Ever wonder how world renowned record labels like Dirtybird, Armada, Toolroom, CUFF, and more get their music into online retailers such as iTunes, Beatport, and Juno Download? Or how a distribution service works? Well look no further. Label Worx has been one of the world’s leading distribution companies for almost 10 years, providing a crucial service that without, we wouldn’t have the record labels, artists, or the dance music revolution we’ve seen over the past decade. We got a chance to get some background and more information on Label Worx from their CEO, Matt Abbott.
What was the initial vision and concept for Label Worx?
We actually started Label Worx back in 2007 from the glamourous location of my bedroom. We had our own record label called “Alter Ego Records” at that point, back when we were producing Trance. We found that delivering digital music to stores was an absolute nightmare; a tedious task of filling in information for each store that was pretty much the same – it took a day just to fill everything out and get it to each place. Understanding that this was a problem, we built a system from scratch that allowed us to deliver our releases to stores in one go, along with one of the world’s first digital promo senders. At this time, CDJs had just arrived and labels had started sending mp3s instead of physical CDs and Vinyl to DJs; after a few of our industry mates saw what we had done, we started doing it for them too and realised quickly that we had a pretty cool business idea. A simple, easy to use, no fuss system for sending promos and delivering releases to stores: Label Worx was born!
Does Label-worx distribute music for genres other than dance and electronic?
We have always stayed true to our colours and generally only work with dance and electronic labels. Since 2007, we have built strong relationships with online stores which has cemented our name in the dance music industry, but as favoured styles of music have changed, so have we. We understand that stores love to receive releases from distributors with no errors and all the checking done – we do all of this in every different way for each store and they love us for it. We feel that it is important we focus on this area alone rather than distributing and servicing labels of all genres. We’re one of the best in this industry so why dilute it? Currently we distribute more dance and electronic music to Beatport, Traxsource, Juno and other stores than anyone else in the world.
A lot of the general dance music audience are not as familiar with distribution as they are labels and online retailers. What is your job as a distribution partner and provider?
Our role is to provide digital services to dance music record labels. Now we offer Distribution, Promo Sending, Royalty Accounting Software, Demo Management Software, Mixing, Mastering and Web Services. We have an all in one system that labels can use to manage their whole label. Because of our in-depth unique tools, and the fact labels only need to upload their audio once, with one set of meta data, the whole process is simplified for them and leaves less room for error. We’re the middle men who ensure releases are delivered to stores on time, pitched for store features, mixed and mastered well, and presented as a full package to stores. Not every label we work with uses all of our services as they have their own preferred methods for handling different areas; that said, the ones that do can’t thank us enough for making such important tasks easy to manage.
How has Label Worx expanded over the years?
As I mentioned earlier, the company started in my bedroom. Nine years down the line, we have nine staff based at our HQ in Hull, three Developers in our Hinkley office, headed up by Chris Chambers who I started the Company with, and more recently we have opened a Berlin office to help service any labels we work with over in Europe. We’re also currently in the process of employing two more staff members at HQ. We now work with over 8000 record labels in one capacity or another, including Armada, Toolroom, OFF Recordings, Simma, Snatch, Enhanced Music and have provided Mix & Masters for labels and artists that work with the likes of Universal, Warner, Sony, Ministry Of Sound, Spinnin Records and more. I’d say we have grown in to something we never imagined Label Worx to be: the world’s largest distributor of dance and electronic music.
From your perspective, how has the relationship between labels, distribution, and retailer changed in the past few years with Spotify and streaming services becoming more popular?
Some labels still have direct deals with stores and prefer to work this way based on the relationships they have built up themselves with these platforms, however stores would rather receive everything from a distributor like us as it makes their work load a lot less. On a distribution level, we are booming more than ever as labels start and succeed every day. The streaming platforms are a tougher cookie for labels to crack and that’s where companies like us can help out. Sadly, the number of purchased downloads is falling and we see this trend continuing each quarter; there are even talks of some stores completely stopping download by as early as 2017, pushing everyone to the streaming market. We are currently working with our labels to help them make the switch and still earn a very good revenue from it – in fact, some of our labels have done this so successfully that they are now earning more from streaming than downloads alone. We can’t stress enough how important it is for labels to begin making the shift, that working with us to build solid relationships with streaming platforms will help make up the revenue they will sadly lose as downloads decline. Even now, a DJ will still buy a download, whereas most consumers would rather pay for a service such as Spotify or Apple music and have all the music in the world at their fingertips.
How will Beatport’s recent developments in shutting down many of their branches have an effect on distribution for labels?
Personally I don’t think labels have anything to worry about with Beatport. They have stripped back behind the scenes to a level they used to be at, thus allowing them to focus on pushing and selling quality dance music -and now this part of the company is stronger than ever. When Baseware closed, we helped a lot of labels make the switch over to our services and successfully kept them online without having their content pulled from stores. (if anyone is affected by the closure of Baseware, please get in touch and we can help out).
Do the changes in the way Soundcloud operates affect business for distributors?
This hasn’t affected us and I can’t see that it will affect other distributors. There are regular shifts behind the scenes which are not as publicised as everything that’s happened with SoundCloud and Beatport – labels adapt and switch their habits to other platforms. For example, we’re seeing more labels take new tracks to platforms such as Spotify and premiere their music on there instead of SoundCloud – this allows them to start making money from a release before it is even released. SoundCloud could only offer that if their accounts were monetised, and the revenue only came from plays in the US.
Given your position and viewpoint in distribution, what direction do you see music as a whole moving towards?
Music as a whole is shifting to the streaming market. Downloads will be a thing of the past for most stores, except for the ones selling to DJs. Taking control of these shifts by adapting how you sell your music is so important because the streaming platforms are not as niche as those stores dedicated to certain styles of music, or at least they are not yet. We cannot emphasise enough the importance of building a strong presence on streaming platforms now, so that when the shift happens fast, labels are prepared and earning money from this. We will see the closure of a lot of labels that are not being savvy when it comes to this over the next few years.