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.

Overview

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:

For Consumers-

• 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 sales

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.

For Artists-

• Massive exposure potential at little cost
• Cheap, effortless order fulfillment for CD's
• 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 purchases.

Summary

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.