One of the most animated conversations that comes up in my Your Music (Band) As A Business class is whether or not doing a big manufacturing run of CDs is a good idea. Back in the day it was a necessity but in today’s independent music scene it is not the most sound strategy unless you are playing enough shows in front of enough fans to make it a wise business move.
If you do a manufacturing run of 1,000 discs the unit price can come out to somewhere between $3 (if you are extremely lucky) up to $6 or $7, depending on the options for the run. Graphics, multi-panel inserts, jewel case liners, digipack features all add to the cost per unit.
Musicians often don’t also include the actual cost of recording, mixing and mastering the music in the overall cost per unit. If you spent $3,000 on recording, $1,000 or more on mastering the disc and then spend $2,000 to $3,000 on the manufacturing run itself one does not need to be an accountant to realize you have to sell a disc at your show for $15 to $20 just to have a decent profit margin. In a tough global economy that is a lot of coin to ask your fans to shell out for a dying medium (that is a topic for another day!)
Add in the costs of hiring a graphic artist for the artwork, maybe a layout artist, or any other number of incurred expenses and the CD run is quickly becoming a gigantic expense, like $6500 or something! Yikes! Unless you are really playing a lot of shows and moving a ton of units this is a prohibitive cost for most musicians.
Add that to the fact that way more people are downloading music online instead of buying CDs. There aren’t many brick and mortar record stores left.
This leaves us with fewer and fewer places to sell our discs, a fan base that has embraced the MP3 as the main music medium and dwindling prospects to move the merch. And don’t forget the boxes of unsold discs in the attic! (I still have a bunch of those myself!)
So, what are we Indies supposed to do?
I recommend doing short runs of CDs these days, maybe 100 or so at a time. Short runs are burned instead of replicated. The process is quite different. I won’t go into the details here but the setup cost to do a replication run is quite costly.
Here are a few reasons why short runs are a good idea.
One, you don't have to pay thousands to manufacture. A short run of 100 will run a couple of hundred bucks. Usually you won’t get a fancy package but your fans are just going to rip the discs for their iPods anyway.
Two, offering download cards is really becoming a popular and cost-effective alternative to carrying a lot of inventory. Download cards from CD Baby cost about 50 cents each and you can sell them way cheaper than CDs (because the overhead is next to nothing compared with a full manufacturing run).
If you sell a download card for $7 or $8 you make a profit of $6.50 to $7.50 per unit sale. Even if you get 1000 of the things it still will only cost you $500 as opposed to, what, $5,000?
Three, there is way less plastic in the landfills from the discs, jewel cases, etc.
Just as with any small business, professional musicians need to really pay attention to the bottom line. I had a graphics client once who manufactured 1,000 CDs based more on old perceptions of the industry as well as the feeling of having 1,000 CDs. They thought it was cool to have that kind of inventory. The band lost a lot of money.
If you do a manufacturing run of 1,000 discs the unit price can come out to somewhere between $3 (if you are extremely lucky) up to $6 or $7, depending on the options for the run. Graphics, multi-panel inserts, jewel case liners, digipack features all add to the cost per unit.
Musicians often don’t also include the actual cost of recording, mixing and mastering the music in the overall cost per unit. If you spent $3,000 on recording, $1,000 or more on mastering the disc and then spend $2,000 to $3,000 on the manufacturing run itself one does not need to be an accountant to realize you have to sell a disc at your show for $15 to $20 just to have a decent profit margin. In a tough global economy that is a lot of coin to ask your fans to shell out for a dying medium (that is a topic for another day!)
Add in the costs of hiring a graphic artist for the artwork, maybe a layout artist, or any other number of incurred expenses and the CD run is quickly becoming a gigantic expense, like $6500 or something! Yikes! Unless you are really playing a lot of shows and moving a ton of units this is a prohibitive cost for most musicians.
Add that to the fact that way more people are downloading music online instead of buying CDs. There aren’t many brick and mortar record stores left.
This leaves us with fewer and fewer places to sell our discs, a fan base that has embraced the MP3 as the main music medium and dwindling prospects to move the merch. And don’t forget the boxes of unsold discs in the attic! (I still have a bunch of those myself!)
So, what are we Indies supposed to do?
I recommend doing short runs of CDs these days, maybe 100 or so at a time. Short runs are burned instead of replicated. The process is quite different. I won’t go into the details here but the setup cost to do a replication run is quite costly.
Here are a few reasons why short runs are a good idea.
One, you don't have to pay thousands to manufacture. A short run of 100 will run a couple of hundred bucks. Usually you won’t get a fancy package but your fans are just going to rip the discs for their iPods anyway.
Two, offering download cards is really becoming a popular and cost-effective alternative to carrying a lot of inventory. Download cards from CD Baby cost about 50 cents each and you can sell them way cheaper than CDs (because the overhead is next to nothing compared with a full manufacturing run).
If you sell a download card for $7 or $8 you make a profit of $6.50 to $7.50 per unit sale. Even if you get 1000 of the things it still will only cost you $500 as opposed to, what, $5,000?
Three, there is way less plastic in the landfills from the discs, jewel cases, etc.
Just as with any small business, professional musicians need to really pay attention to the bottom line. I had a graphics client once who manufactured 1,000 CDs based more on old perceptions of the industry as well as the feeling of having 1,000 CDs. They thought it was cool to have that kind of inventory. The band lost a lot of money.
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