“Submit your music” is a simple button on AWAL’s homepage — but it’s also an invitation for DIY artists to enter a sophisticated, if unforgiving, review system.
AWAL, which bills itself as an alternative to a traditional record deal, has been owned by music company Kobalt since 2011, working with artists like Finneas, Lauv, and Madison Beer. Yet clearly it took something bigger than a good track record to cause Sony to believe AWAL is worth more than the entire song catalog of Bob Dylan.
Let’s take a step back. For new artists, there are typically two types of “independent” distributors they can use: a company like Sony’s own The Orchard, which handpicks artists to join the premium ranks of a roster that includes BTS and Jorja Smith; and a company like TuneCore, which lets every Herbert and their uncle upload music to an array of streaming platforms. AWAL sits squarely in the middle of these two options. The AWAL online submission process asks artists to upload information about their sound, their career, and their rights-holding paperwork. And then, they have to wait.
I’m told less than 10% of the music submissions that come through AWAL’s magic “submit your music” button are accepted for distribution by the company. Unlike The Orchard, AWAL’s doors aren’t closed to artists waving their digital demo tapes; but unlike TuneCore, there’s a strict quality filter in place.
Why does all of this matter? First, because it means that Sony Music Entertainment has just two-footed itself into the billion-dollar DIY artist space currently dominated by TuneCore, CD Baby, and DistroKid. Second, because it suggests that the record-label giant has a firm grasp on the future of the industry — one in which a significantly larger number of artists will make decent commercial returns from their music… even if the majority of artists still remain unloved and unstreamed.
For the first time in Sony’s history, it’s opening a direct digital passageway between its company and the millions of artists around the world not signed to a record company. Want the thrill of your music being heard by an A&R exec in the Sony Music global machine? With AWAL on board, that dream can come true for you, right away.
The major hasn’t just bought a choosy DIY distributor: It’s bought a very clever Sorting Hat, able to algorithmically determine the potential of individual artists around the world.
Once an indie artist has been permitted through the first set of AWAL’s gates, the company takes a 15% cut of their royalties to handle distribution, as well as royalty collection, to and from services like Spotify, Apple Music, YouTube. Things get more interesting for artists if their streaming popularity then ramps up. Certain artists are given the option to upgrade to an accelerated level of AWAL (“AWAL+”) and hand over circa 30% of their royalties. For this, AWAL starts investing in them as a small record label might, with a certain level of support across sync licensing, streaming and radio promotion, marketing, recording costs.
You can think of this level like a petri dish for artists with the potential to make serious money; AWAL is boosting their careers, for sure, but also closely observing their audience growth — via AI and the human eye — to see who amongst the “AWAL+” class deserves a bigger chunk of funding and resource.
The handful of acts who make it past “AWAL+” are, by this stage, established names. They require blockbuster investment and truly global marketing to maximise their potential. And it’s here that, under Kobalt, the wheels beneath AWAL have begun to get wobbly.
AWAL’s top tier of artists are asked to sign to an in-house “record label”, AWAL Recordings, where presumably the company and the artist reach a 40/60 or 50/50 split on royalties, but with AWAL investing even heavier amounts into an act’s development. Problem being, once an artist gets to this point — owning their copyrights, with AWAL’s short contract expiration clause in play — the major record companies, and their deep, deep pockets, start swarming in.
We saw this three times in 2019 alone: with Rex Orange County (8.7 million monthly Spotify listeners), who signed with Sony Music / RCA after three years on AWAL; with Dutch-Moroccan producer R3hab (20.5 million Spotify listeners), who built his brand on AWAL before inking separate deals with Universal and Sony; and with Madison Beer (13.9 million Spotify listeners), who left AWAL for another Sony label, Epic Records. More recently, I suspect we’ve seen it with Tom Misch (4.1 million Spotify listeners), who AWAL was proud as punch to have as a client, but whose name has conspicuously dropped off the AWAL site since he released a 2020 collaboration EP on Blue Note / Universal Music.
For AWAL to reach its full potential as a funnel for independent artists, it needs a Goliath of the record industry to solve its biggest weakness: artists rejecting AWAL Recordings for bigger checks elsewhere. This is precisely what it will get with Sony, which no longer needs to poach the next Rex Orange County or Madison Beer from AWAL… It can just upstream him or her into the Sony Music label system instead.
The value of AWAL is multiplied for Sony Music when it comes to the proprietary streaming data held by the platform. One only need look at DistroKid’s new “matchmaking feature” — enabling labels like Republic Records to mine its data — to see how valuable such insight has become for major record companies on the prowl for unsigned artists. Now, with AWAL, Sony Music can pull down the shutters on its competition for similar priceless information.
This deal is partly about Sony gobbling up AWAL’s global distribution market share, of course, but I doubt that’s the end goal. Currently, AWAL operates 12 offices globally, while Sony Music has over 40. The Orchard, which will now be “powering” AWAL with tech, operates in 14 languages. This all increases Sony’s ability to push AWAL into wider corners of the earth, and welcome a wider DIY artist community when it gets there.
None of which says half enough about the other potentially game-changing part of this, which is Sony buying Kobalt Neighbouring Rights. In truth, that deserves a whole other column, but, in short: Sony Music now owns an agency that collects hundreds of millions of dollars for artists from international TV and radio stations. The buyout puts the major in direct competition with music industry institutions like SoundExchange and PPL. No wonder experts in the field cite Sony Music’s acquisition of KNR as evidence that “the giants are moving in” to a growing segment which pays out over $2.5 billion to artists and record labels annually.
Make no mistake, this is still a gamble for Sony. The $430 million it’s spent on AWAL and Kobalt Neighbouring Rights is over $150 million more than the cost of acquiring The Orchard across two separate deals in 2012 and 2015. It’s also around four times the annual revenues of AWAL in fiscal 2019 ($111.5 million).
But for Sony, the strategy is more important than the price tag. “Submit your music”, it’s now saying to the world’s most promising independent artists. That way, we don’t even have to go looking for you.
Tim Ingham is the founder and publisher of Music Business Worldwide, which has serviced the global industry with news, analysis, and jobs since 2015. He writes a weekly column for Rolling Stone.