Todays Dump: How Bands You've Never Heard Of Are Making Money On iTunes

How is that possible?

A band you have never heard of -- AC/DC cover band AC/db -- made over $32,000 from music sales in November.

Under the elderly business model of music sales on physical media, it would not be. For a band to finish up with that much funds in its pockets after the distributor and record label had taken their cuts, its music would must have posted garish, unmissable sales numbers.

AC/db, on the other hand, had to do around $45,000 in sales at the iTunes store. After Apple took its 30 cents on the dollar, that left $32,000, of which the band's distributor -- TuneCore -- took nothing at all.

TuneCore is six of a few digital distributors that have turned the music business model on its head, treating distribution as a service. The company charges an up front fee to system recordings and upload them to music stores like iTunes -- which won't deal with individual artists. The band retains all rights to its music and keeps all the revenue past what the stores keep.

This model is obviously appealing to musicians. CEO Jeff Price says TuneCore, a startup with a mere $7 million in venture funding to date, distributes more music for sale than any company in the world -- and by a wide margin. In 2009, TuneCore processed and uploaded over a song per second; its iTunes sales were nice for $32 million after Apple took its cut.

That doesn't seem like a giant sum in the context of a $10 billion industry. But as most of TuneCore's customers are unsigned ("whatever that even means anymore," Price says), that is mostly going straight to musicians; in that context, $32 million is serious funds.

And it is not music -- TuneCore put a collection of Halloween-themed sound effects on iTunes, which sold for around $20,000 in November.

The barriers to entry are low -- TuneCore charges around $10 for a single, $40 for an album, much in line with its main competitor, ReverbNation -- so somebody can record anything and offer it to the masses on a whim. And if they happen to catch a viral wave, they can finish up making a decent living.