Magnatune May Be How You Buy Music In The Future

by , 9:00 AM EST, January 21st, 2004

Over the next year, we are bound to see all sorts of competition to Apple's iTunes Music Store (iTMS). That's as it should be in a market where competition is a sign of health.

One of the sore points many have with the iTMS is that the 30 second music previews Apple offers do little to aid in the discovery of new music; would be customers can't get a good feel for what a tune sounds like, or artists the prime opportunity to get the exposure they want and need.

According to an article in USA Today, a new music download site with a different way of doing thing may be pointing the way Apple and the rest of the music download industry should go. The site, Magnatune, offers a small list of independent artists in several genres of music; but what makes the company cutting edge is its business model. From the article Apple's iTunes might not be only answer to ending piracy:

When you go to Magnatune, you find a list of a few dozen artists the company has signed. They are not famous. (About one in 300 artists that send music to Magnatune get signed -- the idea is to maintain a level of quality.)

Click on an artist such as Falik -- who plays electro-Indian music and may or may not intend his name to be a homonym -- and you can listen to his album for free by streaming it over the Internet. It works like an on-demand radio station: You're not downloading the music onto your computer's hard drive, and you don't own it.

To download an album so you can play the songs any time or burn them to a CD, you have to buy it. When you click to buy, you see a "suggested" price of maybe US$8, but you can choose to pay as little as US$5, or as much as you want. Here's what's fascinating: "Everyone assumes we're just getting US$5," Buckman says. "The average is US$8.93."

Buckman is convinced his customers are willing to pay for -- not steal -- his artists' music, and even pay more than is necessary, because Magnatune pays artists half its revenue from selling music.

From Magnatune Web site:

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 the rights to their music.

Founded by musicians, for musicians.

No major label connections.

We are not evil.

Stop by USA Today for the full article, and stop by Magnatune to check it out.

The Mac Observer Spin:

Some people have complained about Apple's 30 second preview and the 99 cent per song download fee. Those two issues (plus, perhaps Apple's DRM) seem to be the only sore points with iTMS, points that Magnatune addresses handsomely. On the other hand; Magnatune is a record label, doing what record labels should have been doing in the first place; providing a means for customers to gain access to music. Magnatune has essentially cut out the middleman, something that Apple and other download services have become, selling directly to the public.

As the article mentioned, the Magnatune sales model is much akin to shareware, and it relies heavily on the honesty of its customers. It is a sales model that may not attract big name artists, no matter who is behind it, so we think it unlikely that Apple will adopt the Magnatune way of doing things any time soon.

Still, Apple could learn a thing or two from Magnatune when it comes to how music is offered. Magnatune lets you download any tunes as a stream so that you can fully appreciate the music. There is also a playlist of music that is streamed to you as Internet radio. In this way, customers can check out the music they want.

As a note of interest, Magnatune was not the only site that offered a shareware-like sales model; Jade Leary's now defunct FairPlay site offered a similar service, albeit one not as sophisticated as Magnatune. Jade Leary dropped his bid to offer music lovers an alternative way to buy music when Apple came out with its iTunes Music Store.

TMO is working on a follow up to this story, so stay tuned.

Apple's iTunes might not be only answer to ending piracy