CD Baby has mostly exited the physical distribution business: “Going forward, we won’t have a warehouse, we won’t stock CDs, we’re no longer doing mail orders and that sort of thing,” says Scott Williams, president of CD Baby.
“We don’t take a decision like this lightly,” he adds. “But it’s just not as not as relevant for us and not as valuable to the artists that we serve. And so it’s time has come.”
That said, CD Baby isn’t exiting the physical business completely: Artists can still get CDs and vinyl manufactured through the company, CD Baby just won’t warehouse them. “We will still sell them, but those will be shipped to the artists that have purchased them,” Williams explains. “They can use Bandcamp; they can set up their own Shopify site. We have a lot of overlap today with Bandcamp — a lot of people that use us for digital distribution prefer to do their own physical distribution through Bandcamp, and they can still do that.”
CD Baby was founded roughly 25 years ago to sell compact discs for independent artists. (Downtown Music acquired CD Baby’s owner in 2019.) But CD sales started to decline in the 2000s, falling for 17 years straight until experiencing a small uptick in 2021. Sales of vinyl, the other primary physical music product, have traced the opposite path, recently celebrating their 17th consecutive year of growth.
In the first 10 weeks of 2023, CD sales ran slightly ahead of 2022 — 6.8 million in 2022 to 6.9 million, according to Luminate. CD prices are more affordable than vinyl, which often pushes past $30, executives say, and there are fewer production delays. Stars often sell them as a collectible item, and for touring acts, CDs are easier to take on the road to sell at shows.
Some distributors have seen the growth of the vinyl market as an opportunity to get into the physical distribution side of the business. Symphonic Distribution announced that it was adding physical distribution capabilities in partnership with AMPED in 2020. Pieter van Rijn, CEO of FUGA, told Billboard last year he was excited about the company’s recent entry into the physical distribution space. (Downtown also owns FUGA.)
But Williams says the CD has “fade[d] in relevance” for many of CD Baby’s acts. “Operating the fulfillment side of it isn’t going to 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.”
