MUSIC INDUSTRY BLOG

By the end of this year, the TuneCore Artist catalog will have earned over $30,000,000.

This means that there is a song selling by a TuneCore Artist on iTunes every second.

Currently, TuneCore distributes between 150 – 250 releases a day.

I went head to head with Jeff Price, President of TuneCore, to find out how he created the world’s largest distributor of music in only four years.

“Music distribution is what we do, and we do it better than anyone else”, Jeff started.  “We are the first place music stores come to get the music and we pride ourselves on this.  When we launched four years ago, we got to change the world: For the first time in the history of the music industry, anyone could ‘sign themselves’ and get worldwide distribution of their music while keeping all their rights and 100% of the money from the sale of their music.  That was a game changing paradigm then – and still is today!”

TuneCore recently announced a partnership with Universal Distribution (Interscope, Universal Republic, Island Def Jam, Motown, Geffen and more), bridging the independent music market with the most sought-after music catalog in the world.

“This was a deal I did solely to provide artists with more options.” Jeff comments.  “In a nutshell, in addition to regular old TuneCore.com, we will also be hosting and serving websites for Universal labels that provide artists with distribution while taking none of the artists’ rights or revenues.  If an Artist chooses to get their distribution via one of the label portal sites (as opposed to TuneCore.com), they will have a direct line into that label.  This means the label will be aware of you, have heard your music, be up to speed on the success you are having, etc.  The label can reach out to you to offer more marketing, promotion, physical distribution and anything else.  If they do, the artist can choose to talk with them, tell them no, tell them yes, tell them they will get back to them or simply decide to continue to do what they had been doing to that point in time.  All the options.  No strings.”

From physical distribution via 215 Guitar Center stores to media widgets that distribute TuneCore customers’ content across the social web, TuneCore has made a name for itself by providing dozens of opportunities centered on the most accessible and competitive music distribution model of our time: Flat Fee. No Commission.

Not distributing your music with TuneCore?  Start now with a 30% discount!

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Music discovery and playlist service, Grooveshark, was selected as one of ten winners in CNET’s 2009 Webware 100 in the “Audio & Music” category, sharing the spotlight with the formidable usual suspects including iTunes, AmazonMP3, and Pandora.  This is indeed a privilege for the Floridian upstart which triumphed over CD Baby, iLike, Sellaband, Jango, and other well publicized and funded music dotcoms.  Nearly 630,000 votes were cast this year.

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Digital music distribution is a hot item on this blog and those who read it know that I keep a close eye on the three major players catering to small independents, namely ReverbNation, TuneCore, and CD Baby.  All three have lowered the barrier of entry for indie artists and small labels to distribute their catalogues to iTunes and other major online retailers for upfront fees as opposed to hefty commissions by the likes of The Orchard, INgrooves, IODA, IRIS, and others, who generally avoid small players anyway.  Now, a new digital music distribution dotcom has emerged but with an ad-supported business model.  WaTunes aims to thrive on ad revenue by providing artists and labels with a free (no frontend fees, no backend commissions) distribution channel to online retailers such as iTunes, Napster, and eMusic.

The slightly questionable website service description and makeshift appearance promises to provide the same level of content marketing and distribution as its rivals, and much more.  In theory, WaTunes is offering a very attractive service to a huge potential market, but is it sustainable?  SpiralFrog, We7 and Qtrax have yet to prove that their ad-supported download services have legs.  In this economy, I’m not sure that any upstart can scale on advertising revenue alone.

Business models aside, I’m somewhat concerned about WaTunes’ cryptic service description and the fact that their web pages are riddled with spelling mistakes and poor marketing copy.  It’s a bit like walking into a fancy restaurant only to notice that the toilets are overflowing with shit halfway through your dinner.  Going with my gut here (no pun intended), I feel that the musician-led platform may be biting off more than they can chew… but I would love to be proven otherwise.  I like free.  Who doesn’t?

An independent artist by the name of Rustcycle contacted me a couple of days ago about his interesting marketing idea and cross-over musical offering.  Rustcycle (a.k.a. Adrian Johnson) developed a gorgeous looking 255-level iPhone and iPod Touch game which mimics the natural flow of particles when the player manipulates the electromagnetic field with his finger.  Far out.  The $0.99 game, aptly named NANO, is set to Adrian’s self-composed and produced ambient music, creating a “meditative, serene journey that stands in contrast with the tense experience of many other iPhone games.”  Adrian has differentiated himself by bridging two talents to create an experience that few artists can compete with or even conceive of.  By drawing users (paying users, incidentally) into a world of nodes and particles, Adrian is exposing his musical facets to a highly targeted new audience.

I love the thinking behind this and I praise Adrian for identifying and employing his strengths as a creative programmer in order to bring his musical attributes to the fore. 

Demo:

Related post: iPhone Artist Promotion

In September 2008, Billboard Magazine published a  list titled, “The 100 Best Ways For Your Music To Get Attention” which caught my attention this month when I received the top 20 from Peter Spellman’s Music Biz Insight newsletter.  Note the volume of high profile opportunities in the licensing branch of the music industry as opposed to the more traditional sales and ticketing divisions which would have dominated this list through the 90’s:

1. Placement in a television ad for Apple

2. Performance on Oprah (6.6 million viewership)

3. Placement in a television commercial that runs during a special event with significant viewership (97.5 million viewers for the 2008 Super Bowl, for instance)

4. Song Featured as iTunes “Free Single of the Week”

5. Song covered on American Idol (approx.  27 million viewers)

6. Placement in Activision’s “Guitar Hero” videogame (approx. 10 million unit sales)

7. Song placed during a hit movie’s opening credits

8. Placement in a heavy-rotation television commercial for Nike

9. Performance on Lollapalooza Main Stage

10. Placement in MTV’s “Rock Band” videogame (US sales total 3.4 million units to date)

11. Video on YouTube’s Most-Viewed Videos page for music (approx. 75 million unique visitors)

12. Cover editorial in Rolling Stone

13. Placement in Rockstar Games’ “Grand Theft Auto” (4.7 million unit sales and growing)

14. Placement on HBO’s “Entourage”

15. Video on the YouTube’s home page

16. Placement in ABC’s “Grey’s Anatomy”

17. Any single or video listed in the “Free on iTunes” section

18. Single played on Radio Disney (approx. 36.5 million listeners per week)

19. Performance on Bonnaroo’s What/Main Stage

20. Placement in CW’s “Gossip Girl”

“Maybe I’m just being old fashioned, but this iTunes, God bless ‘em, it’s going to kill music if they’re not careful”, 61 year old lead singer of AC/DC, Brian Johnson, told Reuters. “It’s a monster, this thing. It just worries me. And I’m sure they’re just doing it all in the interest of making as much cash as possible. Let’s put it this way, it’s certainly not for the love, let’s get that out of the way, right away.”

AC/DC has managed to top the charts again with their latest offering, “Black Ice”. What sets this decades-old group from other classic A-list chart toppers is their, well, ‘classic’ approach to the business: they have yet to release their music digitally.

“Black Ice”, AC/DC’s 16th studio project, sold 784,000 copies in its first week in the US alone through an exclusive deal with Wal-Mart.

This CD-only campaign demonstrates the band’s loyal customer base as well as, perhaps, the ability to truly drive sales the ol’ fashioned way when everyone else is pushing digital.

AC/DC, we salute you!

TuneCore, a digital music distribution company with a front door, fixed fee revenue model, may have conceived of the very solution independent artists have been seeking to get their digital tracks on major, online music outlets. Unsigned artists often rely on CD Baby for digital music distribution as they specifically cater to individual, burgeoning artists. More established artists and labels turn their catalogues over to the major digital distributors including The Orchard, IODA, IRIS and INgrooves. Without exception, digital distributors have been servicing their clients’ catalogue for a percentage of the proceeds paid to them from the retailers (i.e. iTune, Napster, Rhapsody) and pay the artist or label the remainder in monthly or quarterly intervals. 20% to 30% from the top, depending on who you are and the size of your catalogue is a standard distributor cut.

TuneCore, in contrast, charges its artist and label clientele upfront: 99 cents per song and 99 cents per store for each album and an annual $9.98 charge per album, instead of dipping into any backend percentage of proceeds due to the artist or label from downloads. It’s a simple and rather refreshing plan – certainly affordable – and, in my mind, challenges the services that the other distributors are offering. More importantly, it promises individual artists with a low profile and small or fledgling labels to access all the necessary portals for MP3 retail.