Digital Music Distributors Compared

We’re aware of the fact that we’re a small company compared to some of our competitors, but our cost to bands is also smaller than most of them. All of our major competitors make a charge for either uploading or hosting your tracks, subscription fees, renewal fees, charges for ISRC codes, different charges based on how many outlets you want your music to appear in, the ways they find of hiding new charges are as innovative as they are various.

We don’t charge you anything until you start making money. Uploading is free, hosting is free, picking different stores is free, in fact everything is free until you sell your first track, at which point we’ll take 10% of the revenue that comes back. You get to keep 90% of everything we make by working together. Ours isn’t the lowest percentage rate in the market: CDbaby offer 91% to their clients, but their upfront charges mean that not only do you have to get your credit card out of your wallet and pay them before you can hope to see any return from selling your music, but you’re also worse off with them than us until you sell more than ten thousand units. The same is true of Tunecore and Musicadium, and the Orchard never get close, as they take 30% of sales revenue for themselves AND charge you $90 up front.

Here’s a little table showing what you’d pay up front to distribute 2 albums over two years through some of the big distro sites (Musicadium deal in AUD, which I’ve converted at today’s rate of 1.549 to the USD).

Music Distribution Companies Compared

And here’s another detailing the income you’d get from various levels of sales, again based on distributing 2 albums over 2 years to all the stores RouteNote deals with, with an average per track income of $0.65, which is what you get back from iTunes.

RouteNote is awesome

As you get up to the 5k mark, Tunecore begin to pull ahead, it’s all pretty even around 10,000 and there are undeniable differences in the revenue earned when you get up towards to 30k sales mark, but we’re cheaper all the way up there, and the money will only ever flow one way – to you – if you deal with us.

So why are we better than our competitors? For artists starting out on their own, who want to be in control of their own destinies until they can prove the worth of their music, who don’t want to spend up-front money, and who aren’t realistically looking for sales of thirty thousand records in the first year or two, we are cheaper, quicker and much more interested in the success of our artists, because we’re smaller and our own success is that much more closely linked to that of our musical partners (read some of our testimonials!).

We had a response from Musicadium about this post – querying the way we’d worked out the fees mentioned. Here’s how it works out, based on the figures here in their agreement:

2 x upload fee to more than 3 stores = 2 x $99 = $198

2 x barcode (UPC) generation = 2 x $39 = $78

2 x annual renewal fee = 2 x $20 = $40

198 + 78 + 40 = 316

$316AUD / 1.549 = $204.00USD

Although the exchange rate has probably changed by now…

Pirate Bay Claims 80% Of All Their Torrent Traffic Is Legal

During the ongoing trial in Sweden of Pirate Bay, spokesperson Peter Sunde Kolmisoppi claimed that an internal study of 1000 torrents had show that 80% of trackers pointed to material that was legal to share online.

An essential part of Pirate Bay’s defense has been that the service is simply a tool that has many legitimate uses. The trial is entering it’s 6th day.

Digital Noise (CNet Music Site) Promotes our Services

digital-noise-cnet-music-blog

Here at RouteNote we were lucky enough to get some great press over the weekend from Digital Noise. Digital Noise is a digital music news site from CNet (owners of Download.com, TV.com and more).

CD Baby and Tunecore already offer digital distribution through iTunes and other stores, but both of them charge you money whether you make a sale or not. In contrast, U.K.-based RouteNote charges you nothing until you make a sale, at which point they take a 10 percent cut of whatever the store pays out.

Specifics: CDBaby charges you a one-time set-up fee of $35 (which covers setting up a store for physical CDs as well), then takes 9 percent of digital download revenues. TuneCore, which does digital distribution only (no CDs) charges you $20 a year for each album they stock, but takes no cut. So on a straight numbers basis, RouteNote’s a better deal than CD Baby for digital-only distribution, and a better deal than TuneCore if you expect to sell low volumes of downloads. Of course, there are a lot of other factors to consider, like customer service and speed of submission to iTunes and the other stores, but RouteNote looks like it’s worth checking out.

You can check out the full article here.

Songsmith. Rubbish.

roland02Everyone seems to be deriding Microsoft’s new Songsmith program, and with very good reason.  Mr. Gates’ employees seem to have decided it would be a good idea to take the software from a circa 1985 toy keyboard and box it up for $30.  We’ve got a Rhythm Ace attached to a Hammond organ downstairs that was designed in about 1960 and does a more convincing job.

You have a battery of switches to adjust tempo, mood, instruments etc. which the program uses to create music that is as bland as it is unoriginal. It’s as though someone at Redmond distilled Mike Flowers Pops to remove all the personality, and then digitised it. There’s a huge swathe of ‘remix’ videos up on YouTube, but my personal favourite is the Weezer – Buddy Holly remix. It’s the only one that I could actually listen to all the way through.

For sheer comedy value, none of the remixed songs beats the advert that supports the program. It’s literally incredible. This has been produced by a company with revenues of $60 BILLION dollars! How can they possibly think it’s ok to release utter guff like this? How did they spend the marketing budget, farming gold on WOW or something?

“I don’t want to write another boring love song”, yes… It’s much easier to have a robot do it for you. I get the feeling that having failed to make anything happen with their Pandora project, they’re looking around for other quick ways to offset all the money they spent on researching it. Thanks guys, good customer service – I wonder if there are any jobs going at Google? You remember, those guys who took your office software, improved it and made it free?

Digital Music Stores Compared

A lot of people get in touch with us to ask how many digital stores we distribute music to, and what proportion of the digital music market they represent. We also hear comments on the relatively small number of people we deal with in comparison to the huge lists of partners at some of our competitors, e.g. CDbaby, Emubands, IODA…(without mentioning the duplication in the last two).

The simple truth is that while a long list of digital music stores might look good, beyond the top 3 or 4 retailers it makes very little difference to overall sales how many your music’s in. It’s fairly common knowledge that iTunes is the biggest player in the market, but the scale of their dominance is pretty staggering. Neilsen (the ratings and market reporting firm) reports total US music sales of 1,513 million units in 2008, with 1070 million of those sales being digital downloads. That’s a billion digital music downloads across the entire US.

In 2008, across all territories, iTunes sold more than Two Billion tracks.

Apple iTunes Store Music Sales
Date Tracks Sold (Millions)
01/08/2004 100
16/12/2004 200
02/03/2005 300
10/05/2005 400
18/07/2005 500
10/01/2006 850
23/02/2006 1,000
12/09/2006 1,500
10/01/2007 2,000
09/04/2007 2,500
31/07/2007 3,000
15/01/2008 4,000
19/06/2008 5,000
06/01/2009 6,000

Excuse the horrid old excel graph, I’m still running Office ’03…

itunes-sales-graph1

It’s difficult to get a believable estimate for the size of the global digital music market, but given that the USA is the biggest single economy by a long way (the whole of the EU only just beats it in the CIA factbook at $14.98 trillion to $14.58 trillion), you begin to get a picture of how much of a monopoly iTunes has. Their competitors are of a different order: Amazon weighed in at 27 million digital tracks sold in the first six months of 2008, and the CEO of eMusic (David Pakman) estimated that Amazon have got about 4%-5% of the US music market, which going from Neilsen’s estimates puts them at about 48,150,000 tracks annually. Pakman also claims an approx. 10%-15% market share for eMusic, with 7 million downloads sold monthly (7*12 = 84).

By browsing eMusic’s sales milestone press releases, you can plot a rough course for their sales:

eMusic Digital Music Sales
Date Tracks Sold (Millions)
01/09/2004 0
01/12/2004 3
01/12/2006 100
25/09/2007 160
14/04/2008 200
20/11/2008 250

I’ll spare you another ugly graph. eMusic has sold 250 million tracks since it’s relaunch in 2004, and Amazon’s only been going for about a year now, 300 million tracks let’s say, which pales beside iTunes’ 6 billion total sales.

One can argue with the estimates, but the main thrust of my argument is hopefully becoming clear. A conservative 15% market share between Amazon and eMusic, along with iTunes’ >80% doesn’t leave more than 5% for any other players in the USA: with just those three selling your music for you online, you’ve got 95% of the market covered. It’s not that the remaining 5% isn’t worth catering to, but the law of diminishing returns kicks in, and customers in the last few percentiles get harder and harder to chase down, especially given the plethora of blossoming and failing little music shops that appear and dissappear. We concentrate our efforts on the vendors that matter.

P.S.

The controversial bulk of music discovery and consumption in the electronic wilderness, outside the paid-for enclosure, is happening on torrent sites like the embattled Pirate Bay, and the more respectable Limewire and Mininova, and promoting RouteNote artists on these channels is something we’re looking into. Ubiquitous innovator Trent Reznor or NIN positively encourages people to download his music from P2P networks, in order to drive sales of his ‘premium’ paid for content.

iTunes Accounts for 82% of Total Digital Revenues for CD Baby

Have you ever wondered how much iTunes account for digital sales online? One of our competitors CD Baby has published their 2008 results which shows that iTunes currently accounts for over 82% of their total digital revenues. This makes me wonder why artists are really keen to get their music in as many places as possible, instead of just focusing on the top retail points and building a base around them and their users.

Download The Peoples String Foundation – Red Dress Woman in Black via Bittorrent

RouteNote has been lucky enough to partner with Mininova to offer some of our video content to the 100 million people who use the site every month. Mininova is the worlds largest bittorrent client in which receives over 800 million pageviews every month.

One of the first videos we have added to Mininova is The Peoples String Foundation – Red Dress Woman in Black. The video can be currently viewed on our YouTube channel, but if you want to download the video to place on your computer or ipod here is the link to the torrent on Mininova.

Enjoy!

In the future RouteNote will be adding more videos and other content to Mininova and other bittorrent sites to help drive promotion of our artists. Stay tuned for more freebies coming soon.

The Pirate Bay Trial Results in Half of the Charges Being Dropped Within 1.5 Days

There has been a huge amount of talk in the last week about The Pirate Bay and their current court battle. Today was the second day in the trial brought against popular torrent site The Pirate Bay by a phalanx of media companies formed by Universal, Warner Brothers, MGM, EMI, 20th Century Fox, Columbia Pictures, and Sony BMG.

So far the trial has amounted to a circus wherein the plaintiffs have struggled to make their case. According to the media companies, The Pirate Bay has profitably caused over $13 million in damages by assisting copyright infringement and helping to make copyrighted material available. But they’ve done a lousy job presenting evidence that they’ve had three years to collect.

The operators – Hans Fredrik Neij, Gottfrid Svartholm Warg, Peter Sunde and Carl Lundstrom – are no longer responsible for assisting in the production of copyrighted materials, simply because the Pirate Bay merely points to available content.  The group will still be held responsible for making copyrighted material available by facilitating the discovery of torrents.

The modification, prompted by prosecutor Hakan Roswall, was regarded as a “simplification” by the IFPI.  Perhaps, though the shift means less charges, and a more accurate reflection of the role that the Pirate Bay plays.

Another RouteNote Testimonial

At RouteNote we are always keen to hear feedback from our clients and users. We are very proud to publish the the most recent RouteNote User Review.

It has been taken from the website of guitarist and producer Chris Bestwick who has recently uploaded and realeased his album ‘Mix A’.

Check him out, check his user review out.

http://chrisbestwick.com/index.php/blog/13-routenote-a-quick-user-review

http://www.chrisbestwick.com/

 

Thanks again for your feedback Chris!