What to make of CD Baby’s 2008 figures

I’ve read this post from CD Baby touting their revenues and figures from 2008.

Here’s some key figures listed in that post:

• 277,000 albums for sale and 150,000 artists with active albums as of January 1st, 2009
• Of the 277,000 albums, 194,000 of them are available for digital distribution.
• 993,175 CDs sold in 2007; 1,013,478 CDs sold in 2008 – a 2% increase
• 39,100 new album titles added in 2008, up 7% from the previous year.
• Digital distribution revenues:  2007 – $17.4 million, 2008 – $25.4 million – a 17% increase
• $34 million paid out from CD Baby to artists, up 28% from 2007
• $228 paid out to each artist annually on average
• 4,000 artists earned more than $1,000; 200 artists earned over $10,000

Mmmmm…numbers.  What to make of all this?

The first thing I notice is the absurd growth in digital download sales.  This obviously catches the attention of a guy working for a CD duplication business.  We all expect CD technology to become obsolete someday, but how soon will that day come?  Will we ever see the day where we only download music? 

I didn’t get too worrisome thinking about the future of our industry.  The good news is they’ve also had an increase in physical CD sales while the rest of the big labels reported a 14% decline in sales.  They also show a 7% increase in new albums added from the year before.  This tells me that there are increasingly more independent artists out there who are recording and producing new music. 

The last thing I noticed was the average amount of money paid out per artist – $228 annually.  This is assuming all things being equal (which they are not; some will sell more, some will less).  Making a very rough estimate, the 4,000 high sellers are probably taking at least $6 million out of that pie.  This leaves $28 million to divide between 146,000 artists.  Again, assuming all things being equal (again, which they are not), this averages out to $191 per artist.  This is approximately $16 per month, or the equivalent of selling about 1.5 CDs per month.

CD Baby is an excellent service.  We’ve been recommending it to customers for years.  But the moral of story is that your CD isn’t going to sell itself on-line any more than it sells itself offline.  You still have to promote, play shows, and reach out to new fans.  Use CD Baby’s service to supplement your other sales and give you another distribution channel for your music.