Question:
You are a musician and you want to sell your music on digital retail sites. You are deciding between two digital distributors to deliver your new album to retailers. The two distributors, Distributor A and Distributor B, have different payment terms and fees.
- Distributor A charges a one-time album set-up fee of $20, plus an annual “maintenance” fee of $20, and takes no percentage of your sales (Distributor A passes 100% of the sales revenue it collects on to the artist).
- Distributor B does not charge any set-up or annual maintenance fees, and takes a 10% cut of your sales revenue (you the artist keep 90%).
Assume both distributors will deliver your content to the same stores and offer identical service except for the payment terms. Which distributor do you choose?
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