Selling music online (updated Nove 2014) by Ian Dustry

band on stage

Before new media tools and the rise of the web, musicians were forced to deal with the tiresome and complicated network of organisations and businesses that manufacture and distribute CDs and LP's, collect royalties and oversee all the many facets of the "music industry". Many of these organisations and governing bodies were self serving leeches, seeming set up only to make the lot of the independent music maker miserable. Although there are now many alternative ways to sell music, many of the old guard organisations have been replaced by new ones who aren't much better.

To some extent the new opportunities afforded by the world wide web and mobile technologies have not solved the fundamental question all would be music professionals must ask ...

How can I bring my music to the attention of the public and convince them it has a value that is worth paying for?

There is a growing appreciation that the "old world" record companies were and are nothing more than marketing companies with the financial clout to get their artists music heard. Of course that didn't mean they could force the public to buy their wares any more than you or I can (8 out of 10 acts signed to major labels lost money for them).

So, how then can the independent music maker make themselves heard? Many are saying that the music makers of the future will only be able to make a living out of selling tickets for their performances and there seems to be some evidence that this is becoming increasingly true. Many of my friends only sell CDs at their gigs, often offering deals if you buy a ticket and CD together.

There appears to be a great deal of conflicting information on the changing habits of music buyers but here are a few facts that appear to be true ...

  • physical formats (CDs mostly) are in (slow) decline
  • there is a (mostly older?) demographic who prefer the quality of CD to MP3 and who want something physical for their money
  • many punters like the convenience of buying downloads but are suspicious of the long term compatibility of an MP3 DRM license based format
  • more tracks are downloaded illegally than legitimately but this is fast changing
  • a vast proportion of the population do not believe that software only based media has any intrinsic value because the "manufacturing" process is not evident in the artifact
  • Apple have proved that a captive market tied to a proprietary and stylish hardware device will buy downloads, but the success of their unique combination of hardware and software has not been emulated by any other company
  • punters don't like subscription services
  • people still like the physical activity of shopping (ie walking into a shop)
  • in the download world, only Apple and iTunes are making any real money
  • its not only the price and product, it's the shopping experience too

All of these issues need to be considered by recording artists and producers of music for sale. The remainder of this article deals with the current available processes and options.

For simplified advice on uploading you music to free and paid-for download web sites, click here.

 

Problems independent music makers must overcome

Producing, recording, marketing and selling your music may make you appreciate how many jobs "traditional" record companies have to undertake. The following are the primary processes of producing and selling your music online ...

  1. Record, mixdown and master your music
  2. Decide how you want to sell your music, physical product (CD, vinyl) or digital downloads
  3. Encode your digital music files in such a way as they can be digitally identified and catalogued
  4. Barcode your CD container and vinyl sleeves in such a way as they can be digitally identified and tracked
  5. Encode your digital music files in appropriate formats for digital download (MP3, WMA, AAC etc)
  6. Duplicate (produce physical, or "mechanical", CDs and vinyl records)
  7. Distribution / retail / sell / download
  8. Market and promote
  9. Get paid
  10. Safeguard your copyrights

You will find an artcile detailing all the processes I undertook to sell my 2010 LP Songs Sung here.

1. Record, mixdown and master your music

Read our Music Recording pages to get help in many aspects of music production.

2. Decide how you want to sell your music, physical product (CD, vinyl) or digital downloads

The primary options are ...

  • CD and vinyl retail from your own website (take cheques or credit card payments and post CDs to customers)
  • CD and vinyl retail from an online shop (eg Amazon, CD Baby). You supply them with bar coded stock.
  • Digital download from your own website ( (take cheques or credit card payments, you will need secure e-commerce facilities)
  • Digital download from a retail digital distributor website (eg iTunes Music Store, we7, indiestore.7digital.com, Band Space etc)

3. Encode your digital music files in such a way as they can be digitally identified and catalogued

Whether you plan to sell CDs or downloads direct from your site, via a digital retail distributor (eg iTunes Music Store), or via an online shop (eg Amazon), it is a good idea to produce digital masters of your music which include a means of identifying them. This is not an essential process but if you can do it for free, still worth doing.

There are 2 primary ways of doing this ...

  1. ISRC codes
  2. ID3 codes (for MP3 files)

The ISRC code help digital retailers and distributors track/identify your music (but it is unclear is all use them), but are necessary if you want to submit disc details (such as artist, track names etc) to the Gracenote CD database (more later).

ISRC (International Standard Recording Code)

The industry organisation for overseeing standards for embedding and recognising "digital fingerprints" is the IFPI.

The IFPI oversees the ISRC (International Standard Recording Code) system of "digital fingerprinting". ISRC codes are unique numbers that can be embedded in a music file during the mastering process and which can be used to identify it and track copying and distribution. ISRC numbers are embedded into CDs during mastering prior to duplication.

ISRC (EAN) codes can be embedded into the sub-code data of individual CD tracks, but it is not clear if when a CD is subsequently ripped to MP3 (perhaps to create masters for digital distribution), whether or not this data survives. ISRC codes were developed primarily for CD, DCC, MiniDisc and R-DAT formats. However, because it is often free to join the ISRC agency in your country, and obtain a code for your label (you generate individual track codes from it), you may as well do it.

The following is from the ISRC web site ...

The ISRC (International Standard Recording Code) is the international identification system for sound recordings and music video recordings. Each ISRC is a unique and permanent identifier for a specific recording which can be permanently encoded into a product as its digital fingerprint. Encoded ISRC provide the means to automatically identify recordings for royalty payments.

The International Federation of the Phonographic Industry (IFPI) recommends that all music producers use ISRC.

BENEFITS OF USING ISRC
The ISRC system is the key to royalty collection for recordings in the digital information age.

* ISRC is a unique, reliable, international identification system.
* ISRC provides a unique tool for the purpose of rights administration.
* ISRC is a useful identification tool in the electronic distribution of music.
* ISRC coding is compatible with standards developed in the field of consumer electronics and is readable by hardware already used in the recording industry.
* ISRC is cost effective - it can be put into operation without requiring special investment in equipment or technologies.

The International ISRC Agency at IFPI can be contacted at ...

International ISRC Agency
c/o IFPI Secretariat
54 Regent Street
London W1B 5RE
United Kingdom
www.ifpi.org/isrc/
Email: isrc@ifpi.org
Telephone: 44 (0)20 7878 7900
Fax: 44 (0)20 7878 7950

Some facts about ISRC codes

The ISRC website(www.ifpi.org/isrc/) has excellent and clear information on this subject including a useful FAQs. Here are some of the main points ...

  • You do not have to be associated with or a member of any music business organisation to get an ISRC code for your recordings
  • ISRC codes can apply to CDs, videos, enhanced CDs, DVDs etc
  • Every issued ISRC code is unique
  • MP3 files use the ID3 system of digital tags and these CAN include an ISRC code
  • Because they are effectively MIDI files, ring tones cannot have ISRC codes

How can I get ISRC codes for my recordings?

Each world "territory" has an appointed "local ISRC agency" which administers and assigns codes. You must contact the ISRC agency in your country to find out how they handle ISRC assigning. ISRC agencies for different countries can be found here ...

http://www.ifpi.org/isrc/isrc_agencies.html

Here are the agencies for US and UK ...

UNITED STATES OF AMERICA
RIAA (Recording Industry Association of America)
1330 Connecticut Avenue NW, Suite 300, Washington DC 20036
Tel: +1 202 775 0101, Fax: +1 202 775 7253
Web: www.riaa.com
Point of contact: Carlos Garza or Laura Coker
Email: isrc@riaa.com

UNITED KINGDOM
For videograms (video recordings)

VPL, 1 Upper James Street, London, W1F 9DE
Tel: +44 (0) 20 7534 1400 Fax: +44 (0) 20 7534 1414
Web: www.videoperformance.co.uk
Point of Contact: Ms Jane Samuels
Email: jane.samuels@videoperformance.co.uk

For phonograms (sound recordings)
PPL (Phonographic Performance Ltd)
1 Upper James Street, London W1R 3HG
Membership Help Desk Tel: +44 (0) 20 7534 1000
Web: www.ppluk.com
Point of Contact: Lette Webb
Email: isrc.info@ppluk.com

About PPL / ISRC in the UK

To register for an ISRC code in the UK you contact the ISRC agency representative (see above) at the PPL (Phonographic Performance Limited). The PPL is an organisation that can collect broadcast (radio, TV , live performance etc) royalties for both performers and record companies. Registering for an ISRC code and joining PPL is free. When you contact the ISRC agency member at PPL they will suggest you also join PPL, but you don't have too.

Read the information at the web site to decide for yourself. www.ppluk.com

CatCo

The PPL are also involved in setting up a digital database of music called CatCo. Here's what they say at the PPL website ...

CatCo is a PPL initiative to create a track level sound recording database - providing the "one stop drop" for all sound recording data requirements.

CatCo has replaced the Repertoire Registration Form (RRF) process by electronically uploading data onto the CatCo dataBase . This data is either fed automatically from Record Company's own label copy systems or alternatively uploaded using the CatCo application (available to all PPL members).

the CatCo dataBase is developed from the Record Industry Association of America's (RIAA) sound recording database, which has been enhanced to meet the requirements of the UK Record Industry.

The project appears to be at any early stage (the website certainly is!) but you can find out more by contacting CatCo staff at ... www.catcouk.com

How do I embed ISRC codes into digital files once I have them?

ISCR codes If you are using Red Book mastering software such as CD Architect, Roxio Jam or Emagic Waveburner you can enter ISRC codes into the relevant dialogue boxes once you have linked/imported your music files.

ID3 tags (for MP3 files)

ID3 tags allow extra information about the artist, copyright etc and ISRC codes to be encoded with an MP3 file. There's loads of software to help you do this. Do a web search for "ID3 tags" or "ID3 MP3" or suchlike.

Gracenote

Gracenote is an online music (CD and MP3 etc) database which matches information such as track and artist names to digital audio and music files. For example, when you insert a music CD into your computer drive, a Gracenote compatible application, such as iTunes, can retrieve data from the CD and then compared it to data held in the Gracenote database. If it finds a match, it can display the track and artist etc information. This system uses "multi step digital file recognition" technology to analyse ...

  • the unique digital audio waveform of a file (so called fingerprint technology)
  • TOC (table of contents)
  • CD text
  • ID tags
  • etc

If your application fails to find a match, it may give you the opportunity to submit the CD information to the Gracenote database. iTunes allows you to do this. Because iTunes is so successful it is important that your CDs are registered with Gracenote.

http://www.gracenote.com/

Why don't I just forget about digital fingerprinting?

You could just create MP3 files and post them on your website, or burn your own CD-Rs at home, or have CDs professional duplicated ... all without encoding any kind of "digital fingerprinting", but there are several disadvantages ...

  • You can't sell them on the iTunes Music Store (requires ISRC and Gracenote)
  • You can't sell them through Amazon (requires UPC - barcodes)
  • You won't be able to submit your track names to the Gracenote CD database (requires ISRC)
  • If anyone puts one of your CDs into a computer to transfer files into iTunes it won't be possible to retrieve track, CD and artist information from the Gracenote CD database
  • There will be no way for you to prove ownership and ensure your recordings are identifiable if they are pirated

4. Barcode your CD container and vinyl sleeves in such a way as they can be digitally identified and tracked

If you are selling physical product (CDs & vinyl) through a shop (either high street or internet based) you will need a UPC barcode so it can be tracked through their retail system. If you are planning to sell product mail order through your own site, you don't need it.

Before we discuss the details of the UPC system, it is worth mentioning that many mastering houses and distribution companies are members of UCC and can often generate barcodes for their clients. Furthermore, online distributors such as CDBaby (we love them!) offer a barcode as part of the deal. However, if you want to do it yourself, read on.

UPC (Universal Product Numbers) - barcodes

UPC is essentially a worldwide system of identifying products by way of a unique identifying code printed in the form of a barcode and displayed on the products packaging or cover. If you have mechanical product (eg CD, DVD etc) and you want to sell it in a traditional shop (Tower Records, Virgin etc) or online shop (eg Amazon) then you must supply it with a UPC barcode clearly visible on the packaging.

A UPC code has 12 digits. The first six digits (1-6) identify the company. The next five digits (7-11) identify a specific product. The combination of these eleven digits plus a one-digit "check character" form the 12-digit UPC that uniquely identifies one and only one item.

How do I get a UPC code?

UPC barcodes are administered jointly by EAN International and UCC (Uniform Code Council).

This from the UCC website (http://www.uc-council.org) ...

In order for your company to print U.P.C. Bar Code Symbols, your company will need to become a member of the Uniform Code Council, Inc. (UCC). When you become a member, your company will be assigned an identification number for your company's use (company prefix). You will need this number to create your own U.P.C's.

Membership of UCC seems to involve an annual subscription fee of approx $100. In the US the UCC assigns barcodes directly. In other territories this is done by associate member organisations.

In the UK, the associate member organisation is E-Centre (www.e-centre.org.uk) which exists to facilitate membership of UCC and assignment of the barcode system.

When I emailed the UCC for clarification of the relationship between EAN, UCC and UPC this is what they replied ...

EAN International and The Uniform Code Council, a Member Organization of an expanded EAN International, are voluntary standards organizations charged by their respective boards with the co-management of the EAN.UCC System and the Global Standard Management Process (GSMP).  The EAN.UCC System standardizes bar codes, EDI transactions sets, XML schemas, and other supply chain solutions for more efficient business.  By administering the assignment of company prefixes and coordinating the accompanying standards, EAN International and the Uniform Code Council maintain the most robust item identification system in the world.

The UCC is the name of our organization (UNIFORM CODE COUNCIL) and we assign the first part of the number when companies want to identify their products with a UPC  (Universal Product Code.) The name Ean /UCC is a means of globally identifying all the member organizations in the world.  The UCC helps members in the US  and we have member organizations in the other countries, the e-centre is the member organization in the United Kingdom  www.e-centre.org.uk 

How do I actually get a UPC Bar Code printed?

This from their website ...

You have three different approaches to getting your bar code printed:

  1. Contact a printing company who prints U.P.C. Bar Code labels, which can then be applied to your product.
  2. Have a U.P.C. Bar Code printed directly on the package of your product.
  3. Print U.P.C. Bar Code labels yourself using off-the-shelf software.

5. Encode your digital music files in appropriate formats for digital download

If you are planning to sell your files as digital downloads there are 2 primary options to consider ...

  1. Encode MP3 files that customers can either download from your website, or an affiliated service (such as PayLoadz), once you've been paid. (More on this later). You can decide upon the encoding quality. Click here for technical advice on encoding files.
  2. Encode them according to the guidelines of the online shop/distributor through which you will be selling. For example, iTunes Music Store actually has an application you can use to prepare files in the ACC format which they use. Some services will encode files for you some won't. (More on this later).

6. Duplicate (produce physical, or "mechanical", CDs and vinyl records)

You're either going to burn short CDR runs at home, or have CDs and/or vinyl professionally duplicated at a pressing plant (economical for quantities over 1000 units). Beware, some online retailers will not accept CD-R stock (including Amazon). There are numerous duplication services with online presences. Use Google to find them.

7. Distribution / retail / sell / download

There are 3 basic approaches you can take ...

  1. Sell your physical product (CDs and vinyl) and digital downloads from your own website
  2. Sell your physical product (CDs and vinyl) and digital downloads through an online distributor, shop or subscription service.
  3. Sell your physical product (CDs and vinyl) and digital downloads through an online distributor, shop or subscription service AND from your own website.

1. Selling physical product (CD &vinyl) & digital downloads from your own website

There are a number of obstacles you must overcome in order to do this ...

Debit and credit card transactions (merchant ecommerce)

Forget about cheques and money orders, you will need secure credit card transactions facilities capable of accepting money in all currencies. Be aware that every transaction will incur a charge from the merchant bank system.

Debit cards In the UK, debit cards such as Switch and Maestro cost the merchant (that's you!) 35p per transaction. OK if you're selling a car but a hefty chunk of profit on a 79p digital download.

Credit cards In the UK, credit cards such as Visa cost the merchant (that's you again!) approx 2-3% per transaction and 2% of gross turnover at year end.

For more precise figures and local variations you need to read the small print of any agreement you enter into. Are you beginning to understand why the banks make such astronomical profits?!!!!

E-commerce merchant shopping cart system on your website

Option 1 If you are adept at web site programming and back-end development (ASP, PHP, CGI etc) you could build your own merchant e-commerce transaction, inventory and order tracking system, but for most of us this is far too difficult.

Option 2 Pay for a web hosting package that includes merchant e-commerce transaction facilities. You'll pay for your web space and a monthly e-commerce fee (in addition to the merchant fees for credit & debit cards already discussed). Click here for an example service.

Option 3 Add the merchant e-commerce transaction facilities of a 3rd party secure online payment service to your site. They will of course charge you a transaction fee that covers the merchant fees they will incur plus their profit on top. Try these links ...

www.checkout.google.com

www.paypal.com

www.payloadz.com (download merchant e-commerce transaction service)

www.nochex.com

www.bitpass.com

www.paypoint.net

www.rbsworldpay.com

Retail from your website

 

Advantages Disadvantages
CD & vinyl

You don't need UPC - barcodes.

Money comes directly to you.

Customers might not trust your merchant e-commerce transaction facilities.

Customers might not want to use PayPal or NoChex etc.

You will need to offer some way for customers to track their orders.

You'll have to pack and post your own CDs.

Dealing with returns is a pain.

Downloads

Money comes directly to you.

If you use a service like PayLoadz, distribution and order tracking is handled for you.

Customers might not trust your merchant e-commerce transaction facilities.

Customers might not want to use PayPal or NoChex etc.

Small single debit card transactions could wipe out your profit.

If you don't use a service like PayLoadz you will need to email files to customers or build a secure way for them to download the files they've paid for.

You will need to offer some way for customers to track their orders.

 

2. Sell your physical product (CDs and vinyl) and digital downloads through an online distributor, shop or subscription service.

There are now many services of this type, here are a couple of better known ones ...

CD retail from Amazon

You will need duplicated "mechanical" product (CDs, DVDs), shrink wrapped and displaying a UPC barcode . www.amazon.com/advantage allows independent labels to sell their CDs through the US (.com) site, but the uk site (.co.uk) only allows books (as of Aug 2005). Amazon handles the transactions and you get paid directly into your bank account. This is changing as Amazon seek to compete with iTunes and new initiatives such as Amazon Artist Direct are in the pipeline.

CD retail from CD Baby

CD Baby started as an online shop specialising in selling CDs by independent musicians. You pay a one-off joining fee of $35, and send them some CDs. You can send home burn CD-Rs as long as presentation is good. You DON'T need a UPC code and CD baby takes 9% of the retail price which you set. CD Baby handles the transactions and you get paid directly into your bank account.

CD Baby also functions as a distributor, getting your CDs to online CD retailers. Your CDs must have a barcode (CDBaby can supply one) and must be pressed (not CD-R). Go to www.cdbaby.net

Download retail from iTunes Music Store

iTunes Music Store is at last making direct partnership agreements with independent music makers. There appear to be 2 ways in which this works ...

  1. Partnerships with independent music labels. We're not sure what the criteria is but it seems you need to be a limited company
  2. Partnerships with unsigned independent artists via a number of approved "digital service providers" such as Artists Without A Label and CD Baby.

iTunes Music Store has 5 compelling advantages ...

  1. It is the market leader.
  2. It uses the AAC format (rather than MP3) which employs "FairPlay" technology to prevent piracy.
  3. You can create links directly from you site to your tracks on the iTunes Music Store.
  4. It looks as though Apple has negotiated favourable merchant rates for debit/credit card transactions so you're profit on small purchases won't be wiped out.
  5. If you are a label, they pay direct into your bank account.

You will need to complete an online application at Apple's iTunes Labels & marketing website ... http://www.apple.com/itunes/music marketing/

If Apple accept you for iTunes, they will provide you with the necessary software to encode your tracks and this may involve adding ISRC or ID3 codes. We don't know for sure because Apple refused Planet Of Tunes' application.

Download retail through CD Baby

In addition to selling your CDs, CD Baby will act as your digital distributor. All members can automatically have their CDs submitted to a wide range of download music stores including Apple iTunes, Rhapsody, Sony Connect, the new Napster, AOL's Music Net, BuyMusic, Emusic, MusicMatch, and more. CD Baby handles the transactions, takes a cut and you get paid directly into your bank account.

Digital distributors

There are a few "big" names out there but we don't know anyone who's made much money from them (but then none of our friends are famous!). Try these ...

awal.com

ingrooves.com

theorchard.com

Other download retailers

There are many new business models being attempted at present including we7.com who place ads at the beginning of MP3s, and on demand publishing sites such as Amazons createspace.com. But listen, no-one but Apple is making any money yet. We think that what Microsoft and most of the industry still don't understand, but Apple does, is that it is the consumer experience that makes people buy MP3s, not price. If you don't understand why iPod and iPhone users are paying for MP3, you may miss out.

Download from subscription services

Subscription service work by getting customers to pay a monthly fee for a limited, or sometimes unlimited number of downloads from their catalogues. This business model has proved comparatively unsuccessful in comparison to iTunes but services such as www.napster.com are still there, but for how much longer?

3. Sell your physical product (CDs and vinyl) and digital downloads through an online distributor, shop or subscription service AND from your own website.

You know how to do this now, just ensure any deals you make with distributors and online retailers are non-exclusive.

8. Market and promote

This guide on "Digital Marketing Essentials for Recording Musicians" from our sister site, Project Studio Handbook, is an essential read.

You will find an artcile detailing all the processes I undertook to sell my 2010 LP Songs Sung here.

9. Get paid

I think we've covered this.

10. Safeguard your copyrights

Tricky! OK,

  • Use iTunes Store/AAC
  • Encode your MP3s with ID3 and ISRC codes
  • Use ISRC codes
  • Register your copyrights with an agency
  • Sign a publishing deal with a worldwide publisher who will defend the copyrights on your behalf
  • Buy a baseball bat and a long haul jet (you know they love piracy in China right?).

Good luck! More about safeguarding your copyrights here.

Final thoughts

Have you considered giving away MP3 downloads but charging for extended "physical" CD versions with nice packaging and booklets? Or giving away a free CD with every gig ticket sold?