Magnatune: “We are not evil”

Here is how the Magnatune Internet record label describes itself:

We’re a record label. But we’re not evil.

We call it “try before you buy.” It’s the shareware model applied to music.
Listen to hundreds of MP3’d albums from our artists. Or try our genre-based radio stations.

If you like what you hear, buy our music online for as little as $5 an album or license our music for commercial use.

Artists get a full 50% of the purchase price. And unlike most record labels, our artists keep their rights to their music.
Founded by musicians, for musicians.

No major label connections.

We are not evil.

Hmm, anyone who says they are not evil twice within the space of a few sentences is either REALLY not evil, or is the Big Bad wolf dressed as granny. In this case my bet is the former.

Here is the founder John Buckman’s story:

Magnatune was born out of some observations I’d gathered about the music industry, along with personal experiences from my wife releasing her CD on a British record label.

Personal experience:

when my wife was signed to a British record label, we were really excited. In the end, she sold 1000 CDs, lost all rights to her music for 10 years (even though the CD has been out of print for many years), and earned a total of $45 in royalties.

the record label that signed her wasn’t evil: they were one of the good guys, and gave her a 70/30 split of the profits (of which there were none). 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 destroy this small, progressive label.

Industry Observations:

Radio is boring: everyone I know is into interesting music, yet good music is rarely played on the air. I’m into everything from Ambient, Industrial, Goth, Metal to Renaissance, Baroque, Tango, Indian Classical and New Age (and many other genres!), and so are many of my friends. Yet, these genres are barely visible in record stores, and totally absent from the airwaves. Radio is mostly about Country, Pop, and Rock, with a little bit of dull, safe classical thrown in.

CDs cost too much, and artists only get 20 cents to a dollar for each CD sold. If they’re lucky. And, most CDs quickly go out of print: I buy more CDs from EBay than Amazon.

90% of records signed to a major record label are never released by the label. Online sales (such as over Amazon.com) often cost the artist 50% of their already-pathetic royalty. International sales and mark-downs often net the artist no royalties.

Record labels lock their artists into legal agreements that hold them for a decade or more. If it’s not working out, labels don’t print the band’s recordings but nonetheless keep them locked into the contract, forcing them to produce new albums each year. Even hugely successful artists often end up owing their record label money.

Napster, Gnutella and Kazaa proved that people love music, and they want to share it. Lawsuits may shut Kazaa down (and Kazaa obviously promotes copyright violation), just as Napster was shut down. Clearly there’s a huge public demand for Open Music.

Using the Internet to listen to music is usually tedious: there are too many ads, too many clicks, and the sound quality is usually bad. It’s too much work, not enough reward. A well run Internet radio station (such as Shoutcast, or Spinner) solves that, but the entrenched record industry wants to kill that too, with onerous licensing terms and odd “rights limited” playback schemes.

My solution:

I thought: 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 is my project. The goal is to find a way to run a record label in the

Internet Reality: file trading, Internet Radio, musicians’ rights, the whole nine-yards.

If you think Magnatune is a worthy goal, please support it. There are powerful forces who want it to fail, so I need your help if this is going to work.

Very interesting concept – I hope it works. Of particular note is the innovative pricing plan: you choose to pay whatever you think the “album” (all digital downloads, no CD’s) is worth, between $5 and $18. Check it out.