It took a musician to tackle the issue of selling independent music online – direct to the consumer. CD Baby founder Derek Sivers did this by creating a website to sell his own music in 1998 and saw the potential of doing so for others. Most everything about digital commerce was a scary proposition back then. Once a member, you shipped five CDs and waited until they were sold and then reordered. A check would arrive in the mail, along with your cut. Keep in mind, folks were petrified of online banking.
From day one my experiences with CD Baby were always straight forward, clean of mistrust and never once did I have to chase after a payment. To this day, musicians applaud the upgrades, stability, and easy access.
I caught up with VP of marketing Kevin Breuner at Canadian Music Week and asked him about the current business model and what to expect in the future.
What brings you to Toronto?
Canada has been our second largest market for many years and we’ve been doing things like expanding our publishing and administration services, which have been available in Canada quite a while. We are starting to take more care of other markets outside the U.S. This is my first time at Canadian Music Week, even though we’ve had others attend in the past. We are trying to get better connected with the music scene in Canada – stronger relationships and continuing to grow our presence in this market.
You must be under pressure from publishers and rights collectors to properly account for every recording that finds its way through CD Baby and the many streaming platforms you access?
Fortunately for us, we were going way beyond the norm collecting data from artists; even back when I started working there in 2006. At one point, we even debated stopping that practice because it wasn’t being used by anybody at that time and was causing a lot of extra headaches in the sign-up process. I’m glad we kept it. With digital service providers like iTunes and Spotify, and because they got pressured to better account for publishing royalties and songwriter credits – increasing the requirements in those areas; we were prepared for them.
As the world was becoming digital, all of these publishing royalties due independent artists weren’t being collected or accounted for. The publishing world was still old school in their thinking. We know who the big players are and they get paid, then they kind of swept the rest under the rug. There’s no reason there shouldn’t be a one for one deal. Same should be true with publishing and songwriter royalties. That’s what that service is about. Going around the world and collecting that information – making sure the data is out there – songs properly registered around the world, so we can collect that money.
I guess one of the gratifying CD Baby practices all musicians appreciate is the monthly payments. Historically, other than the superstars, getting paid was one sad tale. Volumes have been written about music industry rip-offs.
We actually pay weekly, if you are generating that kind of revenue. We have big artists who do really well and payments are consistent and they can count on them.
Does this break down by genre?
I wouldn’t say so. I see everything. Musicians playing instruments I never knew existed are making lots of money because they could connect with a certain audience. The one thing all those who are selling well have in common is, they have connected with an audience or tapped into a market that hadn’t been reached. They are good at cultivating fans. They also write great music.
We see a lot of singer/songwriters do extremely well. That’s really based on outside circumstances. There was a period we had these singer/songwriters getting massive placement in film and television because that was popular at the time. It’s that kind of situation that will drive a genre or groups. It’s more cyclical. It’s about being able to capitalize on the opportunities when they happen and owning that relationship with fans. Keep cultivating, so they can take it to the next level and keep engaged so they keep coming back.
What have you added to CD Baby that gives an artist a better understanding of how their music is being received and what can be done to improve outreach?
Two things very recently. We added these trending and analytic reports which are amazing. They become addictive because you start looking at them every day. We have these great trending reports for Apple Music, iTunes, and Spotify and you can look day by day and see where your streams are happening, down to obscure cities anywhere in the world. You can get into a Spotify artist and get stats – you can get the top fifties cities, but with ours, you can zoom in the map and see, for example, who in the Toronto area is streaming. Could be fifty miles outside the city in some little town and someone is streaming you like crazy - why not play a show there? It also gives demographic information.
A lot of artists go about trying to communicate with their fans in the wrong way. For example, a lot times an artist will try to imitate what the pop icons are doing. Pop icons are in a different class of their own and part of a marketing machine geared at youth. That may not be your audience. You may be wondering why that girls’ shirt you have at your merch table geared towards teenage girls isn’t selling. That’s because your audience is fifty-year-old men. There’s data that covers that, that will help you make better decisions. The coolest thing about Spotify, it shows who is streaming your music on the playlist. That’s incredibly helpful – there’s no other way to find that information.
We had kind of a hidden success for my band last year. We released a Christmas album a few years ago and this year somebody had put our album in their playlist. He was just a random guy and a Spotify user. In think he just kind of lucked into twelve thousand followers to his playlist, using some very generic key words that just happened to work. We got 80,000 plays just off that playlist. We would have never known had we not had these trending notes. It helped us to move and figure how to build on that and drive more traffic now – not wait. It made us more proactive. For us, it also happened with Pandora. A lot of these platforms are driving their own eco-system and doing things in different ways.
With Pandora, we had a cover song that was off that same Christmas album. For whatever reason, between November and Christmas, it got a half million plays and we would have never known if we hadn’t looked at the data. We could watch all of this go down in real time. We sold a lot of albums and streams.
How many platforms does CD Baby reach?
We are distributing to a hundred outlets.
Do you pay more to reach more outlets?
The only thing the higher distribution fee adds is publishing administration. It includes all of the stores.
What are some of the new extras?
We just acquired this new marketing platform called, Show.co, it’s an amazing platform. Someone came to us with this and said they were transitioning their business and would you guys be interested in this platform? It was a platform pretty much all the major labels had been using. The client list using this platform every day is impressive – Universal, The Orchard, Nettwerk Music, Sony – they are all in there every day in their accounts launching these campaigns. Absolutely, we said, we want this.
We got it and are making it free to all CD Baby artists. It features campaign pages that are designed to get a specific action from your fans. The major labels have been using it for contests, email exchange and for downloads. You can do different things with it like featuring a new official music video. It cuts all of the garbage out that YouTube puts on it. It shows the video and tries to get everybody to subscribe to your channel.
The one page the major labels have been using that is really cool is called Social Unlock. Basically, if you follow someone on Spotify, it unlocks content or gets you into a contest and when your fans follow you on Spotify, you also get their email address. It helps you build a list. The people who manage the Oasis catalogue use this constantly to do contests because the band doesn’t play or do anything together anymore because they can’t stand to be together.
They have millions and millions of plays on Spotify and are using this tool to capitalize. Britney Spears, Maroon Five have used it. We are just rolling out to artists and it’s available now, for free. The link will be on artist dashboards in just days. Instead of going out there and saying “buy my music, buy my music” and irritating fans – here’s a tool that will help you get creative and get things done and improve your efforts, whether building subscribers, getting plays, getting followers, building email lists – you are unlocking more opportunities.