lot of independent artists out there who have embraced the new medium and have become financially successful with it.

Twenty years ago, I could sell a thousand CDs. Today, I'd have a hard time selling fifty. It stinks, but I don't see it as a "problem" per se. If I wanted to make a profit selling music today, I'd just have to adapt and find new ways of doing it. (My problem, though, is that we now live in a world where music has to be as visually entertaining as it is audibly entertaining, and I don't do videos. I just don't like being in the camera lens. I don't have any social media accounts. I'm a terrible self-promoter!)

But I do have other options. In fact, I'm hashing out one particular money-making idea right now that would not come close to equaling the sale of a thousand CDs, but it would potentially enable me to recover 100% to maybe 200% of my recording expenses.