Yesterday, Venzo Digital, a new third-party digital distributor for the iTunes Store, launched beyond private beta in an effort to give unsigned musicians a no-fee route to digital distribution. Using Venzo Music, artists can sell songs, music videos and ringtones on iTunes. With Venzo Mobile, artists can build their own app for the iPhone or iPad to be also made available in Apple's App Store.
To sell music on iTunes, unsigned artists are required to offer at least 20 albums' worth of content. Music and videos sold on iTunes must also go through an Apple-approved encoding house. These third-party encoders help musicians meet technical requirements and manage their digital content. Sometimes bigger encoding houses also have the pull to assist with marketing efforts by helping artists land on the iTunes home page as well as make it eligible for Billboard charts.
Popular encoders like TuneCore and CD Baby charge clients an upfront monthly fee to use their services but turn over 100 percent of the royalties to the artists. Venzo Music does not rely on a subscription service. Instead, the new platform allows artists to upload and sell unlimited songs, videos and ringtones on iTunes free of charge while collecting 20 percent of all revenue generated from sales. Artists using Venzo still keep all their rights.
Similarly, Venzo Mobile provides the technology to create apps for the iPhone and the iPad (and soon for the Android platform) completely free but for higher rate. Venzo keeps 50 percent of all proceeds generated from paid apps. This split-down-the-middle exchange is to supplement for the large number of free apps that are created.
The no-fee service Venzo Digital may seem like the best deal, but it may be only profitable for artists barely starting to dip their toes into online distribution. Once an artists starts selling more than two $10 albums a month, TuneCore's $5 subscription plan becomes the cheapest alternative.
But when it comes to choosing a digital music distributor, cheapest may not always be the best. Last month, TuneCore tracks were removed from all Amazon MP3 stores in Europe after a contract between the two expired following royalty disputes. Immediately, competing service Ditto Music offered a free subscription to TuneCore customers to get them back on Amazon MP3 stores. Besides Amazon, TuneCore and Ditto Music delivers digital music to several platforms including iTunes, Rhapsody, Spotify and MySpace.
Venzo only works with iTunes but they are currently working on creating a service for Google Music, which is leveraging the discovery of unsigned artists as it competes against Apple.