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Launched in 1998 and housed in Sivers' home during its infancy, Portland, Ore.-based CD Baby became a popular sales conduit for unsigned artists, who received $6 to $12 for each CD sold via the service. Artists keep $1 to $2 per unit in most record deals. Seven years ago, the vendor struck a partnership with Disc Makers, which has manufactured vinyl records, cassettes and CDs in the Philadelphia area since 1947; the deal gave Disc Makers' CD reproduction customers an avenue to sell their music online. Disc Makers president Tony Van Veen tells me he began suggesting to Sivers that should he ever desire to sell his startup, Disc Makers would be interested. Discussions began in earnest last year, Van Veen says. The deal also includes CD Baby's online storefront and Web hosting service, HostBaby. Disc Makers already operates DigStation, a downloadable music store serving independent artists that was launched about 18 months ago. Van Veen characterized it as relatively small, with 150,000 tracks compared to CD Baby's catalog, which includes more than 2 million songs. In addition to direct-to-consumer sales, CD Baby also supplies digital content to music retailers such as Apple Inc.'s [AAPL] iTunes, Amazon.com Inc.'s [AMZN] DRM-free store, and subscription services Napster Inc. [NAPS] and RealNetworks' Rhapsody [RNWK]. Interestingly, while Van Veen says growth on the digital side has been rapid, physical CD sales haven't slumped among the independent and unsigned artists to which CD Baby and Disc Makers cater. "For independent artists with fewer distribution channels, much more of their sales come from CD sales," he says. Terms of the deal were not disclosed, although Van Veen confirms that the acquisition has closed. The CD Baby brand name will remain, and the company will continue to operate with relative autonomy. CD Baby never took money from outside investors, and was "100% owned by Derek Sivers," according to Van Veen. - Paul Bonanos Comments
From: Daniel James,
As an artist, I have used Discmakers since '93, before I had heard of CD Baby. When I first heard that Derek had sold, I was disappointed, as he has done an excellent job with CD Baby & Hostbaby, helping to fulfill long-sought-after dreams of many independent artists, who prior to CD Baby's founding had seemingly unsurmountable options available to get their music out to the public. My main concern was that CD Baby may no longer be as diligent in marketing the artists' music as before. But I'm sure it was not an easy decision for Derek to make, and as someone who has invested so much work into CD Baby, I don't think he would hand over the reigns to Discmakers without believing they would be able to manage it just as good or better. If Discmakers puts as much effort into CD Baby as they do their CD manufacturing business, it will continue to prosper. I'm grateful for all the hard work Derek has put into CD Baby, from its founding to present, and I'm looking forward to working with Discmakers in both arenas.
Posted on:
August 23, 2008 11:51 AM
From: Paul Bonanos,
It's great to hear from musicians who have used CDBaby's services, and I'm glad to hear he's provided a good experience for artists like you, Daniel. Thanks for your remarks. Here's a great post-deal interview with Derek, in which he sheds a little light on his upcoming Muckwork project. Disc Makers just introduced some new services for artists who are leaving labels and want to go independent as well. Cheers--
Posted on:
August 26, 2008 11:15 AM
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Compact disc duplicator 
And thus the meek inherited the Earth..