Magnatune

Magnatune has significantly helped in the sale and distribution of hundreds of artists, whose music would otherwise be heard and purchased with far less frequency, by providing free sampling methods and genre specificity options. Added music consumption in this fashion, in conjunction with low distribution costs, allows for found sales and an effective revenue sharing regime between Magnatune and artists.

Operating since 2003, Magnatunes primary product is music. It’s revenue sources are music (both for personal and commercial uses), music licensing, and artist merchandise. Magnatune employs a Creative Commons licensing regime that allows for online distribution of music. It bypasses traditional distribution chains, avoiding expensive costs. This allows for music revenues to be shared evenly by Magnatune and artists.

The target audience is people who listen to music in the background while they do other work (i.e. office workers [or any traditional "radio" market])and fans of music that gets little radio airplay or major record distribution, but has a fairly large audience.

Magnatune provides for free:
-Radio stations of our very high-quality artists, tailored to each listener’s specific tastes.
-We make it easy to listen to our music, and what we play is on-genre and extremely high quality.
-A simple interface to save your favorite artists and songs; come back to them, build a collection.
-A wide variety of music that can be freely previewed and put on a ‘temp track” on a work-in-progress. If the music is then proven to work for your use, you can then pay to license it for advertising, films, business, etc.

What Magnatune sells:
-Downloadable albums at a low price: $5 to $18: buyer determines the exact price.
-Sub-licensed music for commercial purposes (i.e.: trade shows, advertising and web sites), priced from $150 to $5000, depending on length and type of use.
-Merchandise: posters, clothing, mugs with artist’s likeness.

How the artist makes money:
-50% of the sale price of each album goes directly to the artist.
-50% of any commercial sub-licensing (ads, web sites, trade shows, films, etc) goes directly to the artist.
-50% of merchandise profits goes directly to the artist.
-Wider distribution of the artist’s music means more gigs and more fans.

Magnatune has significantly helped in the sale and distribution of hundreds of artists, whose music would otherwise be heard and purchased with far less frequency, by providing free sampling methods and genre specificity options. Added music consumption in this fashion, in conjunction with low distribution costs, allows for found sales and an effective revenue sharing regime between Magnatune and artists.

The vast majority of mainstream music remains under the firm hold of the proprietary distribution chain, as represented by the Recording Industry Association of America. Therefore, sales via Magnatune and its artists are presently far lower than those of RIAA recording labels. As consumers increasingly demand greater access to music at lower costs, the hope is to sign highly circulated artists in order to broaden awareness and music market share.

The music industry is a tremendously large middleman that draws significant rents from both artists and consumers. Certainly, analogous situations exist in other industries (i.e. the movie industry), which create opportunities for similarly designed open businesses to operate at the benefit of both suppliers and demanders of content.

www.magnatune.com
Postal Address:
Magnatune,
2070 Allston Way,
Suite 102, Berkeley,
CA 94704 USA

Questions:
Is there a way to accelerate established artists switching from RIAA recording labels to open labels?

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