Long Live Physical: CD Sales Defy Industry Gloom at CD Baby, Rise by Double Digits Two Years Running

In the long litany of woes afflicting the traditional music business, the announcement of falling sales, especially for once-profitable physical formats like CDs, have become de rigueur. Yet the numbers have taken a dramatically different turn at the world’s largest distributor of independent artists, CD Baby.

RIAA reported a drop in CD sales for 2012/13 of 12-13% across the industry. Compare that with CD Baby’s increase in sales: in the same period, CD Baby sold 12% more physical units than the previous year. The double-digit growth looks likely to hold for this year, as well, with sales already up 10% (compared to the decrease of 19% for the industry as a whole in the year to date) with the holiday buying season still to come.

What accounts for these surprising results? The ability to buck downward trends has a lot to do with CD Baby’s open-door policy and passionate pursuit of every possible opportunity for independent artists. “We aggregate a lot of music, and many of our artists fall into genres that are popular with physical buyers,” says Robert Bach, VP of Operations at CD Baby. “That means we can weather the ups and downs a lot more easily.”

Musicians playing jazz, roots music, and classical—all genres with strong audiophile fanbases—continue to sell CDs, while rock and electronic artists have found new excitement among their listeners with vinyl. Some independent artists are forging their own, new genres, from hickhop (the curious lovechild of country and rap) to trailer music (the epic sounds heard in trailer videos or video games, which have become big sellers at CD Baby).

Yet part of CD Baby’s ability to thrive while everyone else’s sales sag is the result of a savvy, concerted effort to push more independent releases into traditional sales chains, be they online (Amazon) or in brick-and-mortar retail (the huge one-stop distributor Alliance, which operates both online and via thousands of stores). By working closely with partners like Alliance—targeting the distributor’s sales reps with relevant products, working hard to catch the ears of retail—CD Baby has cut new pathways for artists who would have once been shut out of traditional channels once dominated by major labels.

Furthermore, CD Baby is the only distributor of independent artists that combines all significant distribution forms: digital sales, streaming, physical (CDs and vinyl), direct-to-fan (physical and digital), YouTube and sync, and publishing. These diverse streams working hand in hand create a snowball effect for the artist.

“Our intent is to give music fans as many reasons and ways to buy as we can so we can continue to support the careers of independent artists, wherever their fans can be found,” says Tracy Maddux, the CEO of CD Baby. “Our increase in physical sales fulfills our mission of helping independent artists make money from their music.”

While other companies have written off the future of physical sales, CD Baby has doubled down to embrace it as one of many forms of revenue for musicians.