So as many of you know, we’ve always been commited to changing how we do things here at Penny Distribution over the years, depending on how we feel it better serves artists & customers. Over the last few months we’ve been changing the business model, and branching off in new directions.
But many years ago, I ran into a company working out of Berkeley, CA called Magnatune that has come to exemplify that flexibility. For those unaware, Magnatune started way back in 2003 with some big ideas, such as support of Creative Commons, anti-DRM and a strict “We are not Evil” policy. This was well before these ideas were even CLOSE to being supported by the mainstream.
They’d been on my mind lately also because of their innovative online licensing platform – allowing automated sub-licensing of their pretty extensive catalogue to third parties – Trade Shows, Websites, Ads etc. It was always my goal to grow Penny Distribution in this direction – which I’m finally doing with Penny Black. And I’m not ashamed to say a lot of our inspiration for Penny Black comes from Magnatune’s model.
But what gets me most excited is just how consistent and successful Magnatune have been. While players like Spiralfrog, PLAYMusic and others have come and gone with little more than a whimper, Magnatune has consistently evolved.
With individual or single-album downloads declining, they started offering unlimited download subscriptions of their catalogue – which now accounts for 80% of their revenue. They also mention “when people can download albums without an incremental cost ($15/month for unlimited access, vs $8 per album) they tend to download a more diverse range of music.”, with 94% of their entire catalogue being downloaded at least once.
But the bottom line is Magnatune have never stood pat – they’ve always been willing to change if it better served the music buying customer – the customer who’s willing to experiment to find that one piece of music that makes it all worth while. And more than ever, that’s down at the end of a very, very long tail.