There’s significant change afoot at prominent DIY distributor DistroKid.
The company’s founder Philip Kaplan is transitioning from CEO to Chairman. The person taking over day-to-day leadership duties of DistroKid going forward will be Phil Bauer, who has been promoted to President of the company.
Bauer has served as DistroKid’s Chief Operating Officer since 2018.
DistroKid claims to be the “world’s largest distributor of independent music”, and estimates that it distributes 30-40% of all new music in the world.
The company says that its platform is used by more than 2 million artists.
The leadership shakeup announced at DistroKid on Thursday (January 11) arrives two and a half years after it accepted an investment (in August 2021) from Insight Partners, which valued the distribution platform at USD $1.3 billion.
Following that transaction, Boston-based growth equity firm Silversmith Capital Partners, which led DistroKid’s first outside investment in 2018, retained “a meaningful ownership position” and remained on DistroKid’s board.
Spotify retained its minority stake in DistroKid when it received the Insight Partners investment; SPOT then offloaded two-thirds of its stake in DistroKid for $167 million a few months later.
DistroKid’s leadership change arrives amid a rapidly changing streaming landscape, with indie distro services facing potential challenges from the introduction of new ‘artist-centric’ royalty policies at music streaming platforms.
DistroKid claims on its website to be “the easiest way for musicians to get music into Spotify” and says that it has ‘processed’ (i.e. distributed) more than 45 million songs.
Meanwhile, at Spotify, the world’s largest subscription music streaming service, a suite of new policies are going live – seemingly influenced by Universal Music Group‘s ‘artist-centric’ strategy – that aim to tackle streaming fraud and introduce a minimum payment threshold.
One of the new changes coming into force at the platform this quarter (Q1 2024): Spotify will start financially penalizing labels and distributors per track when “flagrant artificial streaming” is detected on uploaded content.
“When I first started coding DistroKid 12 years ago, I never imagined the immense scale DistroKid would achieve, and the positive impact it would one day have on the music industry.”
Philip Kaplan
Streaming fraud is a major issue amongst music industry leaders, and this policy has therefore unsurprisingly been well received by most of the music business.
It has, however, caused concern amongst some in the DIY distro community, who worry that – by facilitating a high volume of uploads to DSPs – they could be disproportionately impacted by the plan.
Citing a source, Billboard reported in November that DistroKid’s Kaplan himself objected to the Spotify fraud policy on a call with the Music Fraud Alliance.
Billboard’s source, who was reportedly on the call, described Kaplan’s comments as follows: “We can’t determine if a new client is going to hire a marketing service that’s going to bot streams until they’ve done it. It’s like you can’t determine if your neighbor is going to commit a crime.”
DistroKid has diversified its offerings outside of music distribution in recent years. For example, it’s introduced a video distribution service, and recently acquired web hosting and D2C specialist BandZoogle.
However, DistroKid’s core business model is rooted in unlimited music distribution for a monthly fee.
Commenting on today’s news, Kaplan said: “When I first started coding DistroKid 12 years ago, I never imagined the immense scale DistroKid would achieve, and the positive impact it would one day have on the music industry.
“I’ve relied on Phil’s insight since we first began working together about five years ago, and he’s been instrumental toward our incredible growth and success.
“I’m excited for this next era, and to help support Phil and continue contributing toward DistroKid’s innovation, culture and progress.”
“Philip changed the game when he launched DistroKid with unlimited uploads in 2013, a model which has now been adopted across the industry to the benefit of artists everywhere.”
Phil Bauer
Phil Bauer, President of DistroKid added: “I’m honored to become DistroKid’s President and humbled by the trust & confidence Philip is showing in me and our talented team.
“Philip changed the game when he launched DistroKid with unlimited uploads in 2013, a model which has now been adopted across the industry to the benefit of artists everywhere.
“His mentorship over the past five years will absolutely carry forward as DistroKid continues to build high quality tools & services that help artists at any level be prolific.”
Over the last year, DistroKid introduced a number of updates to its platform, including mobile apps for iOS and Android.
The company also unveiled Mixea, an AI-powered mastering tool that helps artists make their music “radio ready” by optimizing bass, compression, stereo enhancement, EQ, limiting & loudness.
DistroKid also rolled out DistroVid, a service that lets users upload music videos to Apple Music, Tidal and Vevo.Music Business Worldwide
