Indie labels bypass iTunes, give digital sales a shot

Bands have always sold CDs at concerts, and nearly every indie label has some sort of online storefront these days (see, for instance, Fall, Suicide Squeeze, and Rough Trade). What’s more recent is the trend toward offering digital distribution, often in fan-friendly formats like MP3 and FLAC. Reuters has a piece this weekend on three indie labels (Merge, Def Jux, and Sub Pop) that are examples of the trend, and it points out the obvious problem that such sites face: most music lovers will never visit a label-specific store.

But in the digital, long-tail era, such stores can succeed by targeting a niche fan base with exclusives, rarities, and out-of-print material. They can also cater to online buyers concerned about audio fidelity by offering lossless versions of tunes, something that the major stores don’t even make available.

I disagree with the Reuters report that says that music fans will not buy direct from a label through their web site. Just last week Trent Reznor made $1.6 million from Ghosts I-IV from his web site. Labels like Def Jux and Sub Pop have a large fan base and will be successful. The rise of lossless digital audio (i.e. FLAC) is a boon for consumers, offering identical quality as the CD with no digital rights management.

However, I think one potential issue is the cost of FLAC versus CD. The example in the article points to Our Ill Wills by Shout Out Louds. The CD is available for $13 while the FLAC is available for $11.49. The pricing on the FLAC version is a complete rip off. For only $1.50 more, you get the professionally pressed disc, which lasts longer than a burned CD, as well as artwork. I think Trent Reznor is more on target with his pricing. He charged $5 for the FLAC and $10 for the CD.

I agree that NIN is hitting closer to the mark with his pricing, but Trent is also offering up album art on his downloads to give a fuller experience for the listener. What needs to happen is bands release their own music for free on myspace or their own website and sell ads and sponsorships. You can’t fight the file sharers forever!