This month we are looking at two models of media publishing and distribution available today. In my last post, I covered the traditional forms of record labels and music publishers. There are those that find the traditional avenues afford them great success in their careers. There are others who find the same traditional models are more of a detriment to their careers than a help.
My industry sources tell me that across major, independent, and unsigned artists, the overall average for album sales is 1,000 albums sold. That is why many artists find it hard to realize any profits working with a record label. Even unsigned artists can find it difficult to make a profit with those numbers. There are, of course, both signed and unsigned artists that beat the averages and find success. The point of this post is to equip you with do-it-yourself tools so that as an unsigned artist you will have a better chance at success.
CDs in a Digital World?
The point of this blog is to focus on digital music technology, distribution, and marketing for independent artists and independent record labels. The traditional mediums of vinyl, cassette tapes, and CDs, along with the traditional distribution and marketing models, made it difficult for an independent to compete with major labels and their artists. Digital music and distribution has cut out much of the over-head previously incurred and leveled the playing field for all music makers. Even today, having CDs manufactured in bulk would create an overhead difficult to overcome given the averages of album sales previously mentioned.
Although digital music sales are growing rapidly, soon to overtake the sales of physical mediums, there is still a desire by some fans and artists to have a physical CD album. There is psychological gratification in being able to hold a tangible object and claim ownership, to peruse the artwork and printed materials while listening to the discs contents. So in this digital age, is there a hybrid model that allows for the occasional CD sale without incurring all the overheads associated with CD manufacturing?
The Disc-On-Demand model of music publishing and distribution comes to the rescue. My earliest recollection of this model was a product available several years ago on the original MP3.com website. The premise of this model is that an artist uploads digital music and artwork to a Disc-On-Demand service website. Instead of producing CDs in bulk, the site produces the CDs individually as fans buy the album from the site’s online store.
For this post, I wanted to find a site that could manufacture and distribute physical discs as well as aggregate digital music online. If no single site is the perfect solution, I wanted to find two sites that could compliment the services of each other.
I started by creating a Publish-On-Demand checklist using a spreadsheet to compare the services of CreateSpace, TuneCore, CD Baby, and LuLu. (click here for a PDF version of the spreadsheet) Although LuLu provides Disc-On-Demand services, their cost-per-disc is about 50 cents higher than CreateSpace’s costs, unless purchasing at least five copies, which makes it about 50 cents less. They also only market CDs on the LuLu website. Looking at the CD Baby site, I could not find a Disc-On-Demand service that they offered, just a replication service that starts at 500 discs minimum.
CreateSpace vs. TuneCore
I was left with CreateSpace and TuneCore, both offering Disc-On-Demand and digital music aggregator services. CreateSpace, a service of Amazon, sells discs strictly on Amazon or an eStore that the seller can set up. The cost-per-disc is $4.95, which the seller can buy for themselves at that cost. On top of that cost, CreateSpace takes an additional 15% from the sale price when the CD sells on an eStore and an additional 45% from the sale price when it sells on Amazon. TuneCore actually uses the same CreateSpace Disc-On-Demand service, but with a few minor differences. Sale prices for the discs are from $8.98 to $19.98 and the artist/seller receives a straight 40% of the sale price. The only way to receive a copy of the disc is to buy it from Amazon. So if the seller priced the disc at $8.98, the seller would then get back $3.59, making the disc actually cost them $5.39. Based on the rate scales, it would seem that TuneCore provides a better return when the public makes a purchase of the discs. TuneCore however has pre-designed templates and does not allow for custom artwork, while CreateSpace does. Both services will provide a UPC symbol for free or allow you to use your own.
For digital music aggregators, TuneCore is the best choice. CreateSpace only provides Amazon or an eStore as the distribution base for digital downloads. TuneCore allows for aggregating to several services including iTunes and Amazon. Although the information is a little vague, it seems that TuneCore may offer a better royalty rate on AmazonMP3 sales than a starting artist could get using CreateSpace. CD Baby offers a similar service to TuneCore, but only provides 91% of net profit while TuneCore provides the full 100%. The only cost for setting up with TuneCore is $9.99 for a single or $49.99 for a full album.
If you don’t care about custom artwork on your physical product, TuneCore is the perfect solution for all of your needs. If you are like me, you’ll want control over the artwork. My solution is to use TuneCore for all digital distribution and CreateSpace for physical distribution on Amazon. You can have either CreateSpace or TuneCore provide a UPC and then use it with the other service. That way, Nielsen SoundScan, the sales tracking for all albums sold in the United States and Canada, will use the UPC to include your physical and digital album sales together. When selling CDs from your artist or band website, be sure to link to the eStore set up for you by CreateSpace as opposed to using a direct link to Amazon. By linking to your eStore, you will take advantage of the better commission rate.
If you need a short-run of five discs or more for personal needs, use LuLu to save money on bulk production over CreateSpace’s costs. You can use the UPC created with either CreateSpace or TuneCore for your LuLu discs by incorporating it in the artwork you submit for printing. These discs could then be used to send to CD Baby to sell on their site as an additional revenue avenue to Amazon and provide distribution into various retail outlets. CD Baby requires a minimum of five discs be shipped to them.
If you find yourself ordering a larger number of CDs, watch your costs. There will quickly come a point where it will be better to switch from LuLu to DiscMakers for your manufacturing needs. DiscMakers will replicate CDs in jewel cases for $2.19 a disc with a minimum of one. The only downside is the shipping costs (for me it was $16 for one disc replicated, while LuLu offered $9 shipping for 5 discs). Compare the manufacturing costs and shipping costs to decide when to switch.
Independent artists and labels can take advantage of services such as CreateSpace and TuneCore to take full advantage of digital music distribution while allowing for the occasional demand for physical products. By minimizing overhead and maximizing profits, artist and labels will have the best chance at success.