Here's how it seems to work:
You can download their PDF and probably get a better understanding than I have, but I believe the simple version is this:
1. You send Rain Dog your album on CD and pay them $90. ($65, plus I believe $25 to get a UPC code. They have other services too, if you want to pay up to $80 more--like extra promotion on Oasis's "Indie Music Channel" site of whichever track you think is your best.)
2. They encode the tracks for you as copyright-protected AAC, with your name, album name, etc. embedded in the tags.
3. They upload the songs to the iTunes Music Store, complete with cover art and free 30-second previews of all tracks. Your music is then available and will come up in searches just the same as U2 or any big-name artist. (Audience is limited to Mac owners now, but the store still sells half a million songs per week, and is coming to a wider audience this year: first Windows and Canadian users, and then worldwide when the legalities can be worked out.) Apple has told independent labels like Rain Dog that the "big labels" will NOT get special treatment or extra say in who gets promoted in iTunes. If your music catches on, it has the chance to be noticed. People can buy your whole album for $9.99 (possibly more for longer albums?), or just the songs they want for .99 each. They can burn your CD, put your music on their iPod... the usual.
4. Apple gives Rain Dog about 65% of the iTunes price every time someone downloads your music. That's the same cut the big-name labels get. (The other 35% goes to Apple and the credit card companies, pays for the servers, etc.) Promote your music however you want--tell everyone to look for it at the iMS. Rain Dog does their own promotion too, of course--they want their artists to sell!
5. Rain Dog gives you about $4.55 for every album downloaded (or more: you get 70% of their cut). About 46 cents per individual song purchased.
6. Once a quarter, they send you your profits, minus a $9 quarterly fee. If you don't make any money in a quarter, the $9 charge is delayed to the next quarter. If you never sell anything, it sounds like you never have to pay the $9--unless you want to stay with Rain Dog anyway. Still, that's just $36 per year.
7. After one year, you must pay an annual renewal fee of $65 if you want your album to stay online.
8. They'll sell your physical CDs too, IF Rain Dog's parent label, Oasis CD, enters into an agreement with you. Your online sales renewal fee would then be waived.
Feel free to correct me on the details--I skimmed. It sounds pretty well thought-out though, with minimal financial outlay by you as the artist, and a generous share of any profits for you. They have ALL the paperwork packaged in one PDF, right down to your IRS W-9 form. There seems to be some tie-in to Audible, too? Rain dog will also submit your info to CDDB--but you can do that for free yourself, I thought--right from iTunes, even.
It will be interesting to see how this develops. The big labels will probably not be pleased at all! But they still have big promotion/advertising power on their side.
This also sounds like a way for iTunes' "also bought" cross-promotion database to shine. You've probably noticed, when you browse the online store, in the top-right is a list of OTHER music that people like who are interested in the same music you are. Your music can end up in lists like that for people to find and explore even if they weren't looking for you at all!
