A New Model For Music Distribution
Avoiding the Pitfalls of Mp3.com
We've been working on a long-term project
to launch a web-centric music distribution system since 2001.
A survey of over 300 artists in the U.S. in 2002/2003 gave
us some general metrics to refine our concept, and as we move
through 2005 we hope to have completed more research to help
finalize a business plan in order to seek investors.
The original concept was to take the best
of sites like mp3.com (as a familiar reference point for discussion),
and discard the worst.
The Positive Aspects:
- A wide selection of music by indy artists
- Free downloads and previews
- More direct access to artists they like
- Lower price structure based on direct
Many fans/customers also derived positive
feelings about their purchases knowing the artist was seeing
a greater direct benefit, instead of making label execs wealthier.
This age group (18-35) is quite tuned into this.
- Massive exposure potential at little
- Cheap, effortless order fulfillment for
- Ability to customize pricing at will
- Ability to customize CD's for sale on-the-fly
The Negative Aspects:
For both consumers and serious artists,
there were two things that got in the way:
1.) Too Many Artists, No Standards of Quality
The original Mp3.com and new sites like
Garageband.com have no baseline standard or meaningful metrics
to maintain any level of quality OR
limit the number of artists. To put a new twist on a Joseph
Stalin quote: "sometimes quantity has a quality all
its own". The sites eventually become deluged with
"artists" who are much better web programmers than
they are musicians, and the "top artists" lists
are usually gamed into meaninglessness.
2.) The Need To Maintain Profitability
This was uncharted territory, and required
innovative approaches. It's not surprising that no-one has
made this profitable yet. To the best of our knowledge, no
major site has evolved a balance between quality content,
profitability, and providing a sense of value to both the
artist and consumer. Too much emphasis is placed on providing
massive bandwidth (which would not be necessary if the number
of artists were limited), and building a business model on
ad dollars rather than subscription and income from product
Our proposed business model is based on
income from subscription services to artists, and unit sales
income from consumers. If as an artist, manager, distributor,
or investor you find these ideas intriguing, please contact
us about the business model we're developing. We'd be
very interested in learning what you think, and perhaps building
a working relationship with you.
Last Updated: April 2005