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 ...
Strange things are happening to earn independent musicians more money thanks to the explosion of online video. The band The Covering started seeing a spike in digital sales of an old song thanks to an impromptu “how to” powerwashing video. Rock and dubstep band Family Force Five got an extra 1.7 million views thanks to a basketball trick shots video, including 1000-foot shots to basketball hoops raised with helium balloons. While YouTube was once seen as a potential promotional outlet, this is the year it became a legitimate income stream of musicians at all levels.
In 2012, the largest music distributor of independent musicians’ recordings, CD Baby, started helping their 300,000+ musical acts turn on a new significant revenue stream: video soundtracks. CD Baby is in the process of uploading to YouTube close to two million music tracks opted in by their songwriters. An additional 10,000 tracks are being opted in every week. As a result, CD Baby is paying out over $200,000 per quarter to their artists for use of their music in these user-generated videos. By Fall 2013, they will have paid out, in just a year’s time, $1 million to artists whose songs are being used in MicroSync videos (user generated videos with legally licensed music).
While trade press headlines are filled with every move by Spotify, Pandora, and iTunes Radio, YouTube is quietly fast-becoming the music streaming destination of choice for young teens. Furthermore, YouTube is bigger than Sirius XM, Spotify, and Pandora combined. Unlike most of the other services, YouTube is already profitable.
“YouTube’s playlisting works better than most music services, they have the best recommendation engines on the Internet, and they have just touched the tip of the iceberg with music,” says Kevin Breuner, CD Baby’s Director of Marketing. “They are going to come down with a crushing blow. They have massive reach and it’s not passive like Spotify. It has the perfect storm of everything. There are six billion hours of videos watched every month. That’s one hour per person on earth. All the music is available there for free already. We’re just enabling our artists to get paid for it.”
CD Baby’s MicroSync service connects their enormous catalog of music with millions of online video creators. Users of YouTube and several other video applications such as Animoto, Social Cam, and Stupeflix add music to their videos and artists get paid through ad revenue shares or licensing fees. Over 15 million videos have been created using music from CD Baby so far.
Artists that opt into the CD Baby’s MicroSync program get a share of those fees as well as a share of YouTube ad revenue every time a video with their song is viewed there. CD Baby also provides the music to marketplaces where professional and amateur filmmakers and videographers can license on demand music for full-length films, television, independent film, and corporate and semi-professional videos.
In addition to building a bridge between online video soundtracks and monetization, CD Baby is creating original YouTube programming to further their mission of helping musicians. All artists that opt into MicroSync will have album-art videos automatically created and uploaded to YouTube on their behalf. While fans frequently upload full-length audio to YouTube with a single still image, CD Baby artists are now able to ensure their music is represented with the album art, correct spellings and sales-friendly meta data, all album tracks, and in professional quality; as well as getting a revenue share on all advertising dollars earned for their music. Auto-generating and uploading these two million videos has begun already and is expected to be completed by the end of 2013.
CD Baby’s album art videos will be featured on thirty genre-specific channels. In addition, CD Baby is producing their own live performance video channel and a DIY Musician channel to continue to help artists market and make money from their music. As this Multi-Channel Network grows, CD Baby expects to see exponential growth in video traffic for their artists over all.
“A lot of artists may not know to upload their videos,” explains Breuner. “By taking care of that for thousands of musicians, we are going to dramatically increase their plays and payouts. But more importantly, along with the how-to music business tips we will have on our DIY Musician channel, many of our artists will learn the importance of video creation and start doing more video work.”
User-generated video is exploding, as can be seen with popular social sharing networks like Facebook going into video with Vine and Twitter’s Instagram acquisition introducing video this month. Cisco reports that 50% of all Internet traffic will be from video by 2017. Everyone’s videos are better with music.
“Music is a shortcut to great video,” says Paul Anthony, founder and CEO of Rumblefish, CD Baby’s MicrosSync partner. “Information is communicated visually, but emotion is created aurally. The soundtrack of a video dictates how you interpret the emotions of what is happening. We are witnessing the transition from a video space of a small group of elite creators to one where everyone is a creator. And the fundamental building blocks of storytelling are information and emotion. You need music for the millions of videos being uploaded every day.” CD Baby now provides home video producers instant access to a huge legal catalog of music.
“No matter how an artist's music ends up on YouTube, we're able to monetize it for them,” says Breuner. “Gone are the days of trying to restrict content usage. Instead, artists are encouraged to unleash the power of user-generated content and get their fans creating and uploading video with their music. The more videos using their songs, the bigger the payday.”