No up-front costs to sell music on Audiolife

Update, Thursday 1/30: Today, I received a followup e-mail from Audiolife CEO and co-founder Brandon Hance. Audiolife has changed its cut on digital album downloads from $3.50 to $3.00, and on digital singles from $0.35 to $0.30. The company has also posted a detailed price list, including prices for different configurations of t-shirts. I've modified the original post accordingly.

I stumbled across a new service on Wednesday that, at first glance, seems to trump CD Baby for selling CDs online.

Audiolife not only lets you create an online store to sell CDs and digital downloads, but it will actually manufacture the CDs for you, on-demand, as customers buy them. The up-front cost? Nothing. Zero dollars and zero cents.

This is a big deal. As any self-financed musician knows, CD manufacturing is a big investment. Print runs for CDs with a jewel case and nice color insert generally start at 1,000 for close to $1,000, though you can get away with spending a few hundred bucks for a short run, if you're willing to pay quite a bit more per disc. This is all well and good, if you sell all of the CDs you print. If not, you're left with some expensive drink coasters.

Instead of charging you up front, Audiolife takes $5.49 from the sale of each physical CD. That's slightly more than CD Baby, which charges a $35 one-time fee, plus $4 per CD sold. But, of course, CD Baby assumes that you've already paid to manufacture CDs.

Audiofile will also let you design and sell T-shirts (they keep at least $4.82 per shirt, depending on the type of shirt) with no minimum purchase, and create and sell ringtones either from MIDI files or samples of the actual song (they'll pass along 50 cents per download, but the phone company sets prices). The online store isn't a static Web site, but rather a widget that you can place on your band's home page, or on social-networking sites like MySpace, which is still a necessity for musicians (though it's been surpassed in total users by Facebook).

If you're only interested in digital distribution, Audiolife may not be the best deal. They take a cut of $3.00 of each album download and $0.30 of each single-song download sold through your online store, and don't distribute them to third-party stores like iTunes. In contrast, CD Baby lets you keep 91% of all revenues from downloads, minus its one-time up-front payment of $35 and any fees from third-party stores, and Tunecore takes no cut but forces you to pay an annual fee of $10 per song or $20 per album. Both of these services will redistribute your songs through major stores such as iTunes.

I've read through the Audiolife FAQ, and I can't find any obvious gotchas--artists retain the rights to their music, deals are nonexclusive with other distribution sites, and their bulk price list looks pretty competitive with Disc Makers, if you want to buy a bunch of CDs to sell at shows, give away in press kits, or send to radio stations.

With no up-front costs or exclusivity contracts, there's not much to lose--if you find out that Audiolife isn't serving you well, you're free to move on.