TuneCore goes live

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No company crystallizes the changing nature of the music business better than TuneCore, which launched today after about a year of beta testing. The company offers just one of the services provided by a record label -- it distributes its clients’ songs to online retailers like iTunes, Napster and eMusic, then manages the receipts -- but its business model is orders of magnitude more artist-friendly than the typical label’s. Rather than keeping most or all of the sales revenue, TuneCore charges artists one-time fees of 99 cents per song and 99 cents per retailer, plus $10 a year to store and monitor each album offered for sale. In effect, artists have to sell three albums to break even, after which the entire wholesale revenue stream is theirs to keep. With the customary major-label deal, most artists never collect any money from album sales.

IMHO, the significance of TuneCore isn’t that it helps artists distribute songs to iTunes and other online outlets independently. That’s been done. What’s interesting to me is the emergence of business-model competition in that segment. Independent distribution may make the most sense to artists with established followings, who have less need for a label’s marketing help than new ones do. But as alternatives like TuneCore multiply, more artists of all stripes will be tempted to take a D.I.Y. approach to their careers, pulling together inexpensive production and marketing resources to support their releases online. These alternatives also shine a spotlight on the high price that artists pay labels (particularly the ones owned by the major record companies) for distribution, which is the least valuable service they provide in the digital era.