CD Baby is an online music store specializing in the sale of CDs and digital music downloads from independent musicians to consumers. The company is also a digital aggregator of independent music recordings, distributing content to several online digital music retailers.
CD Baby has achieved recent value as one of the few sources of information on physical CD sales in the independent music industry, surprising analysts by reporting continued increases in independent CD sales all the way through its most recent report at the end of 2008, apparently showing that independent CD sales move separately from the major label sales reported in the press.
CD Baby was the trading name of Hit Media, Inc., a Nevada Corporation[1] founded by Derek Sivers in 1997. Sivers sold CD Baby to Disc Makers in 2008 for $22 million, bequeathing the proceeds to a charitable trust for music education in an arrangement that provides him with 5% per year of the company's sale price in income (annually $1,100,000 pretax, based on the sale price of $22 million reported by Sivers [2]) until death, while upon death the remainder if any will ultimately go into the trust.[2]
The firm currently operates out of Portland, Oregon.[3] CD Baby allows artists to set their price point for selling physical compact discs – CD Baby retains $4 of every sale, the remainder gets paid out to the artist on a weekly basis. They also charge a one-time $39 setup fee per CD.
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CD Baby began with its founder, Derek Sivers in Woodstock, New York. Sivers was a musician and scion of a wealthy real estate family, who created the website to sell his own music. As a hobby, he also began to sell the CDs of local bands and friends. He chose to make CD Baby a "utopian" online store for independent musicians. To do this, Sivers followed four main principles based on his personal preferences:
In addition, Sivers made sure to listen to every CD he sold (currently several people are employed to do this). The operation was run mainly in Sivers' bedroom.
Sivers, eventually hired John Steup as his vice president and first employee. In an interview, Sivers recalls saying to Steup: "This thing might get huge one day. I mean, we might have 100 artists here."[4]
Steadily, CD Baby grew as more artists wanted to sell their music through the website. Sivers and his employees always dealt with the artists directly.
Beginning around 1999, Sivers oversaw expansions of his roster with such collaborations as the one with Oasis Disc Manufacturing President Micah Solomon, where Sivers partnered with Oasis Disc Manufacturing [1] to distribute the complete Oasis artist roster at the CD Baby store (an arrangement still valid currently).[2]
CD Baby was somewhat inspired by a website named Songs.com founded by Paul Schatzkin, Tom Kimmel, and Michael Camp. Songs.com, though not having the nonexclusive policy CD Baby does, was also a website that sold primarily independent music. However, ten months after Songs.com was sold to Gaylord Entertainment for $3-million, Gaylord folded all its digital initiatives, including Songs.com. Schatzkin would then send an email to members of Songs.com, recommending CD Baby. Schatzkin was also the instigator of CD Baby's toll-free phone line, "1-800-BUY-MY-CD."
Sivers never accepted money to advertise a CD more than any other CD and didn't negotiate with investors or display advertisements. Currently, there are one hundred or so employees of CD Baby whose work ranges from warehouse work to programming to business development to customer service to listening to CDs.
Although the majority of artists who use CD Baby are North American, about thirty percent of orders for CD Baby are overseas.
In 2003, Sivers won a World Technology Award for Entertainment.
In 2004, CD Baby began offering a digital distribution service. By opting in to their digital distribution service, artists can authorize CD Baby to act on their behalf to submit music for digital sale to online retailers such as Apple's iTunes, Emusic, Real Network's Rhapsody, Napster, Amazon MP3, MusicMatch, Didiom, and MusicNet among others. Songs on CD Baby are now also available on Spotify.
In August 2008 it was announced[5] that Disc Makers, a CD and DVD manufacturer, bought CD Baby (and Host Baby) for 22 million dollars following a 7-year partnership between the two companies, according to Sivers.
Up until 2009, CD Baby ran on PHP and MySQL.[3] It gained brief notoriety when Sivers announced publicly in early 2005 that he was rewriting all the systems in Ruby on Rails and PostgreSQL.[6][7] After about 2 years of work, he felt that the rewrite was still less than half done, and he threw the new code away and rewrote it again in his original programming language, PHP, and database, MySQL. He said it took him only two months to finish. This was a widely discussed move, because some saw it as a demonstration that Ruby on Rails was overhyped and not up to the task of solving large problems. Sivers himself summed it up by saying that "Rails was an amazing teacher" but that PHP was perfectly up to the task once he had learned the lessons Ruby and Rails taught him.[8]
CD Baby relaunched the website with major infrastructure changes (using ASPX) to support future growth, including redundancy that protects the original material on the site in a way that initially was not available to the artists and incurred significant risk to them. The website is no longer being run with the original or revised PHP of Sivers. The new site experienced significant glitches initially, but this did not prevent the company from continuing to pay its artists as sales were reported to CD Baby by digital partners and others, monies received and artist-chosen payment points reached.[9][10]
CD Baby has also continued to invest heavily both in technology and people, doubling the support staff during the system transition and adding a support team with a significant presence on the Forum, while maintaining existing email and phone technical support.
With a catalogue of more than 250,000 albums and over two million digital song tracks, CD Baby is home to the largest online community of independent recording artists. Music created by these acts, ranging from part-time hobbyists, to full-time musicians with successful careers, spans all genres from avant-garde to world music. Notable artists releasing their music via CD Baby include American country acts Gretchen Peters, Tom Russell and Anndrea Naidu, Canadian singer-songwriter Allison Crowe, instrumental musician Michael Aguilar, UK duo Nizlopi, and, Italian-born, American classical violinist Nadja Salerno-Sonnenberg, Music Director of the New Century Chamber Orchestra, American rock and alternative band Beyond the Element, Russian American opera singer Elena Zoubareva, and Big Sur, CA based reggae band RastaFarOUT. Grammy Award-winning artist Janis Ian, a pioneer among independent musicians marketing online, sells her CDs on the website as well as through her own website.
In addition to the independent artists in the CD Baby catalog, many of whom are not well known to mainstream audiences, there are also artists signed to a major record label at different points in their careers. These include 60's legend Marty Balin, 80's icon Tiffany, Europe's Lory Bianco, and newer American acts such as The Low Anthem, Regina Spektor and Jack Johnson (who sold his music at CD Baby prior to signing with a mainstream major label). The catalog also includes an album with early demo songs by Madonna being sold by her former producer Stephen Bray. Gary Jules first released his debut album containing the hit song Mad World on CD Baby. American Idol winner Jordin Sparks' EP For Now was sold via CD Baby as was Soulja Boy's album Unsigned & Still Major.
CD Baby statistics as of December 10, 2009:[3]