This just in from the Seattle Times:
Amazon.com subsidiary CustomFlix is expected today to unveil a CD On Demand service that enables musicians and smaller record labels to sell their music online, without holding physical inventory.
The CustomFlix service manufactures and ships CDs each time a customer places an order, erasing the financial risk associated with manufacturing DVDs and holding inventory that might not sell quickly, if at all. CustomFlix introduced a DVD manufacturing service in April that would allow film studios and TV networks to sell obscure or niche titles.
Musicians and record labels pay a $50 flat fee to use the service, plus $4.95 to $7.95 per CD, depending on the volume of orders.
What exactly is going to happen here? A $50 setup fee is way too good to be true. Way. Either the quality of the manufacturing and printing will be such that one will be able to “tell,” or Amazon’s about to unleash something as influential as CD Baby. Can’t wait to find out.
If you figure it the worst way, that Amazon takes $7.95 per CD, all you have to do is charge $15 oer CD and you’ll be making the same profit as you would with a distribution deal – and that’s if the orders are in small volumes. If the orders are in larger volumes, it looks like you’re way better off. Of course you’ll have to sell off of the Amazon website, I assume.
But like I said, I wonder what they look like. And also, what a funny thought, that you’d have to buy your own promos off of Amazon.com. Seems strange. But you also are paying yourself a profit that way.