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09/23/2013

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CD Baby CEO Tracy Maddux Knows What it Means to Do It Yourself

When Tracy Maddux—a passionate fan of live music—joined CD Baby, he decided he needed to see a show by each of the new employees he worked with. Nearly everyone at CD Baby plays music. It meant ...

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Tyler Volkmar
(812) 961-3723

CD Baby Reaches $300 Million Milestone in Artist Pay Out

What’s more telling is their annual payout growth this year.

On September 30th, CD Baby announced that they have paid over $300 million dollars to artists using their services. The CD Baby catalog includes almost five million tracks and makes up approximately 17% of the tracks available through iTunes. While hitting this $300 million mark is a significant barometer of the growth and viability of independent music, there is more significant data emerging than that indicator.

This year CD Baby expects its total payout to artists to be over $60 million. Last year, that number was $56 million. In 2011, the annual CD Baby payout for artists was $48 million. In other words, CD Baby’s annual payout to artists is accelerating greatly.

“It took us eight years to pay out the first $50 million,” says CD Baby CEO, Tracy Maddux. “But now our artists are earning at least $50 million per year and this year we expect to beat $60 million.”

One of the most compelling things about CD Baby’s significant monetization on behalf of musicians is their broad base of artists. Among the over 325,000 artists they represent is a wide range including former major label artists, top-selling indie artists, part-time professionals, and profit-making musical hobbyists.

Artists like Macklemore, The Antlers, The National, and Bon Iver came up being distributed by CD Baby (their catalog titles remain there). Ingrid Michaelson and Gregory Alan Isakov have continued their partnerships with CD Baby throughout their decidedly independent and hugely successful careers. Artists like Greg Brown and Grant Lee Phillips once again demonstrated how it’s possible to drop the old label system and run your own career as an indie.

One thing they all have in common is that they stick around and continue to use CD Baby over the long haul because of the high level of trust that artists have with the company. CD Baby’s attrition rate is one of the lowest in the music business with less than two or three percent of artists leaving in any year.

Because of its great relationships with independent artists—including high levels of transparency, fanatical customer service, and like-clockwork, consistent payments—CD Baby’s catalog continues to grow rapidly. In addition, CD Baby’s offering to artists continues to broaden. While they outshined and grew the market for physical and digital distribution years ago, and have certainly widened into supplying streaming services with content, their expansion includes helping artists monetize new streams of revenue. These include monetization from direct-to-fans sales, online video through their YouTube and Sync service, and publishing through CD Baby Pro.

“We have a growing number of artists doing compelling things on YouTube that generate a lot of sales,” explains Kevin Breuner, CD Baby’s Director of Marketing. “Each month we find out about more of our artists doing things outside of the mainstream to generate revenue. We keep adding services to empower them to do that—tapping into multiple streams of revenue—no matter where they are in their career."