Do It Yourself: Modern Music Distribution

On October 10, 2007, legendary rock-and-roll band Radiohead released their latest album, In Rainbows, with an innovative new business model. They sold the album on their website via mp3 download, and fans could pay whatever price they chose, whether it be $0 or $50. This event was widely covered by the media, and proved to be quite profitable for the band. However, some argue that the success was brought by the media. Sarah Lewitinn, co-founder of Stolen Transmissions Records told the New York Times that "for one thing, only established acts with an extremely dedicated fan base could prosper that way. For another, the novelty would wear off quickly." Whether or not Radiohead started the trend, or was merely the most public example, many models of digital music distribution circumventing music labels are beginning to gain popularity. The most successful of these are CD Baby and TuneCore (at right), the latter of which was financed $7 million by Opus Capital on October 27, 2008. These companies distribute music through Amazon MP3, iTunes, Napster, Rhapsody, and more, with no need to be signed to any record label. Artists also retain ownership of the master recordings, and 100% of the royalties. While businesses like these do not help the major labels recover from their already faltering album sales, I think that they are ultimately good for the music industry, because it puts power in the hands of artists, and allows for young artists to grow.

CD Baby's business model works as a percentage cut of income received from the purchase of an artist's work. They keep 9%, and pay the artist 91% of the money made on digital downloads, they also will sell artist's physical CD on their site, of which they keep $4. This is a great way for small bands to have a national distribution for nothing more than the one-time $35 start-up fee. Part of the mission statement for CD Baby reads: "We only sell music that comes directly from the musicians. No distributors... In a regular record deal or distribution deal, musicians only make $1-$2 per album, if they ever get paid by their label. When selling through CD Baby, musicians make $6-$12 per album, and get paid weekly." TuneCore delivers a similar service with a slightly different method of setting up accounts. With TuneCore's setup, the artist pays a $19.98 annual fee per album for maintenance and storage, $0.99 per song, and $0.99 per online store, per album. Once these fees are paid, the artist receives 100% of the income received from purchases of their music, regardless of how popular they are. Cnet writer Matt Rosoff calculated in his blog, Digital Noise, that TuneCore will always be the better deal in the first year, because of the start up fees, but after that, an artist must sell around 370 downloads a year to do better with TuneCore than they would with CD Baby. For large acts, 370 downloads would be no problem at all, and a few established bands have already taken advantage of this, Nine Inch Nails probably being the most notable.

Around the same time as Radiohead ditched their label and tried alternative distribution channels, Nine Inch Nails front-man, Trent Reznor, announced that they too would be self-distributing their album Ghosts I-IV. Their sales system would include a 9-track free sampler, and a 36-track album for $5 available only on AmazonMP3 through TuneCore. In his blog Music Business and Trend-Mongering, Berklee Music professor Mike King does the math and shows that Trent Reznor only had to pay $56.61 to list his 36-track album on AmazonMP3. A TuneCore spokesman who commented on the blog verified this fact: "He did! He paid the same as everyone else, no special deals. I suspect Mr. Reznor can afford it. :)." After being listed, that album went on to make $1.6 million dollars in the first week. This is an extreme example, but makes the point that services like TuneCore and CD Baby have the ability to make an artist's income from record sales directly linked to their success, which is not always the case in the major label system.

Radiohead's system requires that the band be already established, and just making music available is not enough to make it popular or successful, no matter what the distribution channel. Major labels can promote musicians in unrivaled ways, and that is why artists still sign with them, and in doing so, forfeit most of the money made in their name. That's why do-it-yourself distribution is good for the artist. Although it is harder to gain attention as a new band, if any notoriety is reached, there is much more to be gained. More importantly, the success will be based on musical merit rather than marketing dollars. In his blog, Future of Music, Dave Kusek writes: "There is a lot of discussion these days about free music and the decline of the power and influence of the major record labels. However, I would argue that music has always been free in one form or another, throughout history and that the relationship between the artists and their fans - the artists and their patrons is what really matters." In my eyes, distribution companies like CD Baby and ToneCore do more than ever to directly, and globally, connect musicians and fans, and in doing so help pioneer the future of the music industry.

Fact and Opinion: Facets of the Music Industry

Recently, I have been scouring the Internet for interesting and reputable sites I may reference or study in order to write effectively about the modernization of the music industry. In this process, I came across commentary coming from magazine sources, college professors, people in the industry, artists, music organizations, and more. Whatever the source, however, they were presented in one of three ways, either as a blog, as news articles, or as a combination of both. For the sake of this post, I will define a blog as attempting to present some sort of opinion along with the facts, while a news article attempts to stay objective on the matter at hand. Considering the criteria offered from both the Webby Awards, and the IMSA about what constitutes a good post, I critiqued 20 different sources of music industry- related information online. The aspects taken into account were: content, structure, visual design, functionality, interactivity, and the overall experience. All of the sites have been added to my linkroll, but I will also critique each of them on Amateur Arbitration. Each has aspects of good and bad, and, for the most part, each of them attempts to serve a slightly unique purpose.

In the way of the blogs, Ad-Supported Music Central offers an interesting look at the direction that the industry is heading to. The content in this blog is usually timely, and well reported, however it is not posted frequently enough to make it a staple of music blogs. It is visually appealing, almost to the point of being gaudy. Coolfer (at right) is another blog that deals with very current issues, and does so in a quite concise and informed way. They also do a great job creating an interactivity with their many links. Visually simple, Coolfer is a professional and respectable blog. Not so professional, and possibly more interesting because of it, are blogs Hypebot and Idolator. Both of these blogs comment on very current issues in an irreverent, yet informative way. While Idolator is more visually pleasing, Hypebot is far more functional, serving to link to other related stories and comments. Wired Music comments on some very unique issues. Though it is not particularly interactive or structured in a unique way, Wired does a great job of finding interesting content. The blogs with the best content, however, are all part of the same ring. Future of Music, Music Business and Trend-Mongering, and Music Publishing and Songwriting, are all blogs written by faculty at Berklee College of Music. It appears to be part of their job description, as nearly every faculty member has their own blog. These three in particular are especially pertinent to this blog. The frequent posts prove to be cutting edge in content, and are as well informed, and written as could be expected from college professors in the field. While not visually stimulating, these blogs do a great job of providing links to each other, as well as defining their purpose.

Music industry news sites run the gamut of the criteria as well. Sites like The Daily Chord, Music Industry News Network, and Digital Music News deliver great stories from all aspects of the music industry, as well as networking, or personal ads. Digital Music News even has a login, and a job posting board. However all three of these sites are lacking in structure and visual design. They feel like they are simply a page filled with links and nothing more. This does not make the reader want to explore. On the opposite end of the spectrum are sites like RIAA and Billboard.biz. Their designs are very streamlined, professional, and interesting. They give dependable stories, however they are very geared towards the mainstream, and tend to be a beat behind on the latest issues. Music Radar is a very well rounded news site regarding the latest in music equipment. It is aesthetically pleasing, as well as easy to navigate although a bit crowded. Although Music Radar is a very well-done site, it's niche is too small to compete with sites like Pitchfork (at left), Pollstar, and Last.fm. Pollstar is geared towards the live music aspect of the industry, and Last.fm is geared heavily towards the interactive music community, while Pitchfork chronicles the recording aspect of the industry. Based on their quality content, functionality, visual design and great structure, these sites offer a great overall experience, which is why they are each the leader in their niche.

A few sites offer both opinion and fact, for instance Drowned in Sound mixes industry news with music commentary in a visually appealing way. What Drowned in Sound lacks is an aspect of interaction with the reader. Stereogum also combines the blog aspect with the news aspect, and is structured remarkably well, with different sections of the site easily accessible. The site promotes interaction by giving away and streaming mp3s, but the site lacks relevant or particularly engaging news content. The last site that attempts to do both is Music News Net. It provides news, and reviews, though the news seems more to be a sort of celebrity gossip. It's simple and easy to navigate, though Music News Net, like all the sites that try to combine the fact and opinion don't seem to have a clearly defined function or purpose.

It's important to analyze as many sites as possible, as they are a testament to the music industry. All of the 20 sites in the linkroll help to show me what aspects of the industry people find appealing, as well as gave me a window into the status of the industry and it's issues as a whole.