[Infowarrior] - Amazon tells RIAA essentially to bugger off

[Richard Forno]

TuneCore, Amazon Set to Unveil On-Demand CD Sales

     * By Eliot Van Buskirk Email Author
     * May 21, 2009  |
     * 4:10 pm  |

http://www.wired.com/epicenter/2009/05/amazon-to-unveil-on-demand-cd-printing-service-with-tunecore/

TuneCore is poised to partner with Amazon’s on-demand CD-printing-and- 
distribution service, Wired.com has learned. It’s a deal that could  
put powerful new physical publishing options in the hands of  
musicians, even as the world goes increasingly digital.

The service is expected to be announced Thursday, linking Amazon with  
TuneCore, a novel digital distribution startup that’s made waves  
signing the likes of Trent Reznor, Keith Richards and other stars  
seeking a way out of the label system, as well as slews of garage  
bands and hopefuls on their way up.

Tunecore will charge just $31 a year in upfront fees to handle a 10- 
track CD from pressing to delivery, passing all other costs through to  
the buyer. In other words, the service promises to remove nearly all  
of the risks of short-run CD manufacturing, which can cost musicians  
hundreds or even thousands of dollars for discs that rarely sell  
enough to cover expenses.

“As an artist, you have unlimited physical inventory, made on demand,  
with no upfront costs and worldwide distribution to anyone who orders  
it at Amazon.com,” said TuneCore CEO Jeff Price, formerly of indie  
label SpinArt Records (Pixies, KaitO, Apollo Sunshine).

The deal comes as physical music sales are tanking and as major CD  
distributors like Amazon seek to evolve to a digital model. Yet Price  
suggests that there may be life left in good old physical storage  
media, with a slight twist. Why would people buy music on CD if it’s  
also available in iTunes, Amazon MP3 and other digital stores?

“Why not?” responds Price, who says he believes the costs are so low  
it will makes sense for lots of bands to try it out. “Let the music  
fan decide how they want the music.”

In addition to competing with downloads and streaming, one obvious  
drawback to this model is that you can’t sell an on-demand CD at  
shows, where enthusiastic fans are most likely to pick one up. But  
Price says labels wondering why artists still need them now have yet  
another thing to worry about. When you can sell CDs on Amazon for 30  
bucks, who needs a label? Certainly not Reznor, an early TuneCore  
adopter who once paid the service 38 bucks to distribute a quadruple- 
length album through Amazon MP3.

Amazon has offered on-demand CD printing for about a year through its  
CreateSpace acquisition, for a flat fee of $5 per disc. TuneCore’s  
massive footprint means far more bands will use that service, because  
it’s now just another checkbox in the system they already use.

For TuneCore, the deal expands its primary business helping indie  
artists get digital distribution through online outlets such as  
iTunes, Napster and Amazon MP3. TuneCore will now compete directly  
with CDBaby, the current leader in low-volume CD manufacturing and  
distribution. CDBaby charges $278 for 100 discs, although it recently  
lowered its minimum order to just five copies.

Brooklyn-based TuneCore gave us a peek inside its accounting system,  
which shows the most successful artists on the service regularly  
earning upwards of $20,000 per month. Chump change this is not.

As with its digital distribution service, TuneCore passes 100 percent  
of Amazon’s payout to the artist — about 40 percent of the retail  
price. If one of Amazon’s 80 million customers buys your 10-song CD on  
Amazon for $8.98, you’ll receive $3.59. After selling just nine discs,  
you’re in the black. TuneCore takes care of the UPC code, artwork, bar  
code, CD label design and so on, so that artists can concentrate on  
writing songs — and cashing checks.

The on-demand CD partnership with Amazon is just the latest in a long  
string of successes for the 2006 startup, whose distribution catalog  
dwarfs those of the labels.

“There’s more music released in one day on TuneCore than there is on a  
major [label] in the course of a year — in three days, more than all  
the majors combined, and within a month, all the majors and indies  
combined,” explained Price. “TuneCore artists have generated over $32  
million in revenue from music sales over the past 22 months.

“Some of the artists, frankly, have been selling more than the  
Billboard Top 40 artists,” he added. “It’s just not being picked up by  
the mainstream places [like SoundScan] that track sales.”

As their label contracts expire, some fairly heavy hitters are signing  
up for TuneCore. In addition to Reznor and Richards, the service now  
handles distribution duties for Joan Jett and other luminaries. But  
unsigned bands are always found among TuneCore’s top sellers. For  
instance, Never Shout Never sold over 250,000 songs in 60 days, as  
well as 30,000 T-shirts (also handled by TuneCore).

Universal Music Group — the biggest record label in the world — has  
also partnered with TuneCore to offer additional services to its indie  
artists. For $50, Universal’s Grammy-winning producers will master  
your music for CD before it gets distributed. And for another as-yet  
undisclosed fee, Universal’s art department will also design the high- 
resolution PDF that iTunes now requires with each album submission —  
all they need is four images and the names of your songs.

TuneCore has other plans in the works:

     * Amazon will launch a TuneCore-branded section next month.
     * A TuneCore widget will soon allow bands to distribute tweets  
and songs to fans.
     * If you sell 100 songs in the New York or Los Angeles area, you  
get to play Le Poisson Rouge or The Roxy, earning a guaranteed minimum  
of $100 — even if no one shows up.
     * TuneCore is working on a deal with live music behemoth Live  
Nation/House of Blues that would give artists who sell a certain  
number of songs a live gig, also with a minimum guarantee of $100.
     * If you sell enough songs through TuneCore, MusicNotes will  
score one of them into downloadable sheet music so that others can  
learn how to play your music.
     * Another deal rewards bands who sell a certain number of songs  
with 16 packs of Ernie Ball guitar strings and 8 packs of bass strings  
for free, every month.
     * Yet another deal lets bands who hit certain metrics offer fans  
the chance to wrap Blackberries, computers and other gadgets with an  
image of the artist.
     * A TuneCore iPhone app will soon allow 30-second and full-song  
streams for participating bands.

Here’s how you can distribute a CD through Amazon using TuneCore. Once  
you’ve signed in, click Add Album: