Spotify Names 5 Preferred Distributors, What Does That Say About All The Others?

Hypebot recently uncovered that Spotify had bestowed "preferred" status on just five of the many distributors delivering music to the platform  That news came alongside the shockwaves that Spotify sent through the distribution sector with two recent announcements. 

First came the unexpected news that Spotify was enabling free direct music uploads for all artists and labels  - no distributor required.  Just days later, Spotify announced it had made an investment in DistroKid, one of its five preferred distributors, and was creating a direct connection to the streamers new free upload  service that would enable distribution to other music services using the discount flat fee aggregator."Preferred Artist Distributor,

DistroKid "has been a trusted and reliable partner to Spotify, which is why they’re a natural choice to enhance the experience for artists using our beta upload feature," Spotify said in a statement. "We’re excited to roll out this new technical integration in the near future."

The Competition Scrambles

Multiple sources tell Hypebot that these combined developments sent shockwaves through many competing distributors.  Several refused to comment for this story.

But beyond a significant public relations hit, what does all of this really mean for Tunecore, Ditto, ONErpm, RouteNote, Symphonic, Repost and the dozens of other small and large distributors competing for the business?

Spotify's DistroKid announcement was perhaps not as damaging for the four other companies that have Spotify "preferred distributor" status.  While Distrokid gets top billing, CD Baby and Glasgow based EmuBands are also listed as "Preferred Artist Distributors."  The Orchard and digital music distribution technology provider FUGA are listed as Preferred "Label Distributors."

Responding to our inquiry, Spotify offered this explanation of why these five companies had been granted Prefered status:

"We value all of our content providers and the artists who work with them. In working with our content providers, we’ve defined criteria to be a preferred provider. That criteria, which we share with our content providers, includes providing high quality metadata, preventing infringing content, and providing their artists with easy access to Spotify for Artists (so that artists and their teams can benefit from its insights and tools). We highlight content providers that meet those standards, because doing so improves the quality of the Spotify service for users, and ensures a seamless experience for their artists."

It's hard not to interpret that as implicitly suggesting that all of the other distributors are not doing as good a job as the the five preferred partners at "providing high quality metadata, preventing infringing content, and providing their artists with easy access to Spotify for Artists."  

That's not exactly a condemnation, but its also not a ringing endorsement.

In fact, one of the now preferred distributors told us a year ago that they were cleaning up how they delivered music to Spotify because all aggregators had been put on notice after string of lawsuits were filed for unlicensed use of music on the streamer.

To be clear, Spotify is not threatening to stop taking music from distributors other than it's Preferred Five.  But Spotify's endorsement or lack there of could  sway an artist or label when choosing a distributor.