Tutorials

CDBaby

CDBaby has been around for several years, and has a strong, reliable physical sale operation. They have deals with all the major digital distribution companies (iTunes, MusicMatch, Rhapsody, Napster, etc.) and are also well-regarded both by musicians and fans for being friendly, up-front, and devoted to making everyone happy.

If your CD is not already on CDBaby, it costs a one-time $35 in order to get the CD listed. This includes all warehousing and physical fulfillment costs for the CD, all listing for the physical album, customer service, and so on. (It's a pretty good deal!)

If your CD doesn't have a UPC already, CDBaby can sell you one for $20. (Most CD manufacturers will give you a UPC as part of your initial pressing, though.)

CDBaby keeps 9% of the portion of the sale price left after the music store takes their cut. For example, iTunes keeps keeps $.29 of the $.99 sale price, so CDBaby takes 9% of the remaining $.70, leaving you with $.637 per track sold.

There are no other recurring costs.

TuneCore

TuneCore is a fairly new offering, which focuses on iTunes and Rhapsody. Their pricing structure is oriented more towards the high-volume seller; although there are no commission fees, the setup fees are fairly high, and there is a recurring fee basis.

Initial setup costs $0.99/track, plus an additional $0.99/album for every store other than the American iTunes Music Store. (For example, a 10-track album put on all 5 8 of their current store offerings will cost $9.90 + $6.93 = $16.83.)

In addition to the setup fees, there is a $7.98/year "maintenance fee" for every album.

Recommendation

Which one you go with depends primarily on sales volume.

CDBaby have a much larger customer base due to being available on a wider variety of services, including ones which pay per streaming listen, and if you're already selling the CD physically (which you probably should be) the initial setup is essentially free. However, the 10% commission rate means that TuneCore may be a better proposition in the long run.

To keep these calculations simple we'll assume people only buy single tracks from iTunes. Also we'll assume that TuneCore gets the same pay rate as CDBaby (TuneCore does not furnish this information as of this writing).

Assuming you have a 10-song album and you want to distribute it to all of TuneCore's markets, your initial setup fee is $13.86 $16.83 (see above), which is paid for by selling roughly 20 24 single tracks. The annual $7.98 maintenance fee would then be paid for by selling 12 tracks per year.

To put this in perspective, pointed little quill, an album which gets no marketing, is in a niche genre, and is also available for free download generates about $7.50/year, though 76% of the sales come from iTunes and the remainder comes from the other companies (notably eMusic.) PLQ's sales distribution looks something like this:

A single track generates $.6370 via CDBaby or $.70 via TuneCore. So the break-even point in track sales is at the point where .6370x=.70x-7.98, which works out to 127 track sales. So if you are positive you can generate 127 track sales per year via the iTunes Music Store, then TuneCore is a better deal for iTunes.

However, according to Derek Sivers of CDBaby, physical CD sales still account for the vast majority of purchases (he quotes 98%, though doesn't cite any data to back up that claim, nor does he account for the profit differential between physical and virtual goods), so it is very likely that you will be putting your CD on CDBaby anyway (as well as other store fronts, though the last time I checked, CDBaby provided the best deal for independent musicians, and I say that as an employee of the company CDBaby competes most directly against!).

Unfortunately, CDBaby requires an exclusive distribution contract for their various distributors, and doesn't allow you to opt-out of specific distributors such as iTunes or Rhapsody, meaning that unlike with TuneCore, CDBaby distribution is essentially all-or-nothing. But in exchange for selling on CDBaby CDBaby also no longer requires an exclusive distribution agreement, so you're free to go through multiple distributors if you like, though that can lead to confusion if it means you'll have your tracks listed multiple times on a single service. You also get your stuff listed on many more storefronts, making the 10% income difference well worth it as you'll likely make much more than 10% more in sales from the other distributors.

My recommendation, then, is to sell digital content exclusively via CDBaby, as the 25% additional income due to an expanded market far outweighs the 10% additional income due to a lack of commission fees, and the maximal risk is much lower.

However, TuneCore is brand new and is certainly working on additional partnerships. If they can get a few more big distributors (namely eMusic and Rhapsody) available, then my recommendation would certainly change to using TuneCore, for the first few years at least, before switching to CDBaby when sales have dropped off. Many of CDBaby's additional store offerings are certainly interesting, but so far they haven't ended up being a compelling enough reason to stay with CDBaby.

Of course, the best thing to do in any situation is to evaluate the various offerings for yourself. Opinions will surely differ on which intermediary to use; if you have any insights of your own, feel free to share them in the forum!

Things to keep in mind

1. As an independent musician, you're on the long tail of downloads. If you were in a position to make your living by getting your music downloaded, then you'd probably have someone else to manage these things.
2. Physical albums are much more versatile (you can sell them at shows), much more trustworthy (you can play them anywhere or convert them to a form which can be, and you don't have to worry about them evaporating if your computer dies), and provide a lot of stuff that downloads can't (album art, liner notes, etc.). This means a lot to many of the people who will be buying your music (see point #1).