CD Baby Aids Indie Artists in Online Monetization
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.