Magnatune founder John
Buckman told technology law podcast OUT-LAW
Radio that the company would soon release streaming products to
earn revenue from the growing number of its customers who are
streaming its music rather than downloading and owning it.
"What I'm finding is in an era now when we're all connected to
the internet a lot, people don't really want to download music
because then you have to manage it, you have to download it and
make sure you don't lose it and if your computer blows up you have
to go and re-download it," said Buckman. "What people want is
access to music."
Magnatune currently allows anyone to listen to all of its music
online, with announcements between tracks. Downloads or CDs are
paid for.
Buckman said he had observed the shift in listening patterns
over the past two years, during which time the number of listeners
to Magnatune's online streaming service tripled to 45,000 a day,
while its sales of CDs and downloaded albums halved.
He said he would soon launch streaming services for $10, $20 and
$40 per month. In the most expensive package, users would be able
to listen to any music, download any music and
"You simply don't have to think about buying any more, you just
listen online and you give us a little bit of money and you can
listen to everything as a stream," he said. "If you like something
you can download it for free as well."
Buckman said that the $40 plan is "a little crazy". Under it, he
said, a subscriber indicates what of the streamed music they like
and Magnatune will post them 10 CDs every month from their list of
favourites.
Magnatune is a small, four person company which is attempting to
reinvent the business of being a record label and change the terms
on which business is done, and is attempting to adopt a different
attitude to intellectual property to traditional labels.
The label delivers CDs and downloads without the digital rights
management (DRM) technology that major labels have used to prevent
unauthorised file sharing. In fact, Magnatune specifically requests
that customers share music with three other people.
Most radically, it offers consumers a choice of how much they
pay for music. Consumers can choose to pay anything between $5 and
$18 for any of the 500 albums on its books. Buckman said that his
company considers trust an important part of the business
process.
"It turns out that people are quite generous and they pay on
average about $8.40, and they really don't get anything more for
paying more other than feeling like they're doing the right thing,"
said Buckman. "But the reality is today nobody really needs to pay
for music at all. If you choose to hit the 'buy' button at
Magnatune then you're one of the people who has decided to actually
pay for music. Shouldn't we reflect that honest behaviour back and
say, well, if you're one of the honest people how much do you want
to pay?"
The company also licenses music for industrial uses, such as on
television, in films and in shops. Buckman said that it was the
first to offer automated, flat-rate licensing on the internet.
