The Real Value of CDs
Why digital downloads can’t replace CDs quite yet
In order for a solo recording artist to make the minimum wage of $1,160 per month you could:
- sell 145 self-pressed CDs or
- sell 1,284 track downloads on iTunes or
- have 232,000 songs streamed on Spotify per month
If your band has 4 members, for each of you to make minimum wage, you would have to:
- sell 580 self-pressed CDs or
- sell 5,136 track downloads on iTunes or
- have 928,000 songs streamed on Spotify per month
To calculate these numbers we set the sale price for a CD at your gig to be $10. Averaged your cost of it to be $2 (it is less when you order bigger quantities) which makes your profit $8 per CD.
iTunes takes 30% of the $1.29, which leaves $.90 for the artist. That’s not taking into account that your distributor, like Tunecore for instance, charges you an annual fee.
Getting accurate numbers from Spotify is not easy since it seems to vary depending on number of total streams. Spotify claims they pay 70% of revenues to artists. So that 70% is then divided by number of plays and then that number is multiplied by however many plays your track got. On average it comes out to be about $0.005 per stream, which is a lot better than if was a couple of years ago, but still pretty gloomy.
Another interesting fact is the numbers just released by RIAA comparing CD sales to all digital sales since 2004 (when they started tracking digital sales.) It clearly shows that CDs are still the best selling format for music.
(Graph courtesy of Digital Music News)
Don't get discouraged!
For some of us, even the thought of selling 145 CDs a month might seem overwhelming, not to mention having 232,000 people streaming your song on Spotify.
Since the profit margin is clearly best with CDs, let's think of a few ways to move some of those CDs off the shelf (or your merch table).
The easiest way for an unsigned band to sell CDs is definitely at shows. People just saw your show, loved it and are ready for that impulse purchase. To find out more about how to sell more merch at shows, please read this article: How to make money at gigs!
But keep in mind that there are other means of making money with your music as well. Be creative when considering venues. Not only rock clubs have music. Bars, coffeehouses, restaurants, churches, schools, stores, corporate events, house concerts are all potential outlets for your music. Get a residence gig at an established venue in town. Some will pay you a set fee, some will give you a percentage of the door and some might not pay you at all, but allow you to sell your CDs and merch.
Seek out promotional opportunities. Call local radio stations to coincide with your upcoming gig. Utilize social media to promote your shows, your CDs, your new stickers, etc. Share pictures from your rehearsals, your load ins, anything. Blog frequently about your life, the new song you just wrote, rehearsals, ups and downs. People want to know the people behind the music they listen to.
Produce more content. Post videos to YouTube frequently. Release live recordings of your songs. License your music to TV shows and commercials. (More about that in a later blog post.)
If you want to make music your living, consider it your job and get to work! :)