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| Boston Herald: Music business gets real at online store |
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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."
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Way to go Derek, I just read the artical from the BOSTON HERALD.As always congradulations at what you do best,helping all of us musicians reach our dreams and live them ,like I,AM DOING NOW .THANK YOU Derek!! walter goulet
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Derek ,there are no words to say but keep up the great work and know that you have thousands of people behind you. We will support you and all your efforts. Youve made it possible for all our dreams to come true. The large record companies
always seem to forget where they came from and everything just gets all politcal and wrapped up in red tape. The saddest part is the artist gets totally lost in the process.
cdbaby artist "Rick"
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Nothing's beats revolution! ! !
So great to see the music in our hands.
Thanks for helping us all be pioneers Derek.
You da man!
Greg Fishman
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Congratulations, Derek! Great article in the Herald. The word is
really getting out about CD Baby. Thanks for staying true to
your principles. It's made all the difference to us independent
musicians.
Willie T
http://www.WillieTandDoctorX.com
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Way to go Derek and CDbaby staff! This is a great story and more evidence of the revolution. It's so inspiring to see a success story based on principles rather than the usual sellout.
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What an awesome story! It's especially great because we're all a part of it. Congrats to Derek, the CD Baby staff, and to all of the indie artists that are contributing in keeping this juggernaut rolling!
KevOz
http://www.KevOz.com
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Congrats once again to Derek!!
The article is great. Very informative. The only thing they fudged a little is the "circus" thing.
We all know Derek is and was an extremely successful guitar player! He toured all over the place. He went from one success to the next.
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The circus thing is true. I was in a circus from 1988 to 1998, and only had to stop when CD Baby started to take over my life.
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I'm currently stationed in Iraq and continue to sell cd's and count money in the bank. Thanks and keep selling my music.
Major Derrick Shoemake
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| by
on Tuesday July 06 2004 @ 11:14PM PDT [ reply | parent ] |
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all service men and woman should hear my song about the war in Iraq.. Tribute To Daddy.. our servicemen and woman are our heros ..yesterday..today and in the future.
BLUESTAR
TRIBUTE TO DADDY
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Like everyone else, the more I read, the better it sounds. Keep up the great work. I'm a one man band, and my music is instrumental, so it's "kinda hard" to promote my music via live shows. This is just another way to work it.
www.cdbaby.com/epiphora
www.epiphora.net
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Fantastic!!
We love CDBABY and the word is spreading!
Congratulations on the article and on sticking with your principles...making CDBABY the one REAL place for indie artists to feel at home AND to get exposure...
ZU
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It takes an indie artist to understand an indie artist. Derek has truly proven to be on top of supporting and believing in us the indie artists.
Hopefully someday, the major distributors will wake up and see that they're choking themselves with greed. CDBaby is the only "real" place for indie music at it's best. Check it out. It's like a baby walking thru a candy store!.
Sporatic T
http://www.thespores2000.com
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Congratulations Derek and the CDBaby staff this article makes all of the CD Baby members look good. I particularly like doing business with you because you care about my needs, and the needs of all of your members . You give them a chance and put them first. For that Hat's Off!
Thank You
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Congratulations Derek and the CDBaby staff this article makes all of the CD Baby members look good. I particularly like doing business with you because you care about my needs, and the needs of all of your members . You give them a chance and put them first. For that Hat's Off!
Thank You
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Derek,
Great article.Many can relate to the music business Big Shots who look down on anything remotely out of the Major Record big time Distributor's loop. CD Baby is the hottest thing going for independent musicians.There's a light at the end of the tunnel for CD Baby members in an otherwise cold world of experts who with amazement blame everyone but themselves for the ever-sinking ship of record sales.
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Hi Derek and/or CD Baby Staff,
Carol Harley with Misty River here. Say, I looked everywhere and could not find help on getting our new CD, "Willow" REVIEWED by reputable newspapers, magazines and music professionals. We've got the logical flat media to get reviews for us and some of our genres trade magazines, but we want some of the 'big guys' like: Billboard Magazine, The NY Times, THe Boston Globe, The LA Times etc. Do you have any suggestions?
Thanks,
Carol Harley
Misty River
http://www.mistyriverband.com
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Carol Harley, bribe the editors like the majors do, and they'll write anything you wish.
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To Derek and your decated staff,
It's about time somebody stood up and respected the Artist, since I've with CD baby I have received the respect. keep it going.
and Thank You.
Mr.Blues
www.ermittwilliams.com
www.huhaacm.com
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