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menbah on Back from Canadian Music Week
March 7, 2006 at 1:28 pm

You Canadians have really short “weeks.” (: Anyhoo, way to represent–although I didn’t see from this writeup whether or not you wound up saying “whore yourself out.”

JY on Back from Canadian Music Week
March 7, 2006 at 3:46 pm

As for competing with the major labels….I’m not sure very much has changed. It still seems that most unsigned artists aren’t selling enough tracks to do music full-time. Maybe this is always going to be the case?

Then again, I’ve heard that most SIGNED bands aren’t keeping their heads above water either. The “making a living as musicians” rate for newly signed bands is probably less than 1% of the artists. For unsigned bands, I suspect that the odds are probably much worse (if the goal is to do music full-time). At least you can keep your expenses down by being unsigned.

Jeff Price on Back from Canadian Music Week
March 9, 2006 at 3:49 am

Hi

First, as Brad did mention on the pane, we were apparently intimate. As I think both Brad and I can attest, its best to try not to remember

Next, please feel free to email me directly with any and all questions about TuneCore at jeff@tunecore.com

Also, re: CD Baby, as I understand it this is the CD Baby model for digital distribution. Please correct me if I am wrong as I do not want to send out and spread incorrect informaiton. This is what I got from their website.

– CD Baby charges you $35 as a membership fee

– CD Baby charges $20 to provide a unique identifier number to each release ( a barcode)

– CD baby requires its customers to mail them a CD to get into the services. TuneCore does not – but we request it. As of two days ago, TuneCore no longer needs anyone to mail anything as we have a way to now accept lossless files via the Net.

So, you need to add to the CD Baby equation:
– cost of mailing the CD ( Average costs – US post, $1.29, Fed Ex $18, UPS $4)
– cost of the envelope – #0 padded Jiffy $0.28
– cost of the CD ( a burn $0.30, the jewel box $0.25 or a finished product CD let’s say $1.25 per unit)

the total up front costs for someone with no bar code with CD baby who just wants digital distribution now jumps to $35+$20+$1.29+$0.28+$1.00 = $57.57

Also, CD Baby is taking 9% of the money generated from the sale of your music with not limit to how much it takes.

If you believe in your band, and you believe your music will sell, you will be paying them a limitless amount of money. That is, each time your music sells, they just keep taking 9% of the money with NO limit. You do most of the work to cause the sales and they sit back and take the dough.

What if over the next 12 months you sell an average of 4 copies of your album and 25 individual songs each month in ONLY the iTunes US store- not an outrageous number of sales at all.

The total someone taking 9% of the revenue from ONLY iTunes US is $49.14 and you still have to be exclusive with CD Baby

Now add that $49.14 on TOP of $35+$20+$1.29+$0.28+$1.00 = $57.57

A total close to $110

Now what happens if things pick up more, let’s say you sell 100 albums on-line over the 12 months in ONLY iTunes US. That’s $63 being paid to someone taking 9% of the revenue ( plus $35+$20+$1.29+$0.28+$1.00 = $57.57)

And this is ONLY the money from iTunes US. Now add in the money you will need to pay them for all the other digital sales and stores.

You could pull your music down from CD Baby and put it up via TuneCore for a hell of a lot less, go non-exclusive, no contract and make yourself more money. Not to mention to get your money, you just log in and take it. There is NO minimum required to get your payout. You can take it whenever you want no matter how little it is.

For the moment, I am assuming CD Baby got its “Membership” fee of $35 from anyone using it ( which is VERY high as far as I am concerned). Taking back your digital rights in no way will impact your physical.

bottom line is this – The goal of TuneCore is to allow anyone to get their music into iTunes, Rhapsody, Napster, Walmart, Yahoo!, MTV, Virgin Digital, HMV, Trans World Entertainment, MusicGremlin, iMesh, Cdigix and Synacor (Adelphia, Charter, RCN), eMusic and more without having to give up any rights and get 100% of the money from the sale of their music. It sounds like a simple idea, but honestly it has never been done before.

To this point in time, the only way to get into iTunes etc., is to be signed to a record label or go through an “aggregator” – an aggregator is a middleman between unsigned artists and places like iTunes. Aggregators are not labels. With both aggregators and labels, to get your music into places like iTunes artists must give up some of their rights and between 9% – 50% of the money generated from the sale of their music.

TuneCore will get ANY band or artist’s music into all of the on-line digital stores. The artist’s Album, EP or single will appear in iTunes etc., along with their album art, band name, album title and liner notes. Anyone can buy their music, see the album art, listen to 30 second samples just like any other release on any of the services.

Once someone buys a song or album the artist is paid 100% of the money that iTunes and the other digital services pay for the sale of their song(s) and/or album(s). The amount iTunes etc., pays is the exact same amount of money any other indie artist/record label gets paid.

Actually, that’s not totally accurate. The artist actually gets paid more. Any other artist in iTunes has to give up between 9% – 50% of the money earned from the sale of their music to their record label or aggregator that got them into the store. TuneCore takes none of it.

In addition, labels and aggregators take their 9% – 50% cut during a term of exclusivity that usually lasts from three to five years.

This is ridiculous as aggregators did NOTHING to cause these sales. It’s like going into Fed Ex to send your album to iTunes and Fed Ex says the cost for delivering the package will be 9% – 50% of the money generated from the sale of your music for the next three years.

Labels and aggregators pay out their money in “royalty periods”. For example, they pay artists every three months and send their money only after they have taken their 9% – 50% cut.

With TuneCore, artists get their money whenever they want – they just log into their TuneCore account and transfer it out via direct deposit, PayPal or we they are mailed a check.

I tried to keep the costs for TuneCore cheap. I honestly wanted all artists to be able to afford it.

TuneCore charges:
$0.99 per song on each Album, EP, or Single – this cost includes getting your music in the iTunes US store.

For other optional stores and services – Rhapsody, Napster, iTunes UK, etc.:
$0.99 each per Album, EP or single

There is also an annual Maintenance & Storage Fee
$7.98 per Album, EP or Single

There are also package deals that lower the per store cost from $0.99, artist are credited $10 after every seventh album, ep or single is delivered via TuneCore. Their is also special volume pricing done on a case by case basis

In addition to the digital distribution, TuneCore also offers physical distribution – again without taking any rights, exclusivity etc.

Through its relationship with Tectonic Sound, artist can have their title listed in a national record distributor catalog. The distributor sells to everyone from Walmart to the smallest Mom & Pop

Once an order is placed by a retailer, we manufacture the quantity ordered on demand and ship out the order – we can make as few as one copy. The finished CD looks exactly like a regular full art CD you would find in any record store. In effect, the artist has virtual unlimited physical inventory. There is no up front cost to artist. When an order is placed, the cost of manufacturing is deducted and the artist receives the money from the sale

Some more info on TuneCore can be found:

FAQ
http://www.tunecore.com/index/faq

About The Founders
http://www.tunecore.com/index/bios

Boston Globe
http://www.boston.com/news/globe/living/articles/2006/03/01/for_musicians_an_online_alternative/

ABC World News Piece on Tune Core
http://abcnews.go.com/Video/playerIndex?id=1533847

Spin.com piece on TuneCore
http://www.spin.com/features/news/2006/01/060119_tunecore/

London Daily Mirror piece on TuneCore
http://www.mirror.co.uk/webandgadgets/iblog/tm_objectid=16631728%26method=full%26siteid=94762-name_page.html

THE ORLANDO WEEKLY
http://www.orlandoweekly.com/default.asp

COLUMBIA FREE TIMES (alt weekly South Carolina)
http://www.altweeklies.com/gyrobase/AltWeeklies/Story?oid=oid%3A156035

Again, please let me know if I can answer any more questions

Thanks
Jeff
TuneCore

fluffy on Back from Canadian Music Week
March 15, 2006 at 12:32 pm

Jeff’s CDBaby analysis ignores the fact that CDBaby is primarily a physical retailer, and the $35 is not a “membership fee” but a one-time charge for inserting the CD into the catalog and allocating warehouse space for it. As opposed to TuneCore’s recurring membership fees which can get pretty big.

I did a different analysis of TuneCore when it first launched, posted here: http://beesbuzz.biz/music/tutorials/paid_digital_distribution.php

Of course, you can draw your own conclusions. I just thought I’d try to represent CDBaby better, as I’m a more-or-less disinterested third party.

Also CDBaby has recently launched into partnerships with even more distribution networks, including ones which sell songs as ringtones.

Peter Wells on Back from Canadian Music Week
March 16, 2006 at 5:13 am

Hi fluffy and everyone,

Jeff is over at South By Southwest, but I wanted to jump in anyway, I hope you don’t mind.

I’m particularly glad fluffy responded. I tried to reach you, fluffy, weeks before when I first read your analysis of the various services, especially TuneCore vs. CD Baby. I hope you’ll have time to respond here.

Jeff’s long post here goes far more deeply into the numbers than I will, so I won’t retread any of that ground. I did want to ask about your assertion that TuneCore’s recurring charges can “get pretty big.” I hope there isn’t a miscommunication? We only charge $7.98 an album each year. It would take four and a half years for that to equal the $35 CD Baby requires (they call it “membership” for some reason) for ingestion of any album, even if that were their only charge. That doesn’t strike me as *too* big, but I could be wrong. Just wanted to make sure you and your readers knew all other TuneCore fees are one-time.

It’s also true that many folks have their own UPC code, but I’m glad we created a system that gives people the option for UPCs at no charge. Coming very soon: people will be able to enter their own UPC codes if they have them!

But I’m not really about the numbers as much as Jeff is. For me, the most attractive part of TuneCore, and the reason I chose to become the COO, was the attitude. There is an ethos to TuneCore that I’ve never seen in this industry before. TuneCore offers a service, and that’s what it is: a service, like FedEx. We deliver your music to iTunes and the other retailers and we get out of your way. We wouldn’t even have an annual charge if it didn’t require a lot of work to maintain the connection back from iTunes and other stores, to manage our clients’ accounts, get them their earnings and also keep good clean copies of their music for re-delivery or new delivery to new stores/services.

Since these are fixed costs, we only ask for $7.98 a year, fixed. Our delivery is fixed cost as well, so we don’t ask for a percentage. The attitude at TuneCore is, “Provide the service, ask a fair price, get out of the artist’s way.”

Can you imagine if the rest of this industry operated that way? Musicians would have a chance to let their work rise or fall by merit. A band’s expenses could be comprehended, rather than growing with their success. Money would be available to let the artist do the hard work of promoting themselves, which is as it should be.

The “service” ethos here spills over into our whole approach to customers. We just added MusicNet and Napster services, but for all existing customers of TuneCore we offered these stores for free. Just…free, if they wanted them. We could have asked for $0.99 for each, that’s our model with new customers, but we wanted to 1) reward early adopters, and 2) We already asked these folks to engage our service, there’s no need to squeeze every last drop out of them. I think that’s unusual in the music business.

In the end, I’m not that concerned or interested in CD Baby or other competition. We’re going to succeed or not on our own ability, by offering a fair, competitive price, providing services, a good deal, meeting the needs of our clients–all the things that make any company fly. I’ve worked very hard to keep the operations of TuneCore as lean and well-designed as possible, so we could offer far lower prices: Jeff’s numbers above prove that, I think. But underselling and over-delivering will matter only if we’re in sync with the 21st century, the Internet and the changing needs of our clients.

As of today, every service available to customers of CD Baby are available to customers of TuneCore. We have physical manufacturing, we have virtual storage and warehousing, on-demand replication and distribution, as well as lots of resources to help an artist market and promote themselves. We also are adding every day more and more stores/servcies, like the upcoming eMusic option. I hope as we continue to grow, as we match and (I hope) surpass the offerings and services of our competitors, while we lower costs and keep prices down, it will nevertheless be our ATTITUDE that separates us from the rest.

We offer a service, present free or inexpensive tools, then get out of the way. It was refreshing enough an idea to make me devote my life to TuneCore. I hope, fluffy and everyone, as you continue and even revisit your analysis, that difference will come through.

Thanks.

–Peter

Peter Wells
Chief Operating Officer
TuneCore.com
peter@tunecore.com

Peter Wells on Back from Canadian Music Week
March 20, 2006 at 5:19 am

Hey fluffy,

Yes, I did have trouble getting an account and posting on your site. I thought maybe I needed permissions or something. I guess it was just a technical glitch. Let me know if you find a way to straighten it out?

Because you asked, you get a scoop: we’re shortly going to introduce package pricing for our stores. You’re absolutely right–if we kept adding stores at $0.99 each it would start getting expensive. We won’t let that happen. We’re working out the parameters now, since a couple more stores are coming (there’s another scoop!).

I also agree with your analysis, that CD retailing is still vital for just about anyone. That’s why we added the CD replication and distribution aspect. Right now, it’s for volume, but we’ll be refining it and taking it to levels that fit almost every demand.

It’s our hope that our pricing and our services ultimately drive the entire space to be more artist-friendly. I’ve heard that now CD Baby offers their service non-exclusively, after years of exclusivity. It may just be self-flattery, but I like to think we’ve already helped them to see there are better ways to approach their clients. In the end, though, our costs are lower, so we hope to win that way, as well as with kick-butt customer service and just-in-time delivery and on-demand manufacture without the need for warehousing.

I think you’re right, this part of the industry is in flux, and comparisons will always fall behind the curve. It really gives me heart that people are looking at the solutions around, and that we are an attractive option. We will work hard to become the obvious choice.

Thanks, fluffy and all. You can see we’re paying attention. PLEASE give us suggestions of how we can improve our site, our business model and more. If Brad Sucks isn’t the proper place for that, write me or visit our new blog:

http://blog.tunecore.com

Thanks.

–Peter

Peter Wells
peter@tunecore.com