Magnatune Shifts to a Membership Model
Magnatune, the online music label sporting the tagline “We Are Not Evil,” announced this week that their all-you-can-eat membership program has been so successful that they are shifting their business model to take advantage of it. For $15 a month1, you can download as much music as you like from the service.
From founder John Buckman’s blog:
Why the change? Simply put: membership today accounts for 74% of our revenue. Over the past two years our album download sales have declined while the unlimited downloads memberships have grown.
The two graphs below spell out a clear message from our customers:
We don’t want to buy your downloadable albums one at a time, we want unlimited access. And we’re willing to pay.
You can see that download revenue has decreased in both relative and absolute terms. In contrast, 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.
Magnatune was founded in the spring of 2003 with the goal of being a music label that treated both the artist and the audience fairly; often the label is referred to as a “pioneer in the fair trade music movement.” Users are able to stream and sample the music on the site before buying, and in recent years, Magnatune has become a the friendlier replacement for the iTunes Music store in Linux-based music players like Rhythmbox.
Magnatune was also one of the first commercial companies to make use of Creative Commons licensing, and is credited with helping the CC movement take hold. They make non-exclusive agreements with their artists, and gives them fifty percent of the proceed from the online sale of their work. Sound familiar? One of the inspirations for Podiobooks.com (founded in 2005) was Magnatune.
For the last several years, Magnatune has offered the work of artists using a “name-your-price” model, where the buyer could specify how much they wanted to pay for an album. The customer could order the music on CD, or via download of high-quality mp3 or .wav files. With this change, they are ending the name-your-price concept (all albums will be a fixed $12 for non-members) and the CD distribution.
Below: Music from the game Braid, which was licensed from Magnatune:
Music from Braid by Sieber, Kammen, Fulton and Schatz
- less if you buy time in bulk [↩]
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Tags: Magnatune, membership, Music
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