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#139981 - 09/19/03 02:58 PM Magnatune: What do you think?  
Joined: Sep 2003
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scottandrew Offline
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Seattle, WA
The web is abuzz with news of Magnatune:

http://magnatune.com

It's an internet record label with a unique business model. In a nutshell:

- profits are split 50/50 between artists and the label
- records are priced on a sliding scale between $5 and $18. The customer decides how much to pay
- the label markets your music for use in film, TV, radio and video games
- the contract is non-exclusive

...and here's the kicker: customers download before they buy. It's actually an honor system that allows people to listen, then pay what they think is a fair price.

Here's more details on what they offer for musicians:

http://magnatune.com/info/musicians

And some stats from their first 3 months of operation:

http://forums.magnatune.com/read/messages?id=554099

It looks like the vast majority of paying customers like paying $8 per record, and respectable number pay more. Some people give themselves a discount when buying a lot of albums, preferring to pay $5 each.

Of course, there's no data on how many people simply download and don't pay, but I suspect that those are people who wouldn't buy the record anyway because they didn't like the music.

Whaddya think? Are they on to something?

------------------
Scott Andrew and the Walkingbirds
DIY acoustic pop and weirdo country thing
Hear it: http://www.scottandrew.com/main/music
Buy it: http://www.scottandrew.com/main/records

#139982 - 09/19/03 03:41 PM Re: Magnatune: What do you think?  
Joined: Apr 2001
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Brian Austin Whitney Online content
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Scott,

I suspect it will be as successful as shareware has been. A few people have gotten rich from sharware (where there is a voluntary donation for the product after the fact). I'd be curious to see what would happen if people had products everywhere on the same honor system.. might be a good sociology experiment.. hidden video camera's at a convenience store with a "volunteer pay system" Wonder what would happen.

Brian


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Just Plain Folks
jpfolkspro@aol.com
Skype: Brian Austin Whitney

"Don't sit around and wait for success to come to you... it doesn't know the way." -Brian Austin Whitney


#139983 - 09/19/03 03:44 PM Re: Magnatune: What do you think?  
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Brian Austin Whitney Online content
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Scott,

Okay.. the problem I already see with this is the guy isn't telling how many were sold.. my guess is a microscopically small number.. but even if that is the case, it would still be helpful to know.. are we talking 20 units? 50 units? 100,000 units? (I imagine it's less than 100).

Brian


Brian Austin Whitney
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Just Plain Folks
jpfolkspro@aol.com
Skype: Brian Austin Whitney

"Don't sit around and wait for success to come to you... it doesn't know the way." -Brian Austin Whitney


#139984 - 09/19/03 04:19 PM Re: Magnatune: What do you think?  
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The site only launched three months ago, so it's very likely they haven't moved many units (i.e. individual downloaded files). I'd be more interested in what these figures are a year from now.

I've contacted the founder and asked him to come discuss the site here, and provide those unit numbers.

Actually, I think there's a very big hole in the biz model in that Magnatune can't fend off massive abuse of the honor system. For example, there's no way a major, in-demand artist is going to release a record this way, because pirates would be all over it the day it was out. There's no way to prevent that in this model. The Magnatune model could work for smaller acts trying to get established. If someone downloads my stuff and doesn't pay, it's more likely they just didn't like my stuff. But if I were, say, Eminem...you just KNOW those people are burnin' and swappin' and not carin'.

(I'd hate to think that, if I were lucky enough to start profiting from music, I'd have to manage my career so as to not get too popular.)

#139985 - 09/19/03 04:44 PM Re: Magnatune: What do you think?  
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TheCiscoKid Offline
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Hmmm... interesting idea, but I don't think I'd care to be an artist on there.
I took a look at their roster of artists and most of them are classical or electronica, no folk, no country, no pop, two metal bands, a couple others.
I can see the potential here for classical musicians, seems to me their listeners *might* be a bit more astute, perhaps more willing to cough up some monetary appreciation.
Personally, I still favor the opportunity to listen via streaming, then have the chance to purchase. I think it's all that's needed, unless an artist actually wants to give away a song in hopes it will draw buyers.
I agree the site has no apparent barriers against anyone who desires freebies. There could be ways to prevent abuse of this system, and I'd venture to say such a thing will be employed in the future.

-Gary

#139986 - 09/19/03 05:34 PM Re: Magnatune: What do you think?  
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pd Offline
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There are sites that let you stream a lofi sampler file but then you have to pay to download the high quality one. Apple probably does this and there are others. One in England (www.brightskies.com) charges nothing to upload songs, they charge $.75 for a download and the artist gets $.25 of that. They claim to then promote other uses and you get a share of that as well, all spelled out in their contract. I have no idea how well it works - none of the stuff they have there would I pay for.)

One I know of will stream excerpts of single songs or an entire CD at you and then you can place an order for the entire CD, or just the tracks you want off any nuymber of CDs in their library and they will make a custom disk for you. ($5 plus $1.25 per track. Sounds labor-intensive.) I don't think they sell downloads online. They do charge the artist an annual fee based on how many CDs you list. Everything is cross indexed by genre, energy level, CD title, and artist. (www.songpeddler.com if you want to look) Mostly folk and jazz, generally quite good.

[This message has been edited by pd (edited 09-19-2003).]

#139987 - 09/20/03 02:06 PM Re: Magnatune: What do you think?  
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magnatune Offline
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Berkeley, CA
Quote
<font face="Verdana, Arial" size="2">Of course, there's no data on how many people simply download and don't pay, but I suspect that those are people who wouldn't buy the record anyway because they didn't like the music.[/B]</font>


It's true, I don't have sales stats up there, but here's the scoop...

Right now, about 1 in 300 visitors to the site buys an album. The interesting number for me is how many people who visit more than 30 seconds actually by, and that's 1 in 114. About 62% of people who visit the site leave within 30 secs (probably because it's not what they wanted, or they don't have a DSL/Cable-modem connection)

I don't get too bent out of shape about people who download and don't buy, because that's just like visiting a CD store and flipping through the display or using a listening booth. Besides, I've found that the conversion rate (visitors to buyers) has been slowy increasing over time, probably because of repeat visits (which is going up) or because of a 'better' audience (Magnatune being mentioned in blogs of like-minded people)

------------------
www.magnatune.com
Try-before-you-buy
music
We are not evil.


http://www.magnatune.com
Try-before-you-buy music
We are not evil.
#139988 - 09/20/03 02:13 PM Re: Magnatune: What do you think?  
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magnatune Offline
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Berkeley, CA
Quote
<font face="Verdana, Arial" size="2">Okay.. the problem I already see with this is the guy isn't telling how many were sold.. my guess is a microscopically small number.. but even if that is the case, it would still be helpful to know.. are we talking 20 units? 50 units? 100,000 units? (I imagine it's less than 100). [/B]</font>


In the first 12 weeks of Magnatune being up, I sold 286 albums on-line, with an average price of $8.08, so about $2300 worth.

I'm really happy about that, since the web is a huge, crowded place, and I started with zero hits.

At the current growth rate (about 30% month to month) my top third of musicians should see around $3000 a year from Magnatune. That compares very favorably to the *nothing* they'd get from a typical label, or the average of a one-time advance/buyout of $3000 that established indie artists get.

One note -- in the past 48 hours, Magnatune's been mentioned in a bunch of blogs, and traffic went up 3X, resulting in about a 5X increase in sales.

I've sold 36 albums in 48 hours, detailed below.

Here's a breakdown of the past 48 hours -- notice how lots of people volunteer to pay more than the $5 minimum and the $8 recommended price. Also note how many really different genres are represented:

world:
beth quist $8 $10 $8 $8 18
solace $8 $8
masley: $8
kouroush $10 $8
anup $8

electronica:
cargo cult $10 $9
monoide $7
belief systems $7 $8 $5
rapoon $8
aba structure $5
markitos: $8

rock:
emmas mini $8 $10 $15 $10 $10 $8 $5

classical:
kyiv $8 $8 $8 $8 $8
sreteniye $8 $8
filles: $8
oberlin: $8


------------------
www.magnatune.com
Try-before-you-buy
music
We are not evil.


http://www.magnatune.com
Try-before-you-buy music
We are not evil.
#139989 - 09/20/03 02:20 PM Re: Magnatune: What do you think?  
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magnatune Offline
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Berkeley, CA
Quote
<font face="Verdana, Arial" size="2">Originally posted by scottandrew:
Actually, I think there's a very big hole in the biz model in that Magnatune can't fend off massive abuse of the honor system. For example, there's no way a major, in-demand artist is going to release a record this way, because pirates would be all over it the day it was out. There's no way to prevent that in this model. The Magnatune model could work for smaller acts trying to get established. If someone downloads my stuff and doesn't pay, it's more likely they just didn't like my stuff. But if I were, say, Eminem...you just KNOW those people are burnin' and swappin' and not carin'.</font>


First off, downloading music on the Internet is way harder and more expensive than hearing it on the radio, so I'm only focussing on genres that have a big fan base, and aren't easily found on radio (or frankly, in most record stores).

That means no pop, no country, no jazz. People can find that stuff easily already, and (IMHO) there's too much of that stuff already.

But, for things like metal, new age, world, classical, good music is hard to find and even harder to hear beforehand. And, the major labels and stores are mostly not interested in these genres, so it's an obvious hole to exploit.

And finally, I only put things on Magnatune that I really enjoy listening to. The best indie labels have always been this way: based on a core founder's music tastes. I'm not into country or rap, so I don't do them -- I wouldn't be able to pick out things that were good, and I wouldn't be personally motived to promote them.

------------------
www.magnatune.com Try-before-you-buy music
We are not evil.


http://www.magnatune.com
Try-before-you-buy music
We are not evil.
#139990 - 09/20/03 02:31 PM Re: Magnatune: What do you think?  
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EdPerrone Offline
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I think I would have a problem with the license the artist is granting. The Magnatune terms specify the "Attribution-NonCommercial-ShareAlike license from Creative Commons":

http://creativecommons.org/licenses/by-nc-sa/1.0/

This license states that the buyer is free to "copy, distribute, display, and perform the work" and to "make derivative works."

That seems to be giving up a LOT!

Aren't performance licenses what the PROs sell? So that agreeing to this license means (for example) they could use your music as the theme for a hit TV show WITHOUT paying any additional performance royalties?

And making derivative works .... man, that seems to be a BIG can of worms.

I might attempt to make the business model itself work. But as a writer, those terms seem to be cutting my legs right out from under me.

Not a lawyer, just my $0.02.....

--- Ed

#139991 - 09/20/03 06:27 PM Re: Magnatune: What do you think?  
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Brian Austin Whitney Online content
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Magnatune (you don't sign your posts, so I have no idea who you actually are?)

286 is a respectable number of sales in that initial time period. I know giant corporate owned sites that probably didn't do that well. That's the good news.

30% growth month to month is a nice goal.. but in a year, that type of growth will be tough. It's obviously easy to grow at that rate for a few months when you're getting started.. but if you start selling 100 CD's this month, to keep a 30% per month growth rate, you need to be selling 2,329 per month by next year. And in 2 years, that number grows to 54,280 per month. 1,264,621 per month in 3 years. If you're doing that, you will certainly have reinvented the entire music industry and probably will be the most powerful individual in the entire world of music. Of course, if your model actually worked on even a tiny fraction of that level.. 1000 copy cats will spring up to compete.

Back to reality and the bad news, there are some serious concerns raised by Ed. Giving all rights to your music away forever because 1 person paid 5 bucks for your album full of songs is ridiculous. People complain about major labels ripping artists off with bad deals.. this (if it is as Ed suggests) has to be the worst deal I have ever heard of. If what Ed has pointed out is accurate (and please defend it if it isn't) for 5 bucks per artist, I can do anything I want to your entire roster forever.. I can essentially buy their souls for 5 bucks...
ACK!

If anyone is considering this site for their music, you better get an attorney unless you are happy to give the rights/control away to someone (basically anyone) on the planet for 5 bucks.

Magnatune, please clarify your contract and the rights therein... otherwise, this sounds like a potential disaster waiting to happen for some of these artists/writers unless they are perfectly happy giving away their works forever.

Brian


Brian Austin Whitney
Founder
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jpfolkspro@aol.com
Skype: Brian Austin Whitney

"Don't sit around and wait for success to come to you... it doesn't know the way." -Brian Austin Whitney


#139992 - 09/20/03 06:44 PM Re: Magnatune: What do you think?  
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Brian Austin Whitney Online content
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I took a look at the basic info (not the legalese version) about this contract and it seems clear to me that if you sign it, you've removed any future commercial use of your music from the mix forever. Though it states that people can't use your music for commercial purposes (i.e. resell it) it also means that no one else will want to use it for commercial purposes either because free version of your music will always be legally available for free the rest of eternity.

If you put zero commercial value on your music, and are happy NEVER having a future commercial value on it (except perhaps the voluntary shareware type support Magnatune can give you), then sign the deal. Otherwise.. stay away.

Brian


Brian Austin Whitney
Founder
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jpfolkspro@aol.com
Skype: Brian Austin Whitney

"Don't sit around and wait for success to come to you... it doesn't know the way." -Brian Austin Whitney


#139993 - 09/20/03 07:06 PM Re: Magnatune: What do you think?  
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pd Offline
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pd  Offline
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This sounds very much like the sort of license used in the Linux and "Open Source" software world. It means the same thing there as what Brian said above. You give it away in hopes that somebody else will benefit from it and maybe even improve it. It's a nice warm fuzzy feeling of everybody doing good for each other.

Trouble is, you can't make a living doing it. In software, you make the money on selling support and service contracts for the software, or sell other related software, or have another for-money version with more features that does not share any of the code that you gave away. I don't see a musical analog for any of that other than selling stuff like T-shirts.

It isn't working well in the software business. RedHat is now selling a pro version of their Linux that has diverged from the Open Source "community supported" version, and guess what, it costs about the same as Windows. The serious pro-type application software (like big databases) that runs on top of Linux sells for just as much money as the same thing on any other OS platform.

#139994 - 09/21/03 12:27 AM Re: Magnatune: What do you think?  
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Doug/Liszt Laughing Offline
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*** this is just my opinion ***

I'm not that familar with PRO (ASCAP, BMI, SESAC) agreements, since I haven't deemed it necessary to join one yet, but from what I do know I bet signing an agreement like this, because it is giving away performance rights, would be against the contract you signed with your PRO. Or, at the very least, you wouldn't be able to register songs that are under this Magnatune agreement as it stands today with your PRO for performance fee collection. But, I think this Magnatune agreement would be against the basic contract you signed with the PRO. I'd have to check on that. And you sure as heck would not be able to have a cover song under this agreement, because no publisher is going to go for it.

There are some people who have gotten rich like Brian said on shareware models, but the successful ones I know of work because they either are widely, widely distributed (hence a 1% pay rate would actually add up to something), or because they disable some feature of the software until it is paid for. And, they don't allow for modifications (maybe plugins, but not modifications of the core code), and they have pop-ups asking for payment or explaining how to pay each time the program is opened. How is all the above going to be incorporated into an MP3 or the like, with all the different devices they can play on? That would have to be a coordinated effort between device/mp3 player makers and the content provider. Or, a proprietory thing.

I asked the guy who wrote MIRC (the IRC client that in the IRC heyday was the mainstay software to use IRC on), which is shareware, what he thought the percentage of paying clients was (I did this after I registered and paid my $15, yes I bet I am the only person in my state who paid for it - LOL), and he said 1%. Now, I bet that client was distributed to AT LEAST 10 million people worldwide (and probably far more), so if you do the math that's $1.5 million dollars. Not too bad...but music doesn't pop up everytime it is played and say "pay me", or a fully downloaded song doesn't beep all throughout until it is paid for (it could, but that is not what this Magnatune agreement is offering to customers).



[This message has been edited by Liszt Laughing (edited 09-20-2003).]


Boo...my name is Doug
#139995 - 09/22/03 01:18 PM Re: Magnatune: What do you think?  
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scottandrew Offline
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Quote
<font face="Verdana, Arial" size="2">it seems clear to me that if you sign it, you've removed any future commercial use of your music from the mix forever.</font>


The "Attribution-NonCommercial-ShareAlike" license is very broad and I question Magnatune's decision to use it instead of one of the more restrictive Creative Commons licenses.

That said, that specific license doesn't preclude further commerical use of your work. For example, if a film producer wants to use your music in a commerical film, they still have to pay you. But it does remove the commercial incentive to simply reproduce the song and sell it.

Quote
<font face="Verdana, Arial" size="2">I'm not that familar with PRO (ASCAP, BMI, SESAC) agreements, since I haven't deemed it necessary to join one yet, but from what I do know I bet signing an agreement like this, because it is giving away performance rights, would be against the contract you signed with your PRO.</font>


This is actually a VERY valid concern, and I'm taking it straight to Creative Commons to get a response (which I'll post here).

#139996 - 09/22/03 04:54 PM Re: Magnatune: What do you think?  
Joined: May 2003
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kit Offline
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kit  Offline
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i've been reading this whole thing with great interest. i'm just an uneducated guy. i don't really know anything about the music biz (unless you count which bars have the best free beer for the musicians).

i've checked out magnatune, and read the license in question. i just don't know... the comparisons to open source are fairly apt.

open source is a great way to make high quality, reliable software. but is it a good way to sell albums? i just don't have an answer. my gut reaction is "no" - because my intuition says that the system will eventually be abused by its users.

but the internet *has* produced some strange, strange successes in the past. at its core - this is just "distributed marketing." the internet is an ideal meme distribution device, and this is yet another example of a way to exploit the "pass it on" nature of the place, by trying to create a license that encourages people to redistribute.

i think most people are bothered by the "redistribute and alter" language. art isn't like software -- changing some lines of code is less personally intrusive then altering someone's lyrics or arrangements. i think this is why we balk at such a license.

but i like the tone of this site -- i like the audience friendly approach. and the numbers sound exciting.

and they're pretty upfront about it being a risk, something that hasn't ever been tried before. on their artist page it says something along the lines of "this is an experiment in a new way of distributing music."

man, i gotta say i admire them for going out on a limb.

in the end, i think the proof will be in the pudding. if their artists make money, then i can hardly fault anybody for taking the risk on a new way of doing things.



------------------
kit malone
http://www.kitmalone.com

#139997 - 09/22/03 06:12 PM Re: Magnatune: What do you think?  
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Herbie Gaines Offline
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Herbie Gaines  Offline
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I also have been reading this thread with great interest. The posters are very smart and knowledgeable. I believe the ball to be in your court now, Mr Magnatune! I am anxiously awaiting your response to these very legitimate questions! Your concept is intiguing.


Herbie
JPF Chicago Chapter Coordinator
http://www.herbietunes.com

#139998 - 09/23/03 03:31 AM Re: Magnatune: What do you think?  
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EdPerrone Offline
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EdPerrone  Offline
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Mt. Pleasant, TX
I can agree with what Kit said a couple of messages back, including patting these guys on the back for their willingness to try something new and take a risk. I think there are two parts here.

First is the "shareware," try before you buy and pay what you think it's worth idea. Not bad. It may or may not work, but it's something different and it's definitely worth giving it a shot.

Second is the "open source" type license, and this is where we get into some difficulties, at least for commercial music (meaning, music that the writer/artist may want to make additional monies off of). The open source license, to my mind, doesn't work here.

Which is not to say that it can't work in any situation. In the software world, open source is primarily a COLLABORATIVE tool. It's reason for being is mainly to allow people to share and improve code, while not infringing on everyone else's copyrights. You get the benefit of many, many developers, all improving the same code base.

You COULD do this with music, perhaps especially with electronic, experimental, and similar types of music. I take my synth, come up with a unique patch, and crank out a few minutes worth of music. You download it, add your own unique sound to it, and post that for the next person. Etc.

With a whole community doing this, the original piece would "branch" off into many different forms, depending on who added what to which piece at which point in time. A hundred different "end results" from perhaps just one original synth line.

Brian Eno would love it! :-)

I think in that sort of context, an "open source" type of license might work well. Heck, it might even be a lot of fun! And everybody would be able to use the works they create and contribute to.

I just don't think it will work too well in the Magnatunes context.

--- Ed

#139999 - 12/27/05 10:42 AM Re: Magnatune: What do you think?  
Joined: Apr 2001
Posts: 18,205
Brian Austin Whitney Online content
Brian Austin Whitney  Online Content


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Indianapolis, IN USA
Since this topic has come up elsewhere, perhaps it is time to revisit. Did Magnatune maintain their 30% per month sales increase? Are they still requiring people to give away their music forever for 5 dollars? Let's hear from folks a couple years later to see where it stands. This is one of the few digital sites to even MAKE it more than a couple years.

Brian


Brian Austin Whitney
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Just Plain Folks
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"Don't sit around and wait for success to come to you... it doesn't know the way." -Brian Austin Whitney


#140000 - 12/27/05 05:10 PM Re: Magnatune: What do you think?  
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scottandrew Offline
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Seattle, WA
I haven't heard ANY bad press about Magnatune since its inception, which is pretty amazing. I figure there'd be a few "Magnatune sucks" rants out there on the Web by now.

I don't know if they've maintained their 30% per month goal. If you take the time to sift through John's blog, you'll find places where he reports both negative and positive sales trends and what he attributes them to.

I have friends who have successfully licensed their music through Magnatune, potentially for thousands of dollars. I don't think they'll be quitting their day jobs anytime soon [Linked Image] But the point is that the "open source" licensing does not seem to be scaring off commercial licensors.

Their top-selling genres are classical, world, and electronica. Rock is somewhere in the middle. Folk/singer-songwriter is lumped under "pop" -- probably because they don't have enough artists in that genre.

------------------
Scott Andrew
Lo-fi acoustic pop superhero!
http://www.scottandrew.com/music


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