CD Baby’s ‘Stages’ can serve both passion and professionalism

CD Baby’s ‘Stages’ can serve both passion and professionalism

The traditional view of the fast-growing artists direct sector as a funnel for recorded music is becoming outdated. Nearly the same percentage of these 6.4 million creators are passionate, but do not expect a full-time career (36%) as those who do (38%). However, because they have more disposable income to spend on their passion, those “passionate enthusiasts” provide a similar revenue opportunity as the career seekers. Thus, revenue potential is becoming more tied to what creators will spend rather than what they will earn.

To serve artists with varying aspirations, CD Baby has developed a range of offerings through its ‘Stages’ program. All artists pay a one-time fee per release and forfeit 9% of download and streaming revenues to CD Baby thereafter. Artists under the ‘Essentials’ tier receive free add-ons like sync licensing, CD / vinyl manufacturing and fulfillment, and music promotion tools. This tier serves the passionate enthusiasts who, despite not wanting a full-time career, still want to see their listenership grow. From there, artists can apply to join the (also free) upper tiers: ‘Stages Plus’, which includes playlisting on CD Baby-owned playlists and access to advertising via found.ee, and ‘Label Services’, which includes ‘hands-on’ support and marketing tools like editorial playlist pitching. These tiers serve the career seekers and full-time professionals who are looking to take their music careers to the next level.

However, the program has room for fine-tuning. The ‘Stages’ system implies that all artists aspire to advance through each stage, when in reality, a likely 36% are happy to remain at the lower ends. Also, knowing that passionate enthusiasts have more to spend on their passion — and in fact, spend more annually on music-making tools than career seekers — CD Baby could likely stand to collect a higher share of streaming revenue from these creators, and / or an additional fee for marketing tools. While the distribution sector’s ‘race-to-the-bottom’ mentality discourages this kind of move, the brave distributor that charges for higher-quality additional services should find a market, so long as those services are worth the added cost.

Roles

This report is relevant to the following roles:

Business Strategy