CD Baby challenges record industry distribution model


Unsigned artists can find a home with CD Baby, a distributor that claims to have successfully transitioned from being a CD-based to a download-based music distributor, bucking the trend that has forced most major labels to downsize. It also claims to pay its artists much better than the majors.

It says it has paid $200M to its “unsigned” artists, and is on track to reach the quarter million mark some time next year.

It says that 200,000 artists and 3,500,000 songs are on its list, and it expects to release 100,000 new titles in  2012.

“CD Baby was there in the beginning of the internet music boom. We’ve grown along with technology and along with our artists. We’ve become the model for the new music economy,” says CD Baby president Brian Felsen. “CD Baby has emerged as the only CD-based business model ever to successfully transition to a digital download based business, while continuing to grow revenues and profits each year. In 2011, only 12.8% of the company’s revenues will come from CD sales and CD distribution, with the bulk of revenues coming from music downloads and streaming.”

Felsen added, “We’ve made worldwide music distribution affordable and available to all artists. Musicians have long criticized the revenue share they receive from traditional record deals.  We turned the record label model upside-down and gave the lion’s share back to the artist. Now artists can sell their music to a worldwide audience, and receive 91% of all revenues.”

Artists that work with CD Baby are said to get between $6-$12 for a CD sale and $7.50 for a full album download. It says the majors pay between $1-$2 per sale.

Felsen concluded, “As major labels continue to consolidate and shrink, CD Baby plays an increasing role in cultivating and building vibrant careers for emerging artists. We provide unsigned artists with the biggest sales channel available anywhere, which includes distribution to major digital outlets including iTunes, Amazon, Spotify, and now their own individual Facebook music stores in addition to other key sales platforms.”

RBR-TVBR observation: We note that the amount of money this service pays to artists doesn’t go all that far if you were to allocate it evenly to all of the artists and titles it offers. There is still a need for promotion, and radio can still provide invaluable assistance to the bottom line of CD Baby and the artists it distributes.