Distributor splits tools: so close, yet so far

Where you split things up is the important part.

There are a lot of distributors out there these days, and some of them have the ability for users to divvy up royalties amongst collaborators. Around the IC office (discord), we call these “splits tools.” 

These tools can be super helpful! You can release a track or a whole record or tshirt or whatever you’ve made, assign a % of the income to your collaborators, and boom, done, no royalty accounting required.

When it comes to royalty accounting, splits tools are basically like

Buuuut let’s say you want to split income on the net, aka inclusive of expenses or advances. You probably do have expenses, after all, and if you want to make it easier to work with professionals, advances are helpful. Or maybe you want to also sell physical stuff at physical places (like shows). Or you get a sync. Or you want to start selling via additional distributors, webstores, bundles, subscriptions or or…. do basically anything besides split the gross income from that one source.

Most likely, you’ll start by trying to figure out those things one by one, as they happen. Then you’ll start using spreadsheets to track it all, doing your best to to keep up. You’ll hire someone to start doing it for you. Then you (or your collaborators) will want to know how much you’ve made all-time, and you’ll realize your data is all over the place, and getting it all back together is a massive undertaking. And then you will start to wonder if those splits tools really were helpful after all.

The lesson is that *where* you split things up is important. If you’re doing it “at source,” you’re setting yourself for future headaches, and making it harder to work with collaborators on the net, or offer advances. You’re taking one marshmallow instead of waiting for two. The better things go, the more you sell, the more difficult getting back on track will be.

Instead, many years of experience has taught us that the way to go is to bring all your income / expenses / advances together into one place, and THEN split it up– one level removed from the income sources themselves.

The simplicity of splitting gross income so close to the source has its perks, but if you’re trying to grow your audience/catalog/business/etc, splits tools can only take you so far.