For many new record labels starting out there are three main choices for vinyl manufacturing. A label may wish to handle the manufacturing themselves, or they may wish to use a broker such as Well Tempered. Though for most records labels the most attractive option is a P&D (press & distribution) deal offered by their distribution partner.
There are a few distributors still offering P&D deals, though it may be required that they manufacture a few releases themselves first, and the sales generated be used to assess whether a P&D is viable. So that leaves two choices initially for the label; manufacture themselves, or use a broker.
Well Tempered or any other broker would give the customer cheaper prices and faster turnaround times than if the customer were to go to the plant directly. We handle the production process from start to finish meaning far less work for the customer, so there is often little reason for the customer to handle manufacturing themselves. Pressing plants are busier now than ever before so have little time to deal with labels directly, the quality of service and attention to detail is far greater when using a broker service.
Though when a P&D deal is on offer is it really the best choice for the record label? The main attraction for many is that all production costs are paid for by the distributor and subtracted from the revenue generated from the sale of the product. With the vinyl manufacturing process taking 2 months, and the distributor’s payment terms being 60 days it relieves 4-5 months worth of cash flow which is incredibly attractive for a new business in any industry. Though what many fail to recognise is that it’s only really much like an overdraft facility – it still has to be paid for. And like an overdraft you’re spending money which isn’t yours.
If the distributor is fronting the money for releases then it is their best interest to make sure that the costs aren’t out of control, and caution is taken when deciding on the quantity of records manufactured. These choices will be in the interest of the distributor not the record label, as ultimately it is their money being spent. So obviously this relinquishes some degree of control. Will the customer get the final say on the number of copies pressed and also the specifications of the product? Possibly not.
So for the sake of an overdraft facility the record label is handing over many decisions that perhaps they don’t feel comfortable with. Independent record labels have become very much more empowered over recent years, they’ve taken back control of their business and one of the biggest changes has been the significant rise in direct-to-fan sales. An increase in sales can be seen month on month through the artist or label’s own store. How would this affect the P&D agreement? The distributor’s primary aim is to recoup costs, and as more and more sales are migrated over to direct-to-consumer platforms it makes it increasingly harder for the distributor to recoup their costs from distribution sales.
One advantage of a P&D deal has traditionally been that the distributor will have a dedicated team and production department working closely with the pressing plants so ensure all queries are answered swiftly, deadlines are met, and all projects are to cost. However, how many distributors currently offering this service actually work with the pressing plants directly? The answer is a surprisingly small amount. A lot of the distributors offering P&D cannot get direct deals with pressing plants, or do not have the knowledge and experience to handle the orders themselves – which leaves them having to go through a broker service. The second middle man in this chain can often cause inefficiencies – scheduling becomes harder, prices are subject to an extra margin, questions from the record label could pass to the distributor, to the broker, and then to the pressing plant. And back again.
There are distributors who deal with suppliers directly, though many are so focused on low prices that they confine their supplier list to one cutting engineer and one pressing plant. Well Tempered use the three pressing plants in Europe for the simple reason that one size doesn’t fit all. One pressing plant could be the best choice for coloured vinyl but not for download cards. Another plant might have an extensive range of stock sleeves but doesn’t offer short runs of white labels. If a distributor is working with a range of artists and labels with different needs and ideas then it simply doesn’t make sense to limit the options available.
Before accepting a Press and Distribution it is important to consider all of these factors and decide what is best for you. And could you actually be sacrificing quite a lot for the sake of an overdraft facility. From the distributor’s point of view if they can recoup costs then it benefits them – they make money from the manufacture of your product as well as distributing your product and they gain more control over your record label.