Fatdrop Digital Download Store Comparison

The following article is taken from the FatDrop blog at http://blog.fatdrop.co.uk/, and is a comparison of the major digital download stores in the marketplace today.

As the smoky, noisy and frequently unfriendly record shops we all love become a thing of the past, their digital download store counterparts thrive. There are more than 500 legitimate digital music stores worldwide, offering over 6 million tracks. Digital music sales now account for an estimated 15% of the global music market and this rapid growth may well continue. Labels looking to sell their music online need to formulate a digital sales strategy, and to help we’ve gathered this information on a variety of digital music stores, detailing what features, file formats, prices and percentages they offer.

We contacted a number of stores directly to obtain the information in this article and we’ll add to it as other stores get back to us. If you’re from a digital download store, a record label or are just interested please feel free to comment, discuss or contact us. So far we’ve collected information on:

* iTunes
* eMusic
* Junodownload
* 7digital
* BeatsDigital
* Trackitdown
* Xpressbeats
* Beatport

Before choosing which digital download store(s) to use here are a few important factors to consider;

* Some stores will work better for labels that have a specific musical style. For example, dance music stores often have a customer base of DJs and genre-enthusiasts and will subsequently sell higher quality file formats, like WAV, AIFF and 320 MP3, for slightly higher prices. Non genre-specific stores usually appeal to a broader audience of music consumers but the individual tracks tend to sell for less.

* Labels can benefit from the exposure and promotion some stores offer. For example sites such as Junodownload and Beatport will actively promote labels that sell exclusively through them by featuring the label and tracks on the front page and in mailouts. Clearly, selling exclusively is restrictive and it means your digital sales are dependent on the success of one store.

* Using an aggregator (a form of digital music distributor) can help a label reach more stores and therefore a wider audience plus the aggregator will do the legwork for you like converting and distributing the files and brokering deals. In return however, they will charge either a fee or a sales percentage. Some stores prefer submissions via an aggregator as they have existing working relationships with these companies. An aggregator may insist on a label meeting specific criteria before using its services so it’s worth investigating first.

* Submitting music directly can be cheaper and can be good for building links with specific stores. Deciding for yourself which stores to use means that a label can opt for exclusivity if they want. Labels may still be checked for suitability first and, in the case of Beatport, they may be required to meet a quarterly sales target of $300 (gross) in order to continue trading.

So What’s The Deal?

To make things a bit easier here’s an overview of the featured stores, with a table of data below.

iTunes

The big boys in digital downloads with a huge 70% market share, but despite being market leaders and stocking over six million tracks the store is reportedly run as a loss leader to sell iPods and other Apple music hardware. Single tracks retail for a flat rate of 79p ($0.99), regardless of the track’s age or popularity. According to Andy Hargreaves “For each $0.99 song, Apple pays…$0.60 to $0.65 to independent labels.” iTunes uses the AAC file format exclusively for all downloads, with DRM on all content except iTunes Plus tracks. Apple don’t demand exclusivity from labels and direct applications to sell via iTunes will be screened and assessed. Labels that meet their criteria will have access to various marketing tools to promote their music such as logos, a link maker and Tell-a-Friend, a viral email marketing tool.
eMusic

Reportedly 2nd in sales only to iTunes, eMusic are the web’s largest retailer of independent music, with no major labels onboard. They focus on customers aged 25+ and operate a subscription-based pricing model, meaning users pay a monthly fee but individual tracks then retail for very low prices (30p or less) and sometimes for free. According to some sources, “Net income is…split 50-60% with the labels depending on the individual deal.” When new users sign up they’re treated to 50 free downloads, plus more if they refer friends. We don’t yet know if labels get paid for these give-aways, so if you work with eMusic we’d love to hear from you.

Juno Download

The digital counterpart to the physical music store Juno, which has been trading for over 10 years and can provide a useful outlet if your label also offers vinyl or CDs as well as digital music. Juno Download will screen prospective labels for quality and relevance to the site before adding them to their large catalogue of dance music. Labels can upload tracks directly, send a CD/DVD or, remarkably, Juno Download will even ship them a hard drive, plus they offer labels a dedicated account manager to assist with all technical and business issues. Once on board, labels can choose the download format and price of tracks (including for free) and can make use of the new animated banner links to embed into websites, social media pages and emails. Although Juno Download don’t demand exclusivity, labels that opt for it can benefit from their tracks being featured and promoted heavily on the front page.

7digital

Packing 3.5 million tracks that span the musical spectrum, 7digital have a huge catalogue but fewer users than some other stores. They offer a wide variety of download formats and tracks do start from just 50p, but the majority retail for a little more. 7digital also operate Indiestore – a shop designed specifically for independent labels and unsigned artists to sell their music. Indiestore allows artists and labels to set their own pricing, gives them access to real time sales stats and is non-exclusive. Another strong selling point is that 7digital are now the official retail partner for personalised music provider Last.fm, meaning people using the last.fm site can buy tracks from 7digital where available. This is excellent exposure for a label and a good opportunity to tap into new markets, plus their 7digital player can be embedded into your label’s web pages and emails for extra visibility. Label/artist revenue splits vary so it’s worth seeing if you can cut a deal.

BeatsDigital

The concept behind the store is to provide a sales platform for any independent label or unsigned artist, and to allow end users access to otherwise unavailable tracks. Because of this labels are not screened and their involvement with the store remains non-exclusive. Beatsdigital pride themselves on their GUI. Simple interfaces and wizards allow easy uploading, managing and monitoring of releases as well as the creation of sub-labels, biogs and albums. Labels can set their own prices and add their own artwork, release date and information. Beatsdigital are currently working on a system that will promote tracks that sell well or get strong feedback – good for pushing the quality up. As they operate an anybody-can-upload policy they’re transparent with the label-store split, with 60% net revenue of each track going to the label and no hosting charge. For extra promotion labels can use the Beatsdigital banner logos for their sites or embed the Beatsplayer, allowing people to stream and buy a label’s releases through the store.

Trackitdown

Trackitdown have a good amount of dance music tracks available with house and trance being the main draw for the 100,000 users. Not the cheapest tracks to buy but then Trackitdown don’t offer anything less than 320k MP3 and WAV formats, a nod to the fact that their target market is mostly DJs and dance music enthusiasts. Trackitdown use digital watermarking in their tracks at the point of sale. This has no audible effect on the music and means Trackitdown can identify the original recipient if the file is found somewhere online it shouldn’t be. 50% net receipts of each track sold go to the label, plus Trackitdown offer a set return fee option so labels don’t lose out if tracks get discounted. Labels can grab a Trackitdown player to embed into their sites, including Facebook, plus they can make use of the HTML stickers; custom-made images complete with a mini music player.

Xpressbeats

Xpressbeats is a digital music store from the people who run CD Pool – a DJ promo service. This means that users can occasionally buy promo tracks, making it a useful store for DJs and people looking for pre-release music. Despite being available at competitive retail prices there aren’t a huge number of tracks available and most fall under the house music banner. MP3 is the only format offered, with no WAV option, which means faster downloads but this restriction may alienate a few DJs/enthusiasts. Clickgroove, a store operated by the same company, specialises in ‘broken beat, future boogie, deep & soulful house’ etc. so a good bet if your musical output falls under these banners. Layout, terms, conditions and pricing are much the same as Xpressbeats, as are their other sites DJ Magazine and Gaydar Radio Jukebox. Xpressbeats do screen labels, asking that they be proactive in their promotion, which is good for quality control and something to consider when applying as a label.

Beatport

Beatport has a strong reputation for selling dance/electronic music and has the backing of some heavyweight labels, DJs and even a partner in music software company Native Instruments. It sells single tracks in MP3, MP4 and WAV file formats for prices ranging roughly from £1.29 – £1.99. Beatport has been quite controversial recently with its decision to impose quarterly sales targets on labels ($300 gross) with potential removal from the site for failing. Some have argued this is a necessary filter for the expanding digital label market and the fact that Beatport aren’t currently accepting new labels suggests they’re looking to streamline their catalogue. Beatport do offer labels exclusivity deals and some have already pledged full allegiance to the site. We’ve left Beatport out of the table below for now until we have the full facts and figures, so if you’re from Beatport please get in touch!

The Facts & Figures

— Roland – http://blog.fatdrop.co.uk/

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