CD Baby is mostly out of the physical distribution business: “Going forward, we won’t have a warehouse, we won’t be stocking CDs, we’re not doing mail order anymore and things like that,” he says. Scott WilliamsCD Baby Chairman.
“We do not take this kind of decision lightly,” he said. “But it’s not as relevant to us nor as valuable to the artists we serve. And so the time has come.
That said, CD Baby isn’t getting out of the physical business entirely: While artists can still get CDs and vinyl manufactured through the company, CD Baby won’t warehouse them. “We’ll still sell them, but they’ll be shipped to the artists who bought them,” explains Williams. “They can use Bandcamp; They can set up their own Shopify site. We have a lot of overlap with Bandcamp today – many people who use us for digital distribution prefer to do their own physical distribution through Bandcamp, and they can still do that.
CD Baby was founded about 25 years ago to sell compact discs for independent artists. (Downtown Music acquired CD Baby’s owner in 2019.) But CD sales began to decline in the 2000s, falling for 17 straight years until experiencing a small increase in 2021. Sales of vinyl, the other primary physical music product, have traced the opposite path. , recently celebrated its 17th consecutive year of growth.
In the first 10 weeks of 2023, CD sales are up slightly from 2022 — from 6.8 million to 6.9 million in 2022, according to Luminate. CD prices are more affordable than vinyl, often pushing past $30, and there are fewer production delays, executives say. Stars often sell them as a collectible item, and for touring acts, it is easier to take the CD on the road to sell at shows.
Some distributors see the growth of the vinyl market as an opportunity to get into the physical distribution side of the business. Symphonic Distribution announced that it is adding physical distribution capabilities in 2020 in partnership with AMPED. Peter van RijnFUGA CEO told Board Last year, he was upbeat about the company’s recent foray into the physical distribution space. (Downtown also owns FUGA.)
But Williams says the CD has “faded”[d] in relevance” to many of CD Baby’s acts. “Operating the fulfillment side of this will not be part of our core strategy going forward,” he continues. “I think we have better opportunities and things to focus on on the digital side.”
