We’ve been following Magnatune since it launched in 2003 as a record label that embraced the net, including giving fans the legal right to do what comes naturally given the net — share an remix music noncommercially — by offering all label music under the Creative Commons Attribution-NonCommercial-ShareAlike license. At the time a fairly radical position. Fast forward nearly 7 years to Magnatune founder John Buckman’s update on the label’s business:

So really, it’s not so much that we’re changing business models, but rather that we introduced “unlimited memberships” two years ago, and they’ve been so successful we’re deciding to focus on that.

Some things that are not changing:

• We’re still not evil: we have always paid 50% of membership fees to our musicians, been DRM free, and used Creative Commons licensing. All that stays the same.
• We will continue selling commercial use licenses of our music, though in a few months we will be moving that business to a new music-licensing web site we’re building (iLicenseMusic.com).

I’m personally really excited with the change, because 4 years ago I noticed that our download sales were declining, and it wasn’t until 2 years ago that I finally figured out what people wanted. Magnatune has been going since 2003, and the future looks rosy.

Also see John’s immediately previous post with an update on the label’s work with and support of free software media players, which we first noted here in 2008.

We applaud Magnatune’s long-term commitment to CC licenses and their willingness to constantly innovate based on fan and customer feedback rather than the unfortunate standard practice — treat fans poorly and hope they continue as customers anyway. Recall Mike Masnick’s Connect With Fans (CwF) + Reason To Buy (RtB) = The Business Model ($$$$) formula for a general treatment.