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Data Point on Digital Music Distribution Revenue Splits

Following up on my post pointing to David Byrne’s excellent article about music distribution options for musicians, from the biggest acts to the smallest indies, I thought I’d offer a real world data point. My (very indie) record label, Toothless Monkey Music, distributes CDs through CDBaby, which I have to say is one of the best services around for independent musicians. When you put a CD up for sale on CDBaby, there’s a nominal up front fee ($35) to get a CD listed, and then CDBaby also takes care of digital distribution as well, so your music winds up available on iTunes, Rhapsody, Yahoo Music and many more. Oh, and it is a totally non-exclusive deal with CDBaby as well.

What’s best about CDBaby is their pricing: for physical CDs, they take $4 per CD sold. For digital distribution, the deal is even better, they take a 9% cut and pass the remainder on to the artist. Their full pricing menu is described here. So in the case of the iTunes music store, when my band Soul Patch sells a track (our best-selling track of all time on iTMS is the quirky Arabic Ska), we get $0.637 per $0.99 track sold, CDBaby gets about a nickel, and Apple gets the balance. The vast majority of the revenue in this case goes directly to the artist, with Apple’s cut going primarily towards their hosting costs and bandwidth. From my perspective, 64% of all recorded music revenue going directly to the artist is a pretty good deal.

Bottom line, the world has changed. If you are an independent artist and are able to handle your own marketing and promotion efforts, the economics of digital music sales weigh heavily in your favor, arguably more than ever before. Of course, one can argue that over time even the digital distribution revenue streams may vanish, but that’s a (much longer) discussion for another day.

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December 19th, 2007     Categories: Uncategorized    
  • http://profile.typekey.com/soundevolution/ soundevolution

    I saw an article – and forgot to bookmark it, urgh – that mentioned average artists appearing on iTunes represented by major music labels only get about 9% of the revenue. Even the credit card companies doing the charging were making more money out of iTunes purcahses than most of the artists themselves. The largest chunks going to Apple and the record label.
    Great to see a method where artists can make a significant amount from the sale. After all, they’re the ones creating the value, right?