CD Baby Milestone: $300 Million Paid Out To Artists

image from www.northerndeparture.comCD Baby announced that, as of today, it has paid out more than $300 million to artists using its services, This year total payouts to artists are expected to be $60 million. That's up from $56 million in 2012 and $48 million in 2011. “It took us eight years to pay out the first $50 million,” says CD Baby CEO, Tracy Maddux. “But now our artists are earning at least $50 million per year and this year we expect to beat $60 million.”

CD Baby helps artists monetize direct-to-fans sales, online video through their YouTube and Sync service, and publishing through CD Baby Pro. Artists that use their services also tend to stick around, according to the company, with less than 2-3% leaving in any year.

Among the 325,000 users, are former major label artists, top-selling indie artists, part-time professionals, and profit-making musical hobbyists. Macklemore, The Antlers, The National, and Bon Iver are examples of artists that came up distributed by CD Baby and keep their catalog there. Ingrid Michaelson and Gregory Alan Isakov have continued their partnerships with CD Baby throughout their succesful indie careers. Greg Brown and Grant Lee Phillips are examples of arists that have dropped out of the label system and gone d.i.y.

“Each month we find out about more of our artists doing things outside of the mainstream to generate revenue. We keep adding services to empower them to do that—tapping into multiple streams of revenue – no matter where they are in their career, "  explains Kevin Breuner, CD Baby’s Director of Marketing.

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  1. CDBaby was a fantastic and innovative platform until the creator (Derek Sivers) moved on to other things. Nowadays unless you sell loads of CD’s they aren’t interested and refuse to stock more than just a few copies – so you’ve already paid any potential profit on shipping just a few CD’s. They quote storage costs as the reason, but it was never a problem before Derek’s departure in 2008. If they keep asking groups with low volume physical sales (regardless of digital downloads) to send 1 or 2 CDs at a time they’ll soon alienate the very client base that made CDbaby what it was in 2008 when sold for a (reported) $20 million. Many groups I know are now moving on to Bandcamp and similar sites, so if CDBaby don’t become more friendly to up and coming artists they’ll become the next MySpace of independent music distribution.

  2. In an market where CD and download sales are starting to be replaced by streams that pay fractions of pennies, CD Baby has been working non-stop to expand the opportunities for all our artists to make money.
    While the CD market has been declining, our CD sales have been growing the past two years thanks to strong partnerships with Amazon and Alliance Distribution. However, new CD titles are growing fast — faster than CD sales are. Out warehouse is nearing capacity, which has forced us to manage inventories more closely. This has unfortunately affected some titles, and it’s opened us up to some criticism. However, we’ve worked hard to limit the negative impact: most of the moves have been limited to titles that haven’t sold in over 2 1/2 years, combined with making sure that the number of units we get in match the demand for the title.
    Bandcamp is a good solution if you’re ok with selling only directly to fans, and fulfilling your own orders. CD Baby offers a traditional retail and distribution service. And our retail store pays artists the largest share on download sales — 91% — more than Bandcamp, iTunes, or Amazon. That’s why many artists who sell on Bandcamp sell on CD Baby as well. It is true, however, that as the CD market has changed we’ve had to adapt our practices as well, as any business must do.
    Beyond CDs we’ve been adding other money making opportunities for artists in this new music business: we’ve added YouTube and sync licensing, and performance and mechanical royalty collection with our CD Baby Pro service, all of which are paying extra money to artists. And we’re continuing to build new features.
    So, I understand that some of the changes require some compromises for a few artists. And I apologize for that inconvenience. But please know that we continue to work hard every day for our artists to make the most money possible.
    Tony van Veen
    CEO, AVL Digital | CD Baby | Disc Makers

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