Posted on 28 November 2011 by Delta Dreams

TUNECORE vs CDBABYCDBABY was one of the first companies to distribute independent music CDs and MP3s to stores like iTunes, Rhapsody, and Amazon. It was a godsend for independent musicians. Before it was nearly impossible to get our music distributed and seen next to major label artists like Justin Timberlake, Britney Spears, Lady Gaga, etc. CDBABY charged a flat fee (about $50 initial per album release) and 9% of sales. This seemed a very reasonable price to pay to distribute your music while maintaining 100% of your song copyright.

Then TUNECORE came along with their model of digital distribution. For a flat initial fee (also about $50 per album release) and annual fee, they would also distribute your music to major online stores like iTunes and Amazon. A lot of major artists jumped on board such as Nine Inch Nails, Public Enemy and Jay-Z to distribute their music. They did not charge a 9% fee arguing that other independent distributors were taking a cut that was not justified for each digital transaction. After all, once the store received the music, it is the artist that does the promotion to get the fans to buy from digital stores like iTunes. TUNECORE’s website was very clean, slick, easy to use and thus very appealing. I started distributing my new albums with TUNECORE because I agreed with their logic (at the time). Artists shouldn’t be paying 9% of transaction sales. It’s like FedEx or the post office taking a cut for each item sold after they were paid to distribute it in bulk. They had no hand in promoting the music so why should they take a cut after it has been delivered?

However, over the years TUNECORE’s annual fee started being raised tremendously. In the very beginning, it was $7.99/album per year. Then, it was raised to $19.99/per album per year and recently $50.00/per album per year. Spending $50.00 a year for an album release is not much in the grand scheme of things. However, the change in price is applied to NEW as well as OLD releases. This means that the initially agreed upon price has changed and if you don’t pay, TUNECORE will take down your music from the stores. The issue is complicated further because all of the Internet links that points to your TUNECORE-released album are also invalid – even if you renew/redistribute the albums after they take them down. The online store comments, recommendations, fans also bought are also gone from the system. These discovery engines are an important part for music discovery and purchases of online music stores. A metaphor is if you do not pay the post office an “annual tax”, they will come to the house and pick up the items after you already paid to distribute them. This is extortion because TUNECORE threatens to take down your music if you don’t pay their fees.

I communicated personally with one of the top head executives at TUNECORE about this. He argued that they have provided value added services for musicians such as Free iTunes reports, 25 Free TUNECORE Media Players, or Free Upgraded Sales Reports and that these cost them a lot to develop. I understand the business constraints. However, these features should be optional or premium paid services. They should not be labeled “Free” since customers are forced to pay an annual fee or lose their releases from the digital stores. These “Free” services are falsely advertised. There’s a lot of talk these days from companies touting how “transparent” they are. It’s so laughable that they can project these buzzwords without practicing it.

However you define success, it takes many years of hard work to achieve your goals. You want your strategy to be prepared for success not failure. Who is to say TUNECORE won’t charge $100, $200, or even $500 PER release because they set precedent they can change the Terms of Service whenever they want without a grandfathered clause?

This is why I decided to go back to CDBABY for iTunes and Amazon. They have never changed their prices since they started. I don’t mind paying a 9% cut for every music download purchase or listening stream because it helps the company to continue their operation, grow, innovate, so they can serve musicians. They also don’t take down your releases unless you ask them to.

Android Music MarketRecently, Google launched Google Music (comparable to iTunes) and the Android Music Market (comparable to iTunes Store). Google also allows artists to claim their profile brand name and upload their music directly to the store for fans to purchase for a one-time $25 sign up fee. Sales from each individual download or album is split 70 (artist share)/30 (Google Share). Some artists (including myself) had their sign up fee waved. Both CDBABY and TUNECORE will allow music distribution to Android. However, CDBABY would still take a 9% cut while TUNECORE would still require an annual fee (and if you don’t continue to pay TUNECORE they would take it down). I don’t understand how any artist would want to go through a distributor to send their music to Android Music Market. Google Android Music Market is the next evolution in empowering independent artists because there is no middle man between the artist and the store. You can set the price for each track or album and upload custom artwork.  You can also make edits to the album after it has been to the store. Something that iTunes or Amazon won’t allow. Furthermore, I was able to see sales transaction from my recent single “All Day” the next day. Other stores like iTunes report sales 6 weeks after the purchase and it can take some time before the distributor shows you the report or sends you the money. Having real time reporting helps you manage your marketing campaign more effectively.  Hopefully Apple and Amazon will follow and allow artists to upload their music directly to their stores as well.

1 Comments For This Post

  1. Leet Music Says:

    Depends on whether or not the back end royalties split or up-front pay ends up being a better deal. The more sales you have, the bigger hit you take on the back end.

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