fair music weblog

Magnatune was founded in April 2003 by John Buckman and is located in Berkeley, California. Magnatune was born out of Buckman’s observations he’d gathered about the music industry, along with personal experiences from his wife releasing her CD on an Indie record label. In the end, she sold 1000 CDs, lost all rights to her music for 7 years (even though the CD had been out of print for many years), and earned a total of $137 in royalties paid (some of it paid to her as CD copies of her own CD which she then gave away for promotion).

The record label that signed her gave her a 70/30 split of the profits (of which there were few). The label got screwed at every turn: distributors refused to carry their CDs unless they spent thousands on useless print ads, record stores demanded graft in order to stock the albums, and in general, all forces colluded to prevent this small, progressive label from succeeding.

Buckman’s idea was: why not make a record label that has a clue? That helps artists get exposure, make at least as much money they would make with traditional labels, and help them get fans and concerts. Magnatune offers licensing for commercial use instantly and online. They license more music online than anyone else in the world.

They provide CD quality audio WAV files, as well as super-high quality VBR MP3s, AAC, and open source friendly FLAC and OGG formats, there is no DRM, and 50% of the purchase price goes directly to the musician. Contracts are signed directly with musicians, so no middlemen get in the way of the artist’s royalties.

In the days before the internet, decades ago, it cost a lot to get recorded music to the public. Studios and equipment had to be paid, LPs and later CDs had to be produced, shipped and displayed in a shop, advertising was expensive, and so on and so on. That means, an artist had to sign with a record label that could take care of all these costs upfront. The labels therefor paid the artists little, because they said they had to take the risk. But now, in the Internet-era, all this is changing. Magnatune, “the first real Internet-era record label”, as writer Kevin Maney called it in an article in USA Today, has a completely different business model - one that fits into the time of eBay and gives artists their fair share.

John Buckman, then CEO of the e-mail software company Lyris, aimed to create the next generation record label, which in the first place was not easy, as he writes in an article in Five Eight Magazine: “Frustratingly, I was faced with a multitude of legal questions. How could I legally allow visitors to listen to mp3 music on my web site? What would those visitors be allowed to do with that music? How could I take advantage of the “sharing” and word-of-mouth culture of the Internet to promote my business while still remaining legal?”

John Buckman found a solution. First, he put the music under a Creative Commons license which allows non-commercial use. Non-commercial use, such as the music appearing in a student film, serves as free advertising and creates enthusiasm for Magnatune, Buckman thought. When uses of music are non-commercial, no one is making money from it, and the likelihood of being able to squeeze money out of the users is pretty low. And since Magnatune also licenses its music for commercial use, students will later eventually get a good job and will then want to pay for the music because of earlier generosity. Nowadays Magnatune even encourages bloggers to use their music in a low-fi-version for free or pay a small amount of money for hifi-quality.

For the consumer Magnatune is quite simple: On the website they find a list of musicians the company has signed. They are not famous but there are interesting works of all genres to find. The user can click on an artist and can listen to their music for free by streaming it over the internet. If they want to download the album onto their computers hard drive and use it on their mp3-player or wherever they want for private purposes, they can pay 5$ or more for a whole album. The “suggested” price is 8$ and fascinating enough users on the average pay 8,93$, says Buckman. He is convinced that customers are willing to pay for music and even pay more than is necessary, because Magnatune gives artists half its revenue.

For commercial use licensing is nearly as simple: if you want to play Zilla’s album egg in a tv ad, use it for your company’s telephone on hold or for a Hollywood movie - you can easily click through the automated licensing process, get your contract immediately and go to the checkout. The internet-era is that simple.

Magnatune Website