Well, it was inevitable. To be honest, I'm kind of surprised it took this long. On May 22, 2023, I received an email that said, in part:
So CD Baby is no longer selling physical products (CDs, vinyl and cassettes) for independent musicians. They will continue to support the distribution and selling of digital products (downloads and streaming).
This has caused a shit-storm among DIY artists like myself - so much so that the CEO of Discmakers (a CD manufacturing service), Tony van Veen, felt obliged to respond to it.
Like Tony, I don't think all the angst is justified or relevant.
For those who don't know, CD Baby has done as well as anybody that I know of for functioning as a vehicle for independent artists to distribute and sell their music. And what's happened isn't their fault - it's the same thing that's happened across the board in the industry. Dealing with physical product distribution the way they have is no longer a sustainable business model.
When I first started with CD Baby the dominant media was the CD (thus the name!). I would charge $15.00 per CD. CD Baby would take $4.00. I thought that was amazing because they were warehousing the CDs and doing the shipping and handling. If their stock was low they would send me an email requesting more copies.
So I would ship batches of CDs to one place, they would warehouse them, handle the credit card transaction, ship the product to the purchaser, and send me $11.00 for every $15.00 sale. Every so often I would get checks from CD Baby for CD sales. It wasn't enough to live on but was a nice little addition to my other income streams - mainly teaching and gigging. And I had contact info for everyone who purchased.
Then people quit buying CDs and started buying single-song downloads. CD Baby compensated. They sent me a request-for-permission to rip my CDs and encode and distribute the songs across multiple platforms like Itunes, Spotify etc. There were dozens of platforms - each with a proprietary format - and CD Baby was doing all the legwork. I signed.
A single song download would sell for 99 cents (BTW - that's about what I used to pay for a 45 rpm single in the late sixties at the local record store). Out of the 99 cents I would get anywhere from 29 to 49 cents depending on the platform. So my percentage of the sale dropped considerably.
Then people quit buying single song downloads and started streaming. Again, CD Baby compensated. But now, my income from a single stream is a fraction of a cent. Take a look at this screenshot:
These are Spotify streams. The PAYABLE column on the right is my money. Just take the first one as an example: $0.00199381. That's what I made for that single stream. A MILLION streams would make me $1,993.81. To make a million bucks I need 501,552,304 streams. That's over 501 million streams.
See those page numbers at the bottom? They go on for days.
For comparison; if I made 39 cents per single song download, a million downloads would make me $390,000. And I would have email addresses.
If I made $11 per CD, a million CDs sold would make me $11,000,000.
Of course, there's an apples-to-oranges variable; a CD would have multiple songs, so 1 CD = say, a dozen songs. Nevertheless, making it easy:
A million CDs sold = 11 million dollars.
A million downloads sold = $390,000.
A million streams = $1,993.81.
Things have been going backwards for quite awhile. That's part of the reason my recording studio is packed up in boxes and sitting in my basement. I'm no longer investing time and money into writing and recording, I can't afford to be a songwriter anymore.
Recently, a video of Snoop Dogg ranting about the streaming services went viral (contains strong language):
"I mean, can someone explain to me how you can get a billion streams and not get a million dollars?"
Whenever I get any money from CD Baby, which is now very intermittent, there are tens of thousands of streams (not millions - I ain't no Snoop Dogg) and the total is like...wait for it...$32.46. And I have no access to information like, WHO is streaming my music?
I wrote about all this more in-depth in, Intellectual Property Rights Don't Work! What Now?
So for me, financially, the loss of CD Baby for sales and distribution of physical CDs is negligible. I only sell a few CDs a year anyway and those are merch at gigs. I can't remember the last time I sold a CD through CD Baby.
However, as a result of CD Baby getting out of the physical products realm I've realized that all the links on my website to purchase my CDs are broken.(MasterGuitar.com)
Broken links on a webpage are not good. They directly harm SEO (Search Engine Optimization) rankings.
So my choices are:
I could just delete the sales pages from my website and eliminate any ability to purchase my CDs online. It would make little difference to my bottom line. That fixes the broken links problem...but it doesn't. It creates more broken links because all the links to that sales page would then be broken, and there's a crap-ton of those.
Create my own online infrastructure for selling physical CDs. Or even my out-of-print cassettes. Or physical book sales which I quit doing a while back.
Number 2 seems like a lot of work for not very much return and feels like a throwback to old ground that's already been covered.
A few years ago I shut down my Subscribing Teachers Program, discontinued book sales, formatted my books as PDFs and now sell them as digital downloads. No manufacturing, printing, warehousing, handling and shipping costs. No trips to the Post Office or Fedex store. I get some organic sales here and there without any marketing or promotion at all, in spite of burying the page on the website and actually discouraging the sale on the sales page!
I still sell physical books to my personal students, but that's it.
I'm not gonna go back to selling physical books and having to deal with all the issues that caused me to stop doing that in the first place.
Aaand......I've got a bunch of cassettes from the early nineties still in shrink wrap. How pathetic is that? My last cassette release was 1993. That's 30 years ago! I wonder if they would still play?
I actually made money with the cassette releases. My last CD was 2006 and I still haven't broken even on it. I'm close though! Really!
Furthermore, my music is all over YouTube and most streaming platforms anyway. If you want to hear it, you can - without buying a CD. Maybe I'll get .00199381 of a cent when you do.
Incidentally, I've made way more money selling guitar lesson downloads than I have from all my CDs and tapes combined.
But when it comes to my CDs, I have thousands of 'em sitting in my basement. Few people buy CDs anymore. According to the Recording Industry Association of America (RIAA), CD album sales in the United States have dropped by 95 percent since peaking in 2000.
I've read some things recently where supposedly people are all breathless about how CD sales are increasing - "If you think CDs are dead, then you're wrong."
Dude...no. See that little, teeny-tiny rise at the end of the chart for 2021? Now see the peak at 2000? You think sales can come back to anywhere near that?
That little, teeny-tiny rise, according to Billboard, is mainly due to 3 things; Adele, Taylor Swift and BTS, who all released smash albums in 2021. Those 3 acts received the lion's share of that teeny-tiny little bump. Plus, each one of those acts has multiple BILLIONS of streams.
According to Tony van Veen - keep in mind he is the CEO of a CD manufacturing business - 90% of all streaming royalties go to the top 1% of artists, leaving the remaining 10% for everyone else. In order for a guy like me to make 50 grand a year from streaming, I would have to have about a million streams per month. In Tony's words, "Almost impossible."
Getting back to my broken links dilemma caused by CD Baby's discontinued sales and distribution services, I already have an infrastructure in place. That would be my Gumroad account which I've used for years to sell digital downloads from my teaching website, MasterGuitarSchool.com.
So it wouldn't be too much work, nor would it take a lot of time to create pages on Gumroad and fix the broken links on my website. It would also avoid all the broken links that deleting the sales pages from my website would cause. If I sold even 3 CDs I would net about the same as a 30-minute guitar lesson, which is about how long it would take me to create the pages for the sales on Gumroad. But then I would have to buy shipping supplies and make a trip, or trips, to the Post Office - if I sold any CDs, that is. Which I probably won't. Even if I sold zero CDs, at least I wouldn't have the broken link problem. It seems to me that that right there makes it worthwhile to set up my own online point-of-sale. Ah what the hell, let's see what happens - but I'm only shipping inside the U.S. for now; I don't feel like doing the research to determine shipping costs elsewhere.
Or...if you show up to any of my gigs I'll have a few CDs with me.
Old habits die hard.
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