NetMusic http://www.netmusic.com/ is now selling most of our catalog on-line. We signed an agreement with them in January, and everything Magnatune has (as of the beginning of this month) is up. The owner of the site, Glen, personally listened to most of our catalog and was so excited by several of the bands that he's been featuring Magnatune artists on the home page, giving us 50% of the featured artists on the "tracks" section (currently, Brad Sucks, Rocket City Riot, and Cargo Cult). Note that unlike Magnatune, NetMusic *does* sell single tracks. We gave NetMusic a 50% margin when selling our music, which is higher than average, but that's another reason he's pushing our music so hard. Glen tells me sales are still quite modest, but picking up.
Last month, I mentioned an agreement with a German record company to sell physical CDs of a few of our artists. NovaTune http://www.novatune.de/ is now printing and selling CDs of Cargo Cult, Emma's Mini, Tom Paul, William Brooks, and Bjorn Fogelberg. NovaTune is similar in philosophy and business to Magnatune, letting musicians keep their rights and paying them a very fair 4 Euros per CD sold (which is also our deal with them), and only signing up music they really like. The main difference is that NovaTune makes physical CDs (and artwork) using a just-in-time printing system, selling the physical CDs both online and through distributors and stores in Germany. I watching NovaTune closely to see if their model might work in the USA and the rest of Europe. A few more Magnatune artists are currently in the pipeline to be sold via NovaTune, and should show up next next month.
The average purchase price for Magnatune albums in April was $8.59, still very healthy and above the recommended price of $8.00.
We sent about 60 custom CDs to movie and film producers this month, in response to their request for music submissions (we get notified of these requests for music from a lead service we pay, and put 3 songs on each custom CDR that we think would work for the scene). So far, nothing has come from any of these CDs sent (no acknowledgement of receipt of any of them), which is disappointing, but we'll keep plugging away at it. We paid for 6 months of this lead service (it's not cheap), and we'll give it the full 6 months of honest attempt to make it work.
The USA Magazine Business 2.0 did a large story on the Creative Commons, heavily featuring Magnatune and our artist Cargo Cult http://magnatune.com/info/press/
We've slowed down the rate of release of new artists on Magnatune, to six to eight artists released every 2 weeks. We've done this because sales have been flat the past 3 months and we don't want to split the same monthly sales amount across more and more musicians, unless those new musicians are truly amazingly wonderful. This also helps us keep our reputation of having tremendously good music. Finally, this seems to be a pace at which people who receive our newsletter can handle the new artists. When we were adding artists faster, we noticed that new albums didn't get much of a chance on the 'new' section of the home page, and didn't get listed in the "customers who bought this also bought" because they weren't featured long enough. We will probably keep fiddling with this.
John, just for clarification on NetMusic, you said they get 50%. So you get 25% and the artist gets 25%? The tracks are 89c each, so around 22 cents for each song to the artist?
I know iTunes has the DRM and this doesn't, but how do the two services compare in terms of money toward the artist?
Also, does each artist have to explicitly agree to each of these venues, or is that rolled into a general online purchasing umbrella?
BTW, just started to listen to DJ Markitos, and it is nice work. :) I'm a bit less active than some, so I could probably use it for exercise at the current bpm.. ;)
Posted by: Shawn Fumo | May 04, 2004 at 09:01 AM
"I know iTunes has the DRM and this doesn't, but how do the two services compare in terms of money toward the artist?"
iTunes gives 70% of the sales to the label, and then a label's agreement with it's artist kicks in. Assuming the "recoup point" has been hit (ie, the Label's books show a profit on the album, something which rarely occurs), the artist would get around 15% of the sale price, or about 10 cents from an iTunes 99 cent sale. However, major label record contracts frequently apply discounts to revenue made online, so the major label artist could get less still.
On Netmusic, they give us 50% of the 89 cents, as we give 50% of what we get to the musician, about 22 cents. Obviously, Magnatune musicians make a LOT more from sales of their music off of Magnatune, but it's another venue, so it's worth trying.
"Also, does each artist have to explicitly agree to each of these venues, or is that rolled into a general online purchasing umbrella?"
It's all rolled into agreeing to have Magnatune sell your music. NetMusic is one of many online stores I'm signing contracts with to sell our music (and most stores only will deal with record labels).
"BTW, just started to listen to DJ Markitos, and it is nice work. :) I'm a bit less active than some, so I could probably use it for exercise at the current bpm.. ;)"
We're actually thinking about releasing an album of all 138BPM version of DJ Markitos', since we made most of those versions for an exercise CD already.
-john
Posted by: John Buckman | May 04, 2004 at 04:46 PM
"iTunes gives 70% of the sales to the label"
Ok, so about 34 cents for a song in iTunes for Magnatune artists. Not so bad..
"We're actually thinking about releasing an album of all 138BPM version of DJ Markitos', since we made most of those versions for an exercise CD already."
Cool.. variety is always nice. :)
Posted by: Shawn Fumo | May 05, 2004 at 07:31 AM
I've only been buying from Magnatune for about a month, but I've found that I'm just not able to find enough time to go through all of the great music and pick out the stuff that I want to buy. I've got a backlog of a few artists' music that I wish to purchase, but I'm trying to slow down a bit. I've already puchased about $90 worth of music last month, from Magnatune (paying at least $13 per CD). Considering that I had other things to buy (like clothes and groceries, and I'm gearing up to pay for a for Summer quarter at school), I'm kinda glad that you're slowing down the rate at which new artists are added. ;)
Posted by: zborgerd | May 06, 2004 at 03:10 PM