Earlier tonight Twitter was abuzz with news that CDBaby would be increasing their take on digital downloads from 9% to 25% to coincide with the relaunch of their digital shopfront.
I quickly called foul. That’s a fourth of your profit just for distribution via a paid download, and an increase of over 275% from the old model. CDBaby didn’t help to develop your talent. They aren’t doing anything specific to promote or expose you. We’re talking about charging 25% of your gross profit to host files and process transactions.
CDBaby noticed my cry, and tweeted in to placate my concern:
It was the only way we could offer single song downloads which is what artist said they wanted more than anything else. … we were actually losing quite q bit of money on 9% (losing, not breaking even). You’ll still make far more than any other store
Also, a good friend chimed in:
it’s sad that cdbaby increased their cut of digital sales, but they’re the highest payout & let u set ur own prices = lesser evil
Losing less money in a bank robbery is still a bank robbery. So, why are we settling for evil?
As a musical artist there are only three reasons to let someone who isn’t contributing to the content or quality of your music profit from you – exposure, ease, and expertise. Exposure means finding an increasingly wider audience. Ease is making things simpler and more affordable from a time/resource standpoint than if you did it yourself. Expertise is finding people who have talents and technology you don’t have on your own.
At a 9% take CDBaby lowered the cost of entry into digital downloads (iTunes takes much more). Since indie artists were using their expertise to sell records, it made their ease a big win over the enhanced exposure artists might get elsewhere being digitally stocked alongside with major label stars. CDBaby was taking a loss on album sales and hearing demand for selling single tracks, but the best answer isn’t wielding an outdated model in a field where they were hopelessly outmatched by competitors operating at a much larger economy of scale.
At 25% CDBaby is losing its edge on ease – even while implementing an artist-friendly uploader to take the physical middle-man out of their digital distribution. It all stems from flogging an expired business model – trying to find a way to profit on $.99 micro-transactions. If they’re making a profit on downloads, it’s a bare one – it’s mostly going to their credit card processing companies. And, their exposure level is still in the indie-leagues. They’re down to trading on expertise.
Having said all of that, the moral of this story isn’t the evil of CDBaby. I believe they’re trying to do something good for their artists that will also keep them afloat. I don’t envision or recommend a mass exodus from CDBaby.
Instead, I think it’s just one more sign that indie artists need to find a new way to turn a profit. I can give you a hint – it’s not by shilling their entire catalog for a $.75 on the dollar. How long will it take to recoup the five or ten thousand they spent on recording in $.75 increments, not to mention paying off producers, managers, and supporting musicians? Even longer than it did when they were selling CDs out of the trunk of their car, that’s for sure.
What’s the solution? I’ll share my ideas in future columns, but right now I want to know your thoughts. How can an indie, local musician turn a respectable profit with their online presence?
I understand with itms you’re paying for exposure and convenience and apple-flavored goodwill, but what is CDBaby offering, other than serving up preview listens, handling the transaction, and providing a one-use-only download link to each paying customer?
I wonder if there are free, drop-in “music store” applications for artists who run their own websites. The tech side shouldn’t be that hard a problem, and if you’re working in small volumes (as a local indie artist) your bandwidth cost + Paypal fees would be far less than $.25 for every song purchased.
Peter,
We always appreciate the passion in which artist weigh in on topics when we make changes. That means we’re doing something right if people care. However, I do want to point out a pretty big omission in your article above. The fee change DOES NOT effect the digital distribution we already do to iTunes where we are the “middle man.” This only effect downloads through our store, where we are not the middle man, we are developing our retail side to give artist more control than ever in how their music is merchandised. A couple things to highlight:
1. Artists can set the price for their single song downloads as high as they like. What to charge $2, $10, $20 for a song, go ahead. In general, being consistent with other retailers like iTunes is best, but we have far more types of products than just 3 minute pop songs(Anywhere from classical and world music to meditation CDs to audio books). For artists with longer content this will be a big feature.
2. Since the beginning we have been the only place that will give you(the artist) all the contact info to everyone that buys your music. With the new site, we’re taking that a step further and allowing you to give away a tracks for promo in exchange for contact info. There’s no cost to the artist for that. I expect that this feature will be a quick favorite.
Those are just a couple of the benefits in the new site. We’re asking for a little more on downloads through our site, but artists are getting a huge amount in tools and service in return. This new launch is just the beginning, as it’s really only the foundation that we’re building on. There is a lot more launching through the Fall. Let me know if you have any questions!
Kevin Breuner
CD Baby
I’m actually excited about the new features that CDBaby is bringing to the table – namely the download cards. They’ll be huge for promo.
Sure, the bigger cut of single-downloads is a bit tough to handle – but I’m not sure if that bigger cut is for the individual sales only (a previously unavailable service) or for the full-album digital sales as well.
To answer your question about possible solutions – have you heard of QuidPlayer? Carsie Blanton uses it. It’s basically a widget you control and allow people to pay-what-they-want. She’s had a lot of success with it.
Tim. Per usual, we are of a similar mind. We have to consider that not all artists are as willing or able to grow-their-own as we are – nor do they necessarily take a similar view to commerce v. art.
Kevin. I truly appreciate your thoughtful response to my post. I don’t mean to unfairly beat up on CD Baby; I went back to make the distinction between your own DLs and iTunes DLs more clear. However, I think your company’s move is a significant signpost of the direction that online distribution is heading in, so I can’t help but react (somewhat negatively).
That said, I know that CD Baby has done wonderful things for a lot of artists very dear to me, and I appreciate the “We’re not evil, and we love music!” position you have always assumed.
Dante. Agreed, regarding the new features. If anything, I think the changes will make CD Baby a bigger player on the digital scene. I’d like to see them cut in on iLike in the apps/integration front, as I find that service to be relatively hapless.
QuidPlayer sounds very much to be in the direction I’m thinking in. As always, I have a lot more to say on the topic than time to say it at the moment. Soon, though.
I’d be much more concerned if they were taking a bigger cut from iTunes income. Thanks for posting these thoughts..
i wrote to cdbaby 2 times and they dont respond. great company ! I MISS DEREK SIVERS running the show. wtf
Sadly, the CD Baby site is broken:
http://cdbabyrelaunchdebate.blogspot.com/2009/07/cdbaby-relaunch-debate.html
Great, thoughtful article. Sorry I’m so late reading it.
I’m an artist myself and im basically researching all of this in,and i gotta say the politics are wonderful! im happy that this discussion of indie artist having options in this soon to be digital music revolution is even existing,were at the peek of it now and CDbaby,itunes,ilike,amazon and who ever is helping the indie’s out.but in my opinion Cdbaby is for the underdog to really prove to the world!!! the success stories alone i read had passion writen all over them,itunes is great brand wise but it’s oversaturated with all of the mainstream top 100.i would love to be there one day but at that point you loose touch.i say go cdbaby! and im gonna look into that quidplayer,it sounds more controlable,
-Eric Biddines
It’s definitely a sad state of affairs but it seems cdbaby have no other option. In saying that, i agree that “Losing less money in a bank robbery is still a bank robbery”
Great site, i don’t know what the solution is myself though..