Originally published November 2008.
The news surrounding the music industry these days might make you wonder if anyone is buying CDs any more. Major-label CD sales are down again. Downloads are up. So the question on the table is: As an independent artist, do you really need to make CDs these days?
There are many factors to consider, and what is true for major-label artists does not often translate to independents. As a matter of fact, amidst the last few years of continuously declining major-label CD sales, Disc Makers has seen continued growth in new CD jobs ordered, and indie-only CD Baby has seen consistent increases in CD sales. It speaks to the fact that one revenue model does not fit all markets, and the ingredients for success for a major-label artist vs. an independent are simply not the same.
I know what many of you are thinking. “Of course Disc Makers is going to tell me I need to keep making CDs!” Yes, we are a CD manufacturing company, and that gives us a particular stake in the subject. It also gives us a unique perspective, and a front-line view of what the demands of the market and our client base are. In addition to that, we’ve leveraged some of our great connections within the music industry and reached out to gain insight and commentary on the question of the viability of the CD format. Here are a few things to consider.
1. CDs legitimize you.
Imagine you need the services of an attorney, and you meet someone who claims to be one. You ask for his card, and he tells you, “Oh, I never got around to printing business cards. Got a pen? Got a napkin?” Could you take this person seriously? Just as a business card is the most basic element to legitimize a business person, a CD is the most basic way to legitimize you as an artist.
What major music artist doesn’t have a CD? Physical product, and in this case CDs, demonstrate that you as an artist are committed to your career. Giving a music business professional a CD is the fastest way to get them to listen to you and take you seriously. Don’t make them work to hear your music!
2. CDs are an integral part of the indie revenue stream.
Getting paid good money by a club or promoter to play a show is a difficult prospect. So if you’re on the road, even for a weekend jaunt, you need to have something tangible to sell to help increase your take at a gig.
Download cards can and should be sold, but your new fan can’t go out to their car and stick a download card in their player to give it a listen in between sets. Having other things to sell – merch, posters, and stickers – is helpful too, but your CD is the main course on that meal ticket.
• 70% of overall music industry revenues come from CD sales. You don’t want to cut off that much revenue potential.
• You make more money selling CDs at gigs than selling downloads on somewhere like iTunes. A CD costs you between $.90 and $1.50 to manufacture. Sold at $15, that’s over $13 per unit. iTunes takes $2.99 per album, which leaves you with $7 per sale (assuming you are able to move any product via iTunes and don’t have to pay out any more of your money to a third vendor).
• Major-label CD and DVD sales in 2007 added up to $15.7 billion. That’s an encouraging number, even if it is in decline. Download sales were at $2.9 billion. Download sales are increasing for sure, but they still pale in comparison overall.
• CD Baby has seen an increase of 6% in sales since last year. Since 1997, CD Baby has sold over 5 million CDs. That’s easily over 400,000 per year on average, and growing. People are still buying independent releases.
Any independent artist who tours knows that the majority of CDs they sell are sold from the stage. Think of it as a fan building and fan nurturing tool. It’s one of those moments where a fan, or soon-to-be-a-fan, craves immediate gratification and a remembrance of the event. CDs are the best format for live sales. It’s an instant data transfer – you just hand over the disc. And even more than this being an “impulse” buy, it’s truly a matter of you creating a demand and being there to supply the goods immediately.
As a matter of fact, you should consider the act of pitching your merch and CDs from the stage or your merch table as an invitation for your audience and fans to have a direct and personal interaction with you. There is an art to the pitch, and those who take the time to create an interesting approach sell more CDs and gather more mailing list names for future promotions. If your invitation to meet you at the merchandise table includes a drawing for a free CD, then your CD sales could go up 25%-50% and you’ll collect nearly 100% of your audience’s contact information. That’s easy, low cost marketing that will pay off for years to come. Want to really personalize the experience? You can sign a CD. Try that with a download.
3. No connectivity required.
In many ways, CDs are easier than downloads. Take them home, pop ‘em in your car’s CD player, a boom box at a party… CD players are everywhere. There’s no web connectivity necessary, no searching around a website – just plug and play. Plus, you can add bonus material, videos, and enhancements to make your CD an all-inclusive multimedia experience.
If one thing is clear, the landscape in the music industry is changing. This is nothing new. We’ve been in business since 1946, and we’ve seen plenty of formats rise and fall. Digital downloads and transfers are clearly a model that you ought to pursue to their fullest extent, for both revenue and promotion, but CDs still represent the huge majority of revenue in the music industry. The fact is, some customers just don’t do downloads. You’ll lose a sale if you don’t have a CD for them. Even your grandmother knows how to use a CD.
4. Permanence (no crashing computers and lost data).
Your music is virtually permanent on a CD. Hard drives crash and MP3 players die, it’s a sad fact of life. But if you have a disc with the content on it, your message or album is not lost. And of course, if you own a CD, you can easily rip MP3s for storage or use with your favorite media player and still have the disc as a backup and for use with your stereo, car, etc.
5. A CD tells a story.
The artwork that comprises your CD package allows you to further illustrate your album’s artistic statement. A great looking CD and your specific choice of packaging say something about you and can help you further connect with your listening audience. Plus, listeners experience the track sequence, pacing, and breadth of your work exactly as you intended. Singles certainly have their place and can spark interest in your act, but albums are the only way for you to create a thematic and sonic statement of where you as an artist are at the time the disc is recorded and released.
Someone browsing through iTunes may skim right over your band’s name or song titles. But that same person, given the opportunity, might pick up your CD package based on the appeal of the artwork alone. CDs are a one-stop, self-contained collection that deliver music, graphics, artwork, lyrics, photos, and credits — all in a neat, compact package.
Not to mention the fact that after spending months (or years) composing, refining, rehearsing, recording, mixing, and mastering, there’s a real sense of accomplishment in having something to physically embody the sweat, money, and tears that went into the work you’ve created. Digital files are a great way to deliver tunes, but nothing beats having a CD to represent the completion of your artistic efforts.
6. Shopping your music? CDs are the way to go.
CDs remain the preferred format if you’re shopping your music for film, TV, multimedia, gaming, or licensing opportunities. An overwhelming number of music editors and journalists still prefer a physical CD and press kit when being pitched an emerging or even an established artist. Radio stations still utilize CDs in their selection of music for airplay. If you choose not to press CDs, your chances for success and exposure on the radio are virtually non-existent.
And while many artists now feel no need to court major labels to achieve success, if you do want a label’s attention, CD sales are the most important metric they’ll consider. If you prove you can move product, you’ve got a chance at impressing a label.
7. CDs sound better than MP3s.
CDs sound better than an MP3 download, because they’re not compressed like an MP3 file.
8. It makes a swell gift, too.
Want to reward members of your fan club and street team? There’s no better way than giving them a limited-edition CD with music recorded and packaged especially for them.
9. What’s true for majors isn’t true for indies.
The majors are selling fewer CDs, it’s true. Retail music CD sales are down anywhere from 9-14%. But you are not a major-label artist (at least not yet). Remember that the model for each is significantly different.
To really sell downloads in significant quantities, you need people actively seeking your music to buy. This requires a large and established fan base, and/or a popular hit single, and/or a tremendous amount of money spent on promotion, and/or a significant buzz on the web. As an indie artist, you may not have any of these things yet, you’re still building your name and awareness about yourself and your music. Chances are you’re giving away songs through digital distribution to promote yourself.
As an indie, you rely on hand-to-hand music sales, personal contact at gigs, something tangible you can hand to someone as soon as you’ve sparked an interest in your act. Nothing does that better than a CD.
Special thanks to Gene Foley, David Hooper, Martin Folkman, Jeri Goldberg, and everyone who contributed ideas.
Andre Calilhanna is an indie musician with 13 years’ marketing experience at Disc Makers.