Magnatunes's New Model For The Music Business

Creative Commons music label Magnatune has announced a new business model - giving people what they want.

The label has relaunched as a "no-limits membership" music business. They offer unlimited online listening and unlimited downloads for $15/month.

The chart, above, explains why Magnatune is making the change - their download revenue has dropped sharply as their membership revenue has increased.

Or as Magnatune CEO John Buckman puts it, "revenue from memberships has grown 80% in the past year alone. I don't know of any other long-lived Internet music services that are experiencing our kind of revenue growth."

In addition to moving to an unlimited download business model, Magnatune follows several other fan-friendly business practices:

• Do DRM on anything;
• They encourage you to give copies of anything you buy to three friends;
• They encourage the use of their music in podcasts;
• They're "remix friendly"; and
• Label musicians get 50% of the revenue, based on what users listen to and download.

What do you think of Magnatune's business model? Do you think $15/month for unlimited downloads is a fair deal for both musicians and music fans?

Link:

• Magnatune

James Lewin
Twitter @podcasting_news

• Print On Demand CD Box Set 03-Aug-09