CD Baby | a classic JumboShrimp company

CD Baby is a quintessential JumboShrimp company. Meaning, they are getting bigger by being smaller. Instead of selling CDs from mainstream artists from the rosters of major labels, CD Baby sells CDs only from independent artists (musicians not affiliated with a major label).

What began as a way for Derek Sivers to sell his band’s CDs, has turned into a way for 80,000 other independent artists to sell their CDs. And sales are exactly what’s happening with CD Baby having sold over 1.34 million CDs to online customers since 1998.

NPR’s Morning Edition profiled CD Baby this morning in an informative seven-minute story (click here to stream the audio).

In the story, CD Baby founder, Derek Sivers, recounted how/where/why he got the idea of starting CD Baby by approaching online retailers in 1996 …

I’ve sold 1,500 copies of this CD on my own and would you guys (online retailers) like to sell it? And they said, ‘Who is your distributor?’ I said, ‘Well … I don’t have a distributor and I don’t really want one. Can’t I just sell a box of CDs to you guys -- you sell it and when someone buys it, you ship it to them and pay me?’ And they went, ‘Ha-Ha … yeah, right … it doesn’t work like that kid.

So Derek setup a credit card merchant account and began selling his band’s CDs on the band’s website. Soon thereafter, friends began asking Derek to sell their CDs on the site as well. Once the band’s website became too commerce clunky, Derek began CD Baby.

Derek describes CD Baby as, “… a utopian experiment in how a distribution deal would work from a musician’s point-of-view.” The mechanics behind CD Baby do indeed favor the musician:

Musicians pay a one-time $35 setup fee and send CD Baby five CDs.

The artist sets the selling price and CD Baby keeps $4 from each sell with the musician keeping the rest.

Plus, CD Baby will never kick out any artist for not selling enough.

Sounds utopianistic to me.

But what really impresses me about CD Baby is how Derek measures success.

Instead of measuring success by how much revenue is generated for CD Baby, Derek measures success in how much revenue is generated for the independent musicians. And to date, CD Baby has paid out over $11.4 million dollars to musicians.

[Blogger’s note: I have had first hand experience with CD Baby having purchased a few Blaze CDs and Hot Buttered Rhythm CDs in the spring of 2003.]

*********************************************************************

For more on the remarkable aspects of CD Baby, click below:

About CD Baby | CD Baby website

“CD Baby – An Outstanding Customer Experience”| Ripples blog | Dec. 1, 2004

“Be Yourself and Build the Buzz” | Church of the Customer blog | Nov. 7, 2003

Article/Interview | Future of Music Coalition | Oct. 8, 2003

Comments

[Rob Clark]

One other note about CD Baby:
CD Baby has recently another JumboShrimp company Mp3ria ( http://www.mperia.com ) to offer downloads of individual tracks. Mp3ria is the indy band version of itunes, offering downloads of songs for as little as a quarter each. Most artists provide you with the option of previewing the entire song before choosing to purchase and all songs are downloaded as MP3s. What's more, 70% goes directly to the artist.

MP3ria had a growing collection of artists, but the recent deal with CD Baby has increased their collection by about 300,000 songs.

What impresses me about both CD Baby and MP3ia is that they make the effort to deal fairly and openly with both the bands and artists as well as their customers. Profits for them, for the bands and a great selection at low prices for the consumers. A Win-win-win scenario.

[johnmoore (from Brand Autopsy)]

Good point.

The NPR story mentions CD Baby is into digital downloads but that it is a money maker for musicians and a money loser for CD Baby. Derek Sivers doesn’t seem to mind as he is quoted as saying he is perfectly content with CD Baby riding off into the sunset so long as the music gets out to the people.

And yeah … I too love that CD Baby recognizes the interdependence that exists between them and the independent musician.

[David St Lawrence]

John,

Thanks for the mention. This is my first visit and the writing is excellent.

I have been reading about your site for some time on "What is your Brand Mantra", but never took the time to visit before, probably because I am not a branding professional, nor am I into autopsies. :)

That was extremely shortsighted of me because so many of life's interactions can be analysed by looking at them as branding problems to be solved. Blogging success is all about understanding and using branding concepts.

You will be added to my thought-provoking bloglist today.

[johnmoore (from Brand Autopsy)]

Thanks David ... nice to see your ripples brought you to Brand Autopsy. Appreciate the comments and for adding us to your blog log.