Magnatune Interview

We sent out an interview to Magnatune recently to update the info that the OpenBusiness site provides…

1. We see that the buyers can choose how much they are paying for the CDs they select. On your site Kevin Maney describes that most people are choosing to pay more than the minimum for the music they download. Is this still the case?

Yes, on average people pay $8.20, and on the web site, you can see which albums generally get the highest prices (which probably measures some level of passion for the music)
http://magnatune.com/info/stats/highest_valued_this_month

2. The testimonial that you provide on the site speaks of quality service yet your slogan is “We are not Evil”. Do you think that your ethical approach to music distribution is of primary importance to the people who choose your site? How much of an influence does your stance have on your audience?

In the end, people buy the product, which is the music, because they want to listen to the music. The “not evil” part of the business lets them buy music in good conscience. Many people have written to us to say that they’d stopped buying music because they didn’t want to support the music business, much like how people stopped buying cosmetics from companies who tested them on animals. The Body Shop sells “no animal testing” cosmetics, which allows people to shop there knowing their helping what they perceive as an ethical business, just as with magnatune they pick music they like, knowing that they are supporting an ethical business.

3. You’ve had some really positive press coverage and I see that you can order recruiting cards for Magnatune through the site. Do you find this is an effective way of recruiting quality artists? What other methods do you use to contact artists who might be interested in releasing their work through you?

We’ve given out 10,000 recruiting cards in just 6 weeks, so I know that our fans want to tell others about Magnatune. We also actively try to get reviews in music magazines, which both increases sales, but makes us visible to other musicians. Everyone I know has a favorite local band who is amazing — great talent is all over, it’s just a matter of getting the word out, and showing that this is a viable business model.

4. What sort of marketing strategies do you use to reach your listening audience?

Encouraging people to help us, because Magnatune succeeding is part of the world they want to live in, is our main strategy. Journalists write about us because they personally want to support us — they have to convince their editors that a smallish online music company should be profiled in the major media, and they do so because they want to get the word out. The same goes with blogs and podcasts — there are concrete things we do to encourage that community, such as a the play-our-music-royalty-free-on-your-podcast license.

5. What pitfalls, if any, have you encountered because of your decision to provide free services and content?

There is some level of moochers, people who download the music with no intention of ever buying. That does eat bandwidth, which costs money, and over time moochers often overwhelm the good intentions of many sites. It’s the same thing with shoplifting: stores tolerate a certain amount of it, not resorting to body searches of their shop visitors, but at the same time an electronic theft detector is a reasonable compromise for a shop. The same applies to Magnatune: we try to strike a balance between letting the honest people proceed unimpeded, and slightly frustrating the moochers so that they go elsewhere. A recent example of this would be the 5 second “you just heard…” voices we’ve added to the music that’s freely heard on magnatune: it’s helpful to know what was played, but it also means the music isn’t a good substitute for paid, dj-free music.

6. Do you have any advice for entrepreneurs who are entering the open business market?

The general business model that seems to work well, is to encourage no cost, and widespread commercial use, and charge a modest, stated-up-front fee for commercial uses. That gets you distribution, mass market interest, and has you taking money from people making money, which is the best case.

Something that I find interesting here is that people are still choosing to pay more for the music they purchase then the bare minumum. Is this a reflection of the kinds of people who are using open businesses generally or is it specific to the Magnatune “we are not evil” brand?