Despite Declining CD Sales, CD Baby Experiences Growth in 2008

from the not-dead-yet dept

While CD sales dropped 14% overall in 2008, CD Baby — a popular online music store that lets independent artists sell music directly to fans — actually saw an increase of 2%. In addition to selling physical discs, CD Baby offers optional digital distribution through iTunes, Amazon MP3, Napster, Rhapsody, eMusic, etc. and directly through their website. Still, almost 30% of albums last year were only offered as physical discs (though, some of these artists probably use other companies for digital distribution). While growth in digital sales was predictably larger (45%), even a small increase in CD sales in the face of the broader crisis is a sign that CD Baby is doing something right.

There are a few reasons why CD Baby could be having better luck with CDs than the rest of the industry. First, a lot of independent artists are discovered through live performances, and the CD has yet to be replaced as the standard format to sell music at shows. The credit card swipers that CD Baby offers artists accounted for $2.4 million worth of revenue last year (though, that includes sales of other merchandise too). Second, CD Baby seems to be taking advantage of the long tail, with minimal setup fees, minimal starting requirements (artists only need to mail in 5 CDs to start selling) and short-run duplication services, though they haven’t released enough data to confirm how distributed their sales have been. Lastly, great customer service and a sense of humour can’t hurt (e.g. an order confirmation email starts, “your CD has been gently taken from our CD Baby shelves with sterilized contamination-free gloves and placed onto a satin pillow…”). Although it doesn’t make any sense to base an entire business model on selling CDs, there’s still money to be made for artists and companies using CDs as part of their model.

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Companies: cd baby

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Comments on “Despite Declining CD Sales, CD Baby Experiences Growth in 2008”

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Jeffry Houser (profile) says:

What other services allow Musicians to sell Digital Music

CDBaby rocks and has for a long time. I’ve been wondering if they would go downhill now that they were bought (by Discmakers, I think)

I don’t keep up on this stuff; but…

Last time I looked; CDBaby was the only game in town if you wanted to get your music onto ‘major’ music services. What other services allow independent musicians to sell their music via iTunes or Napster?

At one point there was a way to submit to iTunes w/o going through an intermediary; but I never tried it so I don’t know how ‘picky’ they are about the process.

Anonymous Coward says:

The key here is “independent artists”. The RIAA and major labels have done such a wonderful job of pissing off their costumer base that even if the could manage to completely shut down all file sharing networks and eliminate “piracy” totally, at this point it’s not going to do much to stem the flow of business losses they will continually suffer.

More and more people like me increasingly refuse to buy any products from the major labels (or any RIAA label if it can be avoided) and actively search out alternative bands and labels (and if I absolutely HAVE to have a major label album – increasing rare – I go looking for it second hand).

Of course more and more bands/artists are jumping ship and “going independent again – both because the labels are pissing many of them off as much as they are pissing off their costumer base, and because they are increasingly seeing the writing on the wall (something the labels, too busy trying to protect there hold on the industry any way they can, clearly haven’t noticed yet), which means more and more we can still get all the music we’ve grown to love.

As more and more services like eMusic and CDBaby arise, and more and more well known artists rejoin the ranks of the independents, the market will shift (slowly at first, then with increasing speed), and at this point I don’t see anything the major labels can do to stop that flow, regardless of what laws the manage to get passed. They’ve let to much of the foundation erode for their house to stand for much longer.

A good part of CDBaby’s success, part of what they are doing “right”, is that they have little or nothing to do with the major labels at all.

jim says:

Despite Declining CD Sales, CD Baby Experiences Growth in 2008

There are a few way to look at this, I don’t buy downloaded music or video, Why well there are 2 reasons 1) there is no great savings to be made (there is the right now factor if you cant wait) but I can wait a few days. 2) that thing that enables my enjoyment DRM, I buy the cd/dvd/bluray I have the physical media, cover notes ect. and I can put these on my media server or my media player in the format I choose. Folks are fed up being taken for a ride I still buy all the above but wait till the price is right why pay £19/15/27 when you can wait a few months and get it for half price or less. I beleive you should pay for your music and film, but at a price that you beleive its valubile, until it hits that point wait. I don’t think the media will die there will always be a balance with old and new.

Ron Letterman says:

Indie CD sales have been rising for some time

You have to understand: Indie –true indie– CD sales are simply *not counted* in the gloom and doom stats that you see in the press. The *only* place you can get indie CD sales stats, actually, are from CD Baby, and CD Baby being the #1 aggregator of independent content in both physical and digital formats, is a great place to go for these stats.

Based on their figures, it continues to grow, but the press, wanting to spin a different story, and the folks who want to sell ipods, ditto, are never going to want to run with the correct story. caveat emptor.

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