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<\/p>\nIndependent artists have never had access to so many customers. A single distributor can get an artist\u2019s music into digital services around the world. U.S. artists were getting Spotify royalties before the service was available stateside. Now they\u2019re getting royalties from Deezer, Bloom.fm and other services not yet available in the States. Since distributors have added their catalogs to YouTube, independent artists can reach listeners through the world\u2019s most popular video service.<\/p>\n
Access to consumers has meant hundreds of millions in revenue through the years. CD Baby has paid out more than $300 million since it was founded in 1998. TuneCore has paid out more than $330 million since it launched in 2006. This year, CD Baby expects to pay out $58 million — that\u2019s cash to artists minus the company\u2019s distribution fee. This year\u2019s distributions should be about 9% higher than the $53 million paid out last year and 35% greater than 2011\u2019s distributions of $43 million.<\/p>\n
The future may be streaming, but independent artists get most of their revenue from downloads. CD Baby artists will receive 77% of their revenue from downloads, down from 80% last year and 81% in 2011. CD Baby marketing manager Kevin Breuner says that about 73% of digital revenue and about 61% of total revenue comes from iTunes.<\/p>\n
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Streaming revenue is small but growing. This year, CD Baby will get 8% of its revenue from streaming services, up from 5% and 2% in the previous two years. Subscription services like Spotify and Rhapsody are included in CD Baby\u2019s streaming revenue. Noninteractive services like Pandora and SiriusXM, which pay royalties through SoundExchange, are also not included.<\/p>\n
Also excluded from the streaming figures is YouTube, a service long used for promotion that is gaining as a revenue source. CD Baby has delivered its catalog to YouTube and the company is experiencing strong revenue growth. CD Baby has paid out more than $1 million, and the last quarterly distribution was about $300,000. \u201cIt\u2019s something we think is just going to explode,\u201d Breuner says.<\/p>\n
Independent artists are aided by continued demand for physical product. CDs and LPs will account for 15% of artist revenue this year, even with last year and down slightly from 17% in 2011. Some of that revenue comes from CD Baby\u2019s partnership with Alliance Entertainment that puts independent artists\u2019 albums into brick-and-mortar stores. But those figures don\u2019t tell the entire story. Not counted in CD Baby\u2019s artist distributions are artist earnings from selling CDs and LPs themselves. Anyone who attends concerts frequently knows the venue merchandise table is one of the last bastions of physical product.<\/p>\n