Cd Baby Distribution

CD Baby is an online music store specializing in the sale of physical compact discs and digital music downloads from independent musicians directly to consumers. Additionally, the company has become a digital aggregator of independent music recordings, distributing content to several online digital music retailers.

It has also achieved recent value as one of the only sources of information on physical CD sales in the independent music industry, surprising analysts by reporting continued increases in independent CD sales all the way through its most recent report at the end of 1998, thus apparently showing that independent CD sales move separate from the major label sales reported in the press.

CD Baby was the d/b/a of Hit Media, Inc., a Nevada Corporation founded by Derek Sivers in 1997 and sold by him in 2008 for $22 million to Disc Makers. The firm currently operates out of Portland, Oregon. . CD Baby allows artists to set their price point for selling physical compact discs – CD Baby retains $4 of every sale, the remainder gets paid out to the artist on a weekly basis. They also charge a one-time $35 setup fee per CD. .

History

CD Baby began with its founder and president, Derek Sivers in Woodstock, New York. Sivers was a full-time musician who created the website to sell his own music. As a hobby, he also began to sell the CDs of local bands and friends. Because he was already making a living as a musician, he was able to be flexible with making CD Baby the "utopian" online store for independent musicians. To do this, Sivers followed four main principles based on his personal preferences:

• The musician will be paid every week
• The musician will get the full name and address of everyone who purchases their music (unless they opt out)
• The musician will never be removed from the system for not selling enough
• The site will never accept advertising or paid-placement

In addition, Sivers made sure to listen to every CD he sold (currently several people are employed to do this). The operation was run mainly in Sivers' bedroom.

Sivers eventually hired John Steup as his Vice President and first employee. In an interview, Sivers recalls saying to Steup: "This thing might get huge one day. I mean, we might have 100 artists here."

Steadily, CD Baby grew as more artists wanted to sell their music through the website. Sivers always dealt with the artists directly.

Beginning around 1999 Sivers oversaw expansions of his roster with such collaborations as the one with Oasis Disc Manufacturing President Micah Solomon, where Sivers partnered with Oasis Disc Manufacturing to distribute the complete Oasis artist roster at the CD Baby store (an arrangement still valid currently).

CD Baby was somewhat inspired by a website called Songs.com founded by Paul Schatzkin, Tom Kimmel, and Michael Camp. Songs.com, though not having the nonexclusive policy CD Baby does, was also a website that sold primarily independent music. However, ten months after Songs.com was sold to Gaylord Entertainment for $3-million, Gaylord folded all its digital initiatives, including Songs.com. Schatzkin would then send an email to members of Songs.com, recommending CD Baby. Schatzkin was also the instigator of CD Baby's toll-free phone line, "1-800-BUY-MY-CD."

Sivers never accepts money to advertise a CD more than any other CD and doesn't negotiate with investors or display advertisements. Currently, there are eighty or so employees of CD Baby whose work ranges from warehouse work to customer service to listening to CDs.

Although the majority of artists who use CD Baby are North American, about thirty percent of orders for CD Baby are overseas.

In 2003, Sivers won a World Technology Award for Entertainment.

In 2004, CD Baby began offering a digital distribution service. By opting in to their digital distribution service, artists can authorize CD Baby to act on their behalf to submit music for digital sale to online retailers such as Apple's iTunes, Emusic, Real Network's Rhapsody, Napster, Amazon MP3, MusicMatch, and MusicNet among others. Songs on CD Baby are now also available on Spotify.

In August 2008 it was announced that Disc Makers, a CD and DVD manufacturer, bought CD Baby (and Host Baby) for 22 million dollars following a 7-year partnership between the two companies, according to Sivers.

Technical history

Up until 2009, CD Baby ran on PHP and MySQL. It gained brief notoriety when Sivers announced publicly in early 2005 that he was rewriting all the systems in Ruby on Rails and PostgreSQL. After about 2 years of work, he felt that the rewrite was still less than half done, and he threw the new code away and rewrote it again in his original programming language, PHP, and database, MySQL. He said it took him only two months to finish. This was a widely-discussed move, because some saw it as a demonstration that Ruby on Rails was overhyped and not up to the task of solving large problems. Sivers himself summed it up by saying that "Rails was an amazing teacher" but that PHP was perfectly up to the task once he had learned the lessons Ruby and Rails taught him.

CD Baby has relaunched the website with major infrastructure changes (using ASPX) to support future growth. The website is no longer being run with the original or revised PHP of Sivers. The new site had experienced significant initial glitches but this has not prevented the company from continuing to pay its artists as sales are reported to CD Baby by digital partners and others, monies received and artist-chosen payment points reached. This has also temporarily slowed, but not stopped new releases while attention is focused on existing artists and customers.

CD Baby has also continued to invest heavily both in technology and people, doubling the support staff during the system transition and adding a support team with a significant presence on the Forum, while maintaining existing email and phone technical support.

CD Baby and musicians

Independent artists at CD Baby

With a catalogue of more than 250,000 albums and over two million digital song tracks, CD Baby is home to the largest online community of independent recording artists. Music created by these acts, ranging from part-time hobbyists, to full-time musicians with successful careers, spans all genres from avant-garde to world music. Notable artists releasing their music via CD Baby include American country acts Gretchen Peters and Tom Russell, Canadian singer-songwriter Allison Crowe, UK duo Nizlopi, and, Italian-born, American classical violinist Nadja Salerno-Sonnenberg, Music Director of the New Century Chamber Orchestra, and American rock and alternative band Beyond the Element. Grammy Award-winning artist Janis Ian, a pioneer among independent musicians marketing online, sells her CDs on the CD Baby site as well as through her own website.

Mainstream artists at CD Baby

In addition to the independent artists in the CD Baby catalog, many of whom are not well-known to mainstream audiences, there are also artists signed to a major record label at different points in their careers. These include 60's legend Marty Balin, 80's icon Tiffany, Europe's Lory Bianco, and newer American acts such as The Low Anthem, Regina Spektor and Jack Johnson (who sold his music at CD Baby prior to signing with a mainstream major label). The catalog also includes an album with early demo songs by Madonna being sold by her former producer Stephen Bray. Gary Jules first released his debut album containing the hit song Mad World on CD Baby. American Idol winner Jordin Sparks' EP For Now was sold via CD Baby as was Soulja Boy's album Unsigned & Still Major .

Statistics

CD Baby statistics as of July 7, 2008:

• 248,138 artists sell their music at CD Baby
• 4,686,670 CDs sold online to customers
• $85,042,653 paid directly to the artists

In the news

• "CD Baby Finds Success in Online Music Niche", NPR's by Marcie Sillman Morning Edition , December 28, 2004
• "CD Baby's Unlikely Alliance with Best Buy" by Annie Baxter, NPR's Morning Edition , February 2, 2006
• "Baby Love" by Matt Welch, LA Weekly , June 9, 2005
• "Derek Sivers of CD Baby", Venture Voice , Show # 19
• "It's the future, baby: How CD Baby helps indie musicians with digital distribution" by Kristin Thomson, Future of Music Coalition , October 8, 2003
• The Future of the Music Business: How to Succeed with the New Digital Technologies , by Steve Gordon, Backbeat Books, 2005, ISBN 0-87930844-3, p. 213-225 ("An Interview with Derek Sivers, Founder and President of CD Baby")

References

1. ^ CD Baby sold to Disc Makers
2. ^ ^{a b} "CD Baby: about", September 16, 2008
3. ^ "CD Baby rewrite in Postgres and Ruby, Baby!", January 22, 2005
4. ^ "Migrating to Ruby on Rails and PostgreSQL: An Interview with CD Baby", November 2, 2005
5. ^ "7 reasons I switched back to PHP after 2 years on Rails", September 22, 2007
6. ^ "Wednesday Updates (customer browsing, digital payments, uploader, and more)", July 30, 2009
7. ^ "Friday Update (iTunes Australia, uploader, accounting, etc.)", July 30, 2009

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