Crenk

Im not too sure if this article will apply to the majority of our readers, but I thought I would run through a list of music distribution companies and work out who is worth using and who is not. All these companies are digital distribution companies, so they take music from artists all over the world and then distribute that music to the worlds largest online stores. All these companies take a cut for providing this service in some form or another.

We are also going to run through an example of how each site will work in terms of revenues for the artist. We will place 1 album per year for 2 years on each site. Each album will have 13 tracks. The artists actual sales were $0.99 per track and sold 1,000 tracks.

Cdbaby - Cdbaby is one of the old companies in this market and they provide some great services, even though the website they use seems to be outdated approx 5 years ago. The prices are as follows:

Setup: $35 one time fee

Cut for Distributor: 9% of all income

Partners: You dont have a choice at which online stores your music goes to, except for a very small list of selected retailers. The Cdbaby service is completely non-exclusive and doesnt tie up any of your rights. Their distribution partners include iTunes, eMusic, Hear Music, Last.fm, MusicNet, Napster, Rhapsody and others.

Example: The artist has to pay $35 upfront for first album and then another $35 for second album, totally $75 in initial outlay. Sales would be $0.99 x 1000 tracks sold, which equals $990, and the artist would receive $900.90. Profit equals $900.90 less $75 costs = $825.90

Tunecore - Tunecore is the new player on the block who has been getting a lot of press attention for their business model, while at the same time they have been signing some very big album distribution deals.

Setup: $19.98 Per Album Per Year Storage. Plus $0.99 per store per album. Plus $0.99 per track.

Cut for Distributor: Nothing in terms of income

Partners: The choice is yours, you can send your music to one or all of their partners. Partners include, iTunes, Amazon, Lala, Napster, Rhapsody, Music.com, eMusic and GroupieTunes.

Example: Costs would equal $19.98 x 2 for two years ($59.94), plus $0.99 per album for 5 stores ($9.90), plus 13 tracks on both albums at $0.99 each (25.74). Overall costs equal $95.58. Profit equals $990 less $95.58 in costs = $894.42

The Orchard - The Orchard is currently one of the worlds largest online distributors, they have over 350 retails partners in a variety of areas. Im not going to run through their sections because they are very straight forward. The Orchard as far as Im aware dont charge for inclusion into their catalogue, they also have a huge list of retail partners, but the big down side is that they are known for taking a very large percentage cut. Plus, everytime I rang them, I could never actually get to speak to a person with a little bit of intellegance that atually got back to me on time with information about what they can provide. The worst service I have seen in the industry.

RouteNote - RouteNote is the new player on the block. They have a very basic distribution model and a growing list of retail partners. Since they are new on the block they dont have as many retail partners as their rivals, but look for this to grow.

Setup: Free

Cut for Distributor: 10% of income

Partners: The choice is yours, you can send your music to one or all of their partners. Partners include, iTunes,  eMusic, Limewire and Audio Lunchbox. They are also in talks with Amazon and Rhapsody to add their options to the RouteNote service.

Example:$990 is sales and the artist would receive = $891 (with no upfront costs)

After this analysis it shows that Tunecore is the best option for artists to retain the most revenues. However, that being said the artist will have to pay a cost of $95.58 upfront and tasks the risk of having to make sure they sell 1000 tracks to make the correct money. RouteNote is a new service but the results speak for themselves. Their service brings is nearly as much money as Tunecore, but the artist doesnt have to pay anything upfront at all!

Disclosure - Im currently CEO of Insomnia Ltd which owns RouteNote.

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A while ago digital distribution company CD Baby started to sell their artists Mp’s direct from their own site. This has proved amazing popular and Derek Sivers reports that the company’s direct mp3 sales have exceed the revenues from most of their partners.

CD Baby sold $600,000 in mp3 downloads in the last few months, with NO marketing or announcements at all. Therefore, CD Baby sold more than emusic, Yahoo Music, Sony Connect, Verizon, MSN and Snocap.

The digital distribution space is just about to open up. CD Baby has been one of the leaders in the market, because they offer artists the ability to keep more money in their pockets. CD Baby will soon have a new competitor, RouteNote. RouteNote is a digital distribution company quite similar to CD Baby, but they will have an additional feature of licensing music. Allow artists to also have their music available to be licensed for TV, radio, games, etc, all while selling their music to the worlds largest online stores. Make sure you head over to their site and get a private beta invite.

Disclosures: Steven is currently CEO of Insomnia Ltd, which own and operate RouteNote.  

U.S. music sales dropped another 9.5% last year compared to 2006 despite a 44% increase in digital track sales according to Nielson Soundscan.

500.5 million albums sold in various formats last year down 15% from 2006. Only 10% of album sales were digital. But the drop re-calculates to 9.5% when sales of digital singles are counted as 10-track equivalent albums. 844.2 million digital tracks were sold in 2007 compared to 588.2 million in 2006.

iTunes became the third-largest music retailer in the U.S. in 2007.

The music industry is currently very close to my heart, especially on the internet. This is mostly due to the new project our company will be launching very soon, RouteNote.

With all the recent talk about the music industry and how it is suffering, there has been a few companies trying to push the envelope and develop a new model by which the industry will adopt. These models are ad supported and they come in different sizes and shapes. Within this post I will discuss these companies and there endeavors to change the industry their own way.

Imeem: Imeem is a social network that focuses on providing services and platforms that are fully supported by the advertising generate throughout the site. They are currently based in San Francisco right across the road from Snocap. Imeem is primarily focused around the music industry and they have been signing a lot of distribution deals with companies such as EMI. Imeem has also joined the new Open Social platform from Google, which is a big step forward for developers. Imeem doesnt allow users to download all the songs on the site, but it does pay artists for the amount of streams they receive compared to the overall streams on the site.

Qtrax: Qtrax is still yet to launch and is based on a innovative p2p file sharing platform. Qtrax has already signed deals with Universal, Sony/ATV, Warner Music Group, The Orchard, EMI Music Publishing and EMI Music, TVT Records, Go Digital, ASCAP and BMI. The Company is based in New York, New York and Melbourne, Australia. This platform pays artists royalties based on advertising, but they dont disclose much information at present.

Ruckus: Ruckus, the premier digital entertainment service for colleges and universities offers a myriad of ways for college students to connect with one another. Currently Ruckus has over 3.2 million tracks licensed in its catalog, from a mixture of indies and major labels. Ruckus dont really talk to much on their website about how they pay artists but im guessing it must be from streams on their player. Im not even too sure if you can download any of the songs from their catalog and be able to place them on your iPod!

These are just some of the major players in the ad supported music space at present, but there are several other notables, such as Spiral Frog, Slacker, RCRD LBL and We7.

There has been a buzz around the blogosphere in the last day or so about Pump Audio and how they have finally been intergrated with Getty Images. As most of us know Pump Audio was purchase by Getty Images for about $42 million. Pump has a catalog of approx 20,000 independent artists in which their music is licensed for use on the Web, TV or Radio. Pump’s customers range from major TV shows like The Colbert Report to advertising agencies and podcasters.

Getty yesterday announced that they have re-launched Pump Audio under the name Soundtrack on the Getty site. This must be the most over-hyped event from Getty in a very long time and I cant believe the blogosphere (Techcrunch, Mashable) has jumped onboard. It is as if Soundtrack was a completely new product and it has just be released, but that is the complete opposite to what has really happened. Soundtrack is a tool designed by Pump Audio most before the purchase and I have been using Soundtrack for the last six months or so. All Getty has done is place a link on their site to the Soundtrack tool. So why the hell is this getting blog and press coverage??