Selling our music online: my research so far
I sing in a Melbourne-based choir. We’ve self-released two albums so far and are working on a third. I was asked by the choir committee to look into what our options are for selling our music digitally, and after many lovely Twitter followers of mine offered me some preliminary advice I did some online research and came up with the following summary of what I understand our options to be. If anyone has any feedback on what I’ve written, please let me know (@melbgastronome on Twitter). Thanks!
Okay, selling our music online. One of the first major decisions we’ll need to make is whether we go with a digital distributor or a direct-to-fans sales platform (or both).
To sell with a digital distributor, we sign up with them and upload our music, and then they distribute it digitally both via their own retail website and via other online music retailers (iTunes, Amazon MP3, Rhapsody, eMusic, Spotify etc). We can only sign up with one digital distributor at a time.
The main digital distributors are CD Baby, TuneCore and ReverbNation. I’ve looked at several webpages comparing these companies, and I think that the best option of these for our choir would be CD Baby.
The way it works with CD Baby: creating an account is free, and then for each album we upload we pay a one-off fee of $49 (or $9.95 for a single). For each album we sign up we also need to get a UPC Bar Code (a unique retail barcode for the product that can be used for the lifespan of the album anywhere, even with other distributors or in shops), which costs $20 per album or $5 per single. I’m not sure whether our first two albums already have their own UPC Bar Codes - if they do we wouldn’t need to get them new ones. Assuming they don’t and we need to get our them for our albums, it will therefore cost a one-off $69 per album to sign it up for digital distribution with CD Baby.
CD Baby then lists the album for as long as we want it online on CDBaby.com and other sites, including iTunes:
- On the CDBaby.com site the album gets its own profile page, we can set the price of the album/single song downloads, and for each sale made we get 75% of the purchase price paid and CD Baby gets 25%.
- For sales made on one of the other sites, like iTunes, the retail site sets the price and takes its cut of every purchase and then CD Baby keeps a 9% commission on the net income, returning the other 91% to us. So for example, with iTunes: for every $0.99 track sold, iTunes takes its $0.29, passes the $0.70 to CD Baby. CD Baby would then take its 9% cut, so in the end we’d get $0.63 per track.
CD Baby also offers other features, including the option of selling our physical CDs (and manufacturing them, if that’s what we’d want), the ability to sell through Facebook, the ability to customise our digital distribution (eg choosing which stores sell the music, deciding whether we want our albums on sites that stream music vs sites that sell music downloads). If we chose to sell our physical CDs with them, we’d set the price and for each sale CD Baby would keep $4 leaving us with the rest of the purchase price. CD Baby pays the artist by check, PayPal or direct deposit to a US bank account (the last option obviously won’t apply to us).
In contrast to CD Baby, the digital distributor TuneCore gives each album a UPC Bar Code for free and does not take a cut of every purchase price paid. 100% of the money from purchases goes to the artist. BUT as well as paying a $49 sign up fee per album uploaded, the artist needs to pay TuneCore a $49 annual subscription fee per album for every year that the artist wishes to keep the album online. ReverbNation has a similar business model: they don’t take a commission on sales either but as well as an initial upload fee the artist needs to pay a fee ($35-$60) per album per year if the artist wants to keep them online. Over the lifespan of an album this could become a big deal. And it becomes a bigger deal with multiple albums: even on the lowest estimate of a $35 annual fee per album, if an artist had 5 albums they’d need to pay $175 a year to keep the music online, irrespective of how many sales they were making.
For a choir like ours that will probably sell only a very modest number of copies online, relatively speaking, if we’re going down the digital distributor path I think it makes much more sense to pay the one-off costs per album upfront with CD Baby and let them take a cut of the sales, rather than have to pay several subscription fees every year with TuneCore/ReverbNation just to keep them online. This below link has a handy comparative analysis of the different digital distributors (note though that the prices are out of date), and comes to a similar conclusion for artists who don’t anticipate huge sales:
See also: http://blazingminds.co.uk/music-released-tunecore-cd-baby/ and http://www.indieguide.com/thread/185
More information about CD Baby can be found here:
Direct-to-fans sales platform
An alternative to a digital distributor is a direct-to-fans sales platform, ie a single website from which fans can buy our music rather than through iTunes or another digital retailer. Bandcamp, Nimbit, TopSpin and Soundcloud are all direct-to-fans sales platforms, and of these Bandcamp appears to be the easiest to use and the best-suited to our needs (it also doesn’t require exclusivity, so if we wanted to sell through iTunes or someone else down the track we could).
The basic service with Bandcamp is free: there are no signup costs or listing fees, and we don’t need to get UPC Bar Codes. Bandcamp makes money via a revenue share of sales (described in more detail below) of 15% on digital, 10% on physical (the revenue share on digital drops to 10% if the artist reaches $5,000USD in sales). We would get our own Bandcamp profile page and we set the price of our albums/single track downloads, and when a fan makes a purchase the money goes straight from them into our nominated PayPal account, minus PayPal’s transaction fee (PayPal’s standard transaction fee is 2.9% + $0.30 USD). As well as the Bandcamp account, we’d need a PayPal account, either a PayPal Premier account or a PayPal Business account. Both kinds are free to set up, with PayPal making its money through the transaction fee mentioned above. Hopefully dealing with PayPal wouldn’t be too fiddly.
We could sell digitally and physically, if we wanted to. The way Bandcamp makes its money from our sales is as follows:
As you sell on Bandcamp, we track your revenue share balance, and when a sale comes along that’s less than or equal to your balance, that sale goes to Bandcamp. Let’s look at an example. Say you’re at the 10% rate, and you sell an album for $10. All $10 of that sale goes straight to you, but your revenue share balance (the amount you owe Bandcamp) is now $1. Then you sell another album for $10. All $10 of that sale also goes straight to you, but your balance is now $2. You keep on selling $10 albums, and those sales keep on going to you. However, upon the sale of your tenth $10 album, your balance has reached $10, so that $10 sale, and only that sale, goes to Bandcamp (and your balance is then reset back to zero). You can view your balance at any time by exporting your sales history from the Sales section of your Tools page.
Bandcamp also offers a bunch of other features, including being able to offer our digital tracks in multiple formats (not just mp3), real-time statistics, the ability to sell tracks within Facebook, the ability to offer discount codes for special fans or free downloads, sales in any currency, custom metadata, etc etc. You can read more about Bandcamp here:
Digital distributor vs direct-to-fans sales platform
Going with a digital distributor means our music would be in the iTunes store (and other online stores), but will probably be more expensive for us. Going with a direct-to-fans sales platform would be cheaper, and we could easily link to it from the choir’s website (so anyone who knows about our choir would still be able to find our music via our website, even if we’re not in the iTunes store). We could also do both. The choice is ours!