News

Beatpick flatters Magnatune business model

Mike Linksvayer, March 6th, 2006

If imitation is the best form of flattery, London-based record label BeatPick is handing it to Berkeley and London-based label Magnatune in spades. Similarities include CC license used (Attribution-NonCommercial-ShareAlike), a 50/50 artist/label revenue split, a menu of commercial licensing options and availability of wav, mp3 and ogg downloads.

Of course it’s about the music and Betpick has its own set of artists. Check them out. If you’re a musician you can submit your music.

Congratulations to Beatpick for copying a great business model. If you’re interested in commons-based business models and happen to be attending SXSW, do not miss our panel moderated by CC board member Joi Ito and featuring Ian Clarke of Freenet and Revvr, Teresa Malango of Magnatune, and Jimmy Wales of Wikimedia:

Open source software business models have gone from theoretical to profitable over the past half decade-companies like Red Hat, MySQL, JBOSS, and IBM. How will peer production business models prove out in the content space? Learn how pioneering commons-based businesses are creating what Business 2.0 calls the next multi-billion dollar industry.

Update: David d’Atri of Beatpick responds below. For the record, I intended the above as a compliment to both Magnatune and Beatpick. Many (not just two!) commons based business models are great. As hinted in the above panel description, the field is ripe for exploration and innovation (which includes copying and improving, even though that isn’t what Beatpick is doing). David d’Atri:

We admire Magnatune but think we are not a copycat.

Some
thoughts:

BeatPick is a project that started in 2003 during my Master in
Business Economics. The title of my -first class- final dissertation:
"A paper on economic efficiency and the infringement of
copyright in the music industry: An Insight into the Future of the
Music Industry." I showed that a decrease of copyright
rigidities in the music industry could lead to an increase in total
welfare. Just ask for a copy if you can bother to read a “heavy”
and very theoretical paper.

In 2003
I had no idea about Magnatune and I did not find out about it until 4
months ago when our project was already being developed.

Some
basic differences with Magnatune:

  1. We do not use a flexible price schema. We do not find it fair.
    Although it is really smart from a business point of view, we find no
    fair to use a clever type of price discrimination which aims to
    extract
    the total surplus from each customer by asking them to
    self-discriminate. We admit that it takes a lot of good marketing to
    ask people to self-discriminate and we think Magnatune does a great
    job.
    However we prefer to sell more at a cheaper price as we are for more
    people having more music. If we were to implement a flexible price
    schema then we would find fair to give artists 100% of the
    earnings
    over a certain amount.
  2. We let artists go anytime. Agreement can be terminated in 30 days
    while Magnatune ask artists to commit for 5 years. We think
    Magnatune’s request is reasonable from a business point of view but
    it is not very fair as Magnatune does not commit to market each
    artist.
  3. We have
    a completely different graphic and style. We target younger people.
    Our message is simpler and we think more direct. The graphic is not
    as serious as Magnatune. Graphic is very important and says a lot
    about who you are.
  4. We try to create a network of artists collaborating for commercial
    and non commercial projects. (“commission work from our artists”).
    We get a commission on commercial projects but we get nothing for non
    commercial projects. Latest example is Tobor Experiment (experimental
    section) collaborating with HRF-LAB
    for the Lovebytes.
    Magnatune does nothing like this.
  5. We try
    to deal with hip hop and video art music (experimental section).
    Magnatune does not.
  6. We are
    going to make a section dedicated to VJ and use a similar business
    model. Magnatune does not.

Some
consideration:

  1. Most
    internet website split earnings 50/50. Nothing new. Certainly it was
    not invented by Magnatune.
  2. Categories for music licensing were not invented by Magnatune’s .
    Most music licensing websites have similar.
  3. We have been operating for 30 days only and we have had an holding
    page for the last 2 months. Our results: 1. More than 800 music submissions including many record labels.
    2. More than 4500 emails.
    3. 53 artists signed.
    4. About 75 links to BeatPick on google.
  4. Nobody
    has ever mentioned us to be similar to Magnatune, most of the people
    did not know about the Creative Commons. Are you sure we are operating in the same market Magnatune is operating? Are
    you sure is not good to have other similar business models? If not
    just to create hype around the Creative Commons. Are
    you sure there is no space for 2 similar business models in the
    market?
  5. Net labels must be judged not only by the business but by their
    music, their graphic, their style, their marketing.
  6. WAV and
    OGG…where is the innovation? I think is just normal to offer
    them now that broadband is getting truly “broad”.
  7. The main innovation is to offer music released under the Creative
    Commons and this is why we claim to support and believe in fair
    trade. Does Magnatune feature the CC logo in its homepage?

Some
inspirations from Magnatune:

  1. The licensing. I had in mind to sell music licenses. My original
    project was a sort of instant msn communication in order to provide
    clients with a an instant quote and a contract delivered over email.
    I was not sure how to build a music licensing control panel as we were
    short of money to hire a developer (no good myself) and a lawyer. 4
    months ago I saw Magnatune and I thought I could give it a go as I
    understand Magnatune is pro Open Source therefore I do not understand
    why it should be unhappy about its business model being taken as an
    inspiration to build upon.
  2. “The share 4 songs with friends” comes from a detailed analysis
    of network externalities in the music industry during my
    dissertation; I have a draft proposal of this idea written while
    working at a London record label more than 1 year ago.

Magnatune
does a great job in marketing its idea and I do admire it. I do also
admire John Buckman. I do also admit that is possible to find
similarities but I think that you were way too harsh. You did not
consider how good is for the Creative Commons, Fair Trade and the music
business to have other record labels operating according to a fair
business model. I do wish people to get inspired by this business
model.

I thank you for the time you spent in reading this post and I do
appreciate the opportunity we have had to say what we think. It’s
great to be on the Creative Commons blog.

David d’Atri

BeatPick — FairPlay Music Label

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