Sell your CD releases online

[Jim Alfredson]

CDBaby is a fantastic company. I really hope it isn't bought out by a major label and screwed with. Derek has integrity and has set up a site for working musicians to make money.

We had good sales over the holidays ourselves... I think about $200 worth.

[Phil Meloy]

Here's another UK based jazz CD retail site called JazzStore Online at www.jazzstoreonline.com It's not got a large catalogue at the moment but I know that they are interested in hearing from any jazz musicians or independent jazz labels who wish to sell their CDs through the site.

Edited February 16, 2004 by Phil Meloy

[Phil Meloy]

For any of you guys selling your CDs through CD Baby Derek Sivers has just announced this in the News section of their site...

If you have too many boxes of CDs in your garage, or you care more about getting your CDs into people's hands than how much $-per-CD you make, check out this new CD Baby idea:

I'm going to make a special section of cdbaby.com called "$5 SPECIALS" - a gallery of CDs on sale for only $5.

The wonderful catch is that customers must buy a MINIMUM OF 3 DIFFERENT "$5 SPECIAL" CDs in order to get the discount! (In other words: "3 for $15" or actually "buy 3 or more for $5 each".) It will put it into their shopping cart at full price, but tell them if they add two other CDs from the "$5 SPECIALS" area, that all of those special CDs in their cart will drop to $5.

This will encourage customers to browse around, choosing at least three different "$5 Special" albums before leaving. There will be no limit. I'm sure many customers will buy 20 CDs for $100! (Again: the sale will be for getting at least three *different* CDs, not three of the same CD.)

THIS IS TOTALLY OPTIONAL, so if you want your CD to be in there, you have to:

#1 - log in your CD Baby account at https://members.cdbaby.com

#2 - click EDIT ALBUM INFO next to the CD

#3 - edit the "OPTIONAL" section at the bottom of the list.

#4 - choose "YES" from the menu at the bottom that asks if you want to be in the "$5 SPECIAL SALE" area.

#5 - once you click the [those are my options] button at the bottom, you're in.

For CDs sold in the $5 Special, you get $3, we get $2.

No variations or special favors allowed. Not $6. Not $4. Just $5. Everyone in it gets the same deal.

NOTE: you can come back at any time to remove it from the sale, or switch it as often as you'd like. (Example: you could do an every-Tuesday sale, by putting it in every Monday night, and taking it out every Tuesday night.)

The ONLY difference between this and a normal sale:

* - You get $3 we get $2.

* - The $5 special will override any other quantity-discounts you are doing

* - CDs sold for $5 will not pay the $1-per-CD referral fee to our linking partners-affiliate program. (But that doesn't affect musicians anyway. That's only for external companies like garageband.com, iuma.com, and zines/portals.)

Everything else is the same if you do this, FOR EXAMPLE:

* - it will not affect your normal CD Baby page

* - it will not affect your normal selling price

* - it will not affect Tower Records' price (this is a cdbaby.com sale only)

* - $5 CDs sold will count towards our top-seller charts and sales reporting.

* - everything else not mentioned

Sign up now, if interested. I'll be launching it on the website in March, and emailing customers about it, so you'll probably want to sign up in advance if you want to be there at the start.

Now be careful, don't just change your selling price. Make sure to follow those #1, 2, 3, 4, 5 directions, above.

[scottb]

This $5 deal sounds good to me! I've been doing some listening lately and have found some interesting stuff. This special will likely have me buying several discs.

[Phil Meloy]

The Boston Herald has just published the following article on CD Baby...

Music business gets real at online store

By Larry Katz - BOSTON HERALD

Friday, March 5, 2004

Five years ago, Derek Sivers was working as a part-time ringmaster of a children's circus in Western Massachusetts.

Now he's the head of a booming business Esquire magazine tagged "the record store of the future'' when it featured Sivers in its "Best & Brightest" issue.

Sivers, 33, is the founder of CD Baby, an online record store that sells music made by independent artists and follows an idealistic business model.

It's a formula that's clicked with unsigned musicians and their fans.

While the major record labels and traditional record retailers squawk about declining CD sales, illegal downloading, piracy and the death of the music industry as we know it, cdbaby.com has seen its sales double every year since its inception in 1998, when sales totaled just $9,000. After taking in $2.5 million in 2002, cdbaby.com grossed $4.65 million in 2003. Total sales have now climbed past $10 million. Pretty good for a business that Sivers started with a home computer and an empty closet.

"The birth of CD Baby goes back to the early days of the Internet. Around 1995 the Internet was completely noncommerical. There was a great vibe on the Internet. If there was something that you knew, you shared it. That kind of vibe led to CD Baby.

"I had this band called Hit Me," says Sivers, a former Berklee College of Music guitarist. "We had a CD that had sold 1,500 copies at shows, but none of the online stores that were around back then would take it. They all said, 'Where's your distributor?' I thought, 'This is messed up. I don't want to get my CD into shopping malls. I just want to sell it directly to people who want it.'

"So I got my own credit-card merchant account. I meant to sell CDs for me and a few friends, but I started getting calls. 'Hey, dude, my friend Dave said you could sell my CD.' I was like, 'Sure, bring it on.' I kept getting more calls. In 1998 I said it was time to give this thing a name, put up its own Web page and set up a little store."

Sivers soon had a closet filled with CDs in his Woodstock, NY, home. Then a second closet. Then a garage. After two years, Sivers decided he wanted to live in a warmer climate and moved to Portland. Now CD Baby has 35 employees and two airplane hangar-sized warehouses filled with CDs.

More than 45,000 independent artists sell their CDs through its amusing, user-friendly Web site, including 1,457 from the Boston area.

"The biggest ingredient to its success," Sivers says, "is that I've resisted all the temptations to turn it into a greedier service. I've turned down all investors and all advertisers. I wanted this thing to have ideals, so I insisted on four important points.

"First, the musicians would get paid every week. Second, the musicians would always get to know the names and addresses of the people buying their music. Third, they would never get kicked out of the system for not selling enough. So even if you sell one CD every five years, CD Baby will never kick you out. And fourth, the site would never sell out and allow paid placement or ads so artists with big bucks could bury those without. We've kept CD Baby true to that mission."

Any artist with a CD can join CD Baby for a onetime $35 fee. CD Baby keeps $4 from every CD sold. The artist, who sets the list price, usually $10-15, keeps the rest. It's a much better return than that offered by the major labels, who pay most performers less than $1 per unit sold.

Just ask singer-songwriter Melissa Ferrick. The Newburyport resident has gone from a major label deal with Atlantic Records to the small What Are Records? label to selling her own CDs through CD Baby.

"I love CD Baby," Ferrick says. "It's an integral part of how I make money and survive as an artist. After watching Ani (DiFranco) and Aimee (Mann) run their own labels, I figured I could make a lot more money putting CDs out on my own and reinvesting in my own career. I needed a way to sell hard copies via the Internet, and CD Baby was it.

"I charge $15 for a CD and CD Baby takes four. It costs me about $2 to press a CD and a little bit for shipping, so I make about $8.50 a record, which is really good. I'm selling 10,000 or 15,000 units. Do the math. And now thanks to Derek and CD Baby, my records are available as downloads at iTunes."

Melissa Ferrick, along with Jack Johnson, Dan Zanes, O.A.R. and Alexi Murdoch, is one of CD Baby's best-selling and best-known artists. But the vast majority of CDs come from unknowns struggling for recognition. For them, CD Baby offers more hope than cash.

"I think I've sold 10 CDs or something," says jazz pianist Daniela Schachter, who came to Boston from her native Sicily to study at Berklee. "But that's because I need to promote myself more.

"I'm very happy with CD Baby. It's not only about selling CDs. You make connections. People from Japan have bought the CDs. People listen to my music though the Web site. I get phone calls from people who found out about my music on CD Baby. That's what is most important. Letting people know what I'm doing with my music."

With a Web page designed to be a playground for music lovers, cdbaby.com is at heart a place to discover new music by new artists. Ferrick says she found her current opening act, Edie Carey, when Carey's name popped up as a search result for "If you like Melissa Ferrick, you might like..." Customers can browse virtual CD stacks organized by genre, geography or whimsical categories such as "Sick of All Normal Music," "Smash! Burn! Destroy! Rage!" and "Naked on CD Cover."

"The whole downturn of the music industry we keep hearing about hasn't touched us or the artists we work with at all," Sivers says. "At CD Baby, we live in this little utopian bubble."

[Phil Meloy]

CD Baby has just past the 7 million dollar mark in payments to independent musicians.

[Jazzmoose]

And from the consumer side of the story, some of that money is now mine! Cool stuff, too...

[Phil Meloy]

For the past six months we have been reporting all CD Baby albums to Google's new shopping service called FROOGLE: http://froogle.google.com If any of your fans are searching for your CD there, they'll be sure to find it.

[Phil Meloy]

Here's another article that has appeared on CD Baby....

Baby, you're the best!

By Derrick Bang/Enterprise entertainment editor

It seems appropriate that a new business model emerging during the infancy of the recorded music revolution would call itself CD Baby.

But this company ain't no babe in the woods; CD Baby is the future of the music business.

I first encountered the still largely unknown outfit last autumn, while researching titles for my annual survey of new holiday jazz releases. A diligent Internet session produced a few musicians whose albums were available from an online business whose name - CD Baby - initially sounded like a joke.

I quickly learned otherwise.

After finding CD Baby's Web site, I was staggered by the sheer volume of titles available in its massive catalogue. Holiday jazz is, as you might expect, a pretty specialized niche category, and yet CD Baby kept me busy for weeks, while I sifted through hundreds of albums.

The mechanics of a visit to CD Baby will be familiar to those with experience at Amazon.com, although with a few key distinctions. Whereas Amazon.com gives 30- or 60-second examples of a few tracks from most albums, you can play several entire songs from each album at CD Baby ... which gives a far better indication of whether you'll truly enjoy it. The prices also tend to be better at CD Baby, where the average album costs between $10 and $12.

CD Baby specializes in independent, micro-label and amateur releases: all the music largely overlooked these days by the dinosaur-like major labels, and certainly ignored when it comes to radio airplay. Frustrated music fans who've grown tired of hearing the same 40 songs from the same 10 albums, on every station on the FM and AM dial, will delight in CD Baby's astonishing wealth of variety and quality.

Note that last word: quality. One must not equate "independent" with "junk." Just as many of today's most intriguing and provocative movies come from independent and foreign filmmakers, plenty of great musicians - and their music - are just waiting to be discovered by fans ill-served by major labels too concerned with finding the next Eminem or Norah Jones.

Half a dozen of the Christmas jazz albums purchased from CD Baby immediately shot to the top of my list of favorites. They're professional albums made by talented musicians and production personnel, and I'd match them - any day, any time - against what I found at Tower Records and Borders last November and December. Perhaps the only giveaway, when comparing the average indie release with something on (say) the Sony label, is that the former's CD booklet layout and art might look less polished. But that obviously doesn't affect the music, and merely reinforces the adage that one must not judge an album by its cover.

Granted, CD Baby's catalogue contains its share of trash and puerile junk by wannabe pretenders lacking the slightest ounce of talent ... but so does any conventional retail outlet. The difference is that CD Baby puts the decision fully in our hands, giving us the ability to hear enough samples to make a valid judgment, without the distraction of a bothersome - and, let's face it, largely irrelevant - mass-market advertising campaign.

CD Baby president and founder Derek Sivers, a musician to the core, identifies himself as a "hyperactive non-conformist minimalist optimist ... learning addict, social introvert, anti-social extrovert, marketing whiz, storyteller, design fanatic ... and owner of the world's longest attention span." Sivers has been a full-time musician since 1992, and he started CD Baby (you'll love this) in 1997 to sell his own album, and those of a few friends.

Sivers intended this upstart business endeavor to be a hobby; for the first year, he'd put the day's orders in his backpack and ride his bicycle down to the Post Office. But the "hobby" quickly took over his life. As CD Baby grew, and because he couldn't afford to hire a programmer, Sivers learned PHP, MySQL, Apache and OpenBSD himself, and now the technical/programming/design side of things is his favorite part.

John Steup, CD Baby's vice president and "manager of all things," identifies himself as a writer, poet, musician, carpenter, blacksmith, geo major, proud husband and dad. He loves "bad jokes and tribal beats," was raised on "classical, jazz, showtunes and The Beatles," quickly embraced "everything from Robert Johnson to the Sex Pistols to Bauhaus and beyond," and "played in crunchy heavy bands throughout the '80s."

Steup started working for Sivers part-time when CD baby had 200 artists, and now he runs the place.

CD Baby as we know it today set up shop in March 1998, and currently is located in a pair of 5,000-foot warehouses in Portland, Ore. Still a baby by most definitions, the company is the largest seller of independent CDs on the Web.

The business has doubled in size every year, and the busy gremlins in the CD Baby warehouses currently receive and process 100 new discs per day. The company employed seven people in 2000, fields a staff of 45 today, and expects to hire another 10-15 by next year ... not to mention expanding into a nearby 18,000-foot warehouse that Sivers and Steup have their eyes on.

The numbers are staggering. CD Baby handled 180 orders a month in late 1998, a number that jumped to 25,000 per month as of December 2003. More than 65,000 artists sell their albums at CD Baby, which maintains a rigorous practice of paying royalties to these clients every single week. (Put that in your corporate pipe and smoke it!)

When last I looked, the company had sold 1,027,079 CDs and paid $8.2 million to its client artists.

Steup recalled a phone call he received from one astonished singer/songwriter - as it eventually transpired, one of CD Baby's better sellers - after she received her first weekly royalty check.

"She told me it was the first time she'd ever been sent a royalty check," Steup said, "from any label."

If this truly represents the way that corporate Music America behaves - not to mention (sadly), many of the mid-sized labels - then, clearly, they all deserve to go the way of the dinosaurs they've become, gasping for air as the tar closes over their greedy heads.

Industry behemoths continue to charge $18.99 and up for an item that costs less than a buck to produce, they stiff and otherwise litigate even their highest-profile artists, and hire seven-figure attorneys to combat online music piracy ... all while CD Baby grows, thrives and threatens to bury them in the very Internet environment that Hollywood regards with such horror.

Which brings me to another example of Sivers and Steup's marketing savvy:

CD Baby digitizes every new album that comes through the door. At the moment, all this music is stored in four to six 200-gig drives in each of 40 computer towers tucked into a back corner of one warehouse. The reason is obvious: Sivers & Co. know full well that we're only a few years away from a complete overhaul of the way popular music reaches us ... and the new delivery systems will be digital.

The evidence surrounds us already: Apple has married its incredibly popular iPods with iTunes, becoming the first successful endeavor to beat music downloaders at their own game. (Ancient rules of warfare: Embrace the enemy, and you own him forever.) Satellite radio is blossoming exponentially as these words are typed, with Sirius and XM bringing commercial-free music to cars and homes across the entire country.

Music distributors able to supply digital product to such operations will have a major advantage over those who cannot ... and the former's artists are fully aware of the implications: a much wider audience for their music.

Finding CD Baby isn't easy; the twin warehouses are in an unassuming industrial neighborhood in northeast Portland, practically off the map. The buildings have no prominent signs; the only clue that you've found the right place is a largish version of the company logo, propped against one front window.

The employees are dressed casually, and many seem to be eating ... constantly. Indeed, the working environment resembles an extended pot-luck party, with everybody bringing various food items - running the gamut from healthy to un - to share with the group. The atmosphere - cheerful, lively and extremely friendly - feels very much like the largest and best independent music or book stores I've visited, such as Amoeba Records, in Berkeley; or Powell's Books, also in Portland.

And small wonder: Like Sivers and Steup, most of these people are musicians themselves. They live and breathe music, and the various warehouse departments reverberate with an ever-changing mix of tracks from the very CDs they sell. In other words, everybody at CD Baby knows the product, so if you cite half a dozen favorite albums or artists, they'll suggest half a dozen more for you to try.

The one down side is that CD Baby is strictly an Internet endeavor; the company has no store front, and publishes no catalogue. One must visit and conduct business on the Web. Steup admitted that they'd flirted with a partial catalogue for distribution at trade shows, but the concept wasn't practical; the contents were outdated before the ink was dry.

If you don't like what you get, CD Baby will issue a full refund if the disc is returned within 14 days ... no questions asked. Steup regards himself as a problem solver, and takes particular delight in defusing the most hostile customers (not that CD Baby gets many). He'll do anything - refund postage, send a few freebies by way of consolation - to transform an irate caller to a new best friend. Given how hard it is to find a live human being at most companies these days, and the indifference one encounters upon reaching one, I can well imagine that Steup's behavior induces stunned (but pleased) silence.

And yes, Steup and his staff have encountered occasional customers who, ah, take undo advantage of the return policy. Clearly they're copying and then returning the CDs, but such behavior is blindingly obvious.

"When we spot one," Steup said, "We tell 'em, 'We know what you're doing ... cut it out.'

"They always stop."

CD Baby's warehouse walls are painted in bright solid colors: yellows, reds, purples, greens. Steup's small office has room for little more than a desk and computer, on which he eagerly shares his company's impressive sales figures and growth charts.

This is one of the few businesses I've ever seen that actually understands how to properly exploit the tremendous power of computers, in terms of tracking sales operations; with a few keystrokes, Steup highlights a just-going-out-the-door sale, and shows how it impacts totals for that day, month and 2004 as a whole.

Steup makes a lively tour guide, pausing when necessary to answer questions from staffers who don't hesitate to interrupt; this is not a guy who hides behind (or abuses) his title. He reveals and explains every facet of the operation, although it's not really that complicated: CDs arrive, get catalogued and digitized, and are stored on the massive shelves that take up the bulk of the warehouse space. Orders are filled as rapidly as they arrive, the requested CDs are located easily (thanks to alphabetical/numerical coding and filing), stuffed into mailers or boxes, and collected by U.S. Postage trucks that arrive daily.

Unlike distributor operations that act as middlemen and often won't obtain product until an order is placed for it - thus lengthening the customer's wait - CD Baby has all its stock at all times, and can fill an order within hours. And does.

Artists looking to market their music couldn't be in better hands. The CD Baby "starter kit" costs a paltry one-time free of $35. The artist fills out a submission form, describing how the album should be marketed, and sends five copies of the disc. CD Baby then creates a Web page dedicated to showcasing and selling this CD. The site will include sound clips, links back to the artist or group's own Web site, reviews and all the desired text and descriptions.

This new Web site is placed into galleries and search engines at cdbaby.com, which gets more than 150,000 hits per day. CD Baby takes all credit card orders for the CD, online or through the toll-free phone number (1-800-BUY-MY-CD, for orders only), and sends an e-mail notification every time the disc is sold, to tell the artist/group who bought it. (Customers can request to remain anonymous, if desired.)

That $35 set-up fee lasts forever. CD Baby won't ever tell a band that its disc isn't selling enough. Even if the album moves at the rate of one disc per decade, CD Baby will warehouse and fill orders against the original five copies. More happily, if those five copies blast out quickly, the artist will be asked to refill the shelf (perhaps more than five at a time, depending on interest).

CD Baby takes $4 per disc sold. The artists set their own retail price.

The arrangement is nonexclusive, with no contracts to sign. CD Baby is not a record label, just a record store. The CDs need not be shrink-wrapped, and CD Baby will even accept and market a home-made CD-R, "as long as it looks good."

Fill out the form, pay $35 and send five CDs ... and Steup and his merry minions will do the rest.

Frankly, I didn't want to leave.

Although he clearly would have chatted for hours, Steup had plenty on his plate; I didn't want to abuse his hospitality. More to the point, I knew that if he released me in the stacks - as I secretly hoped might occur - weeks would pass before I emerged again.

Not wise.

So I contented myself with a CD Baby T-shirt, and the certain knowledge that, when family obligations bring me back to Portland, I'll find that Sivers' "little hobby" has grown and grown and grown again, on the mother's milk of marketing genius, shrewd business acumen and the best customer interaction one could imagine.

Heck, I'd place a new order just to get another of their droll e-mail confirmations.