Case Studies/Magnatune Study
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Overview
Magnatune, a record label founded in 2003, is a pioneer of open music, the most successful attempt to embed Creative Commons (CC) licences in a sustainable commercial venture, and an early adopter of variable pricing. Initially conceived as part online radio station, part retailer and part licensing-suite, the business model continues to evolve in response to consumer and technology trends. Magnatune makes non-exclusive agreements with its artists and gives them fifty percent of any proceeds from online sales or licensing. All track available on Magnatune come without DRM and buys can set the price they wish to pay for an album. Magnatune represents the most successful attempt to embed Creative Commons (CC) licenses in a sustainable commercial venture.
Magnatune uses unconventional means to create the fan base, and then monetizes it via the traditional — though updated — methods of selling downloads and commercial licensing rights.
Magnatune has been a leader in implementing the CC+ protocol. Lisa DeBenedictis is a popular music on Magnatune. Debenedictis released an a capella version of "Girl and Supergirl" on ccMixter. The a capella vocals were remixed into 76 songs, and Magnatune picked the best remixes at the time for "Mixter One", an compilation album where Magnatune signed distribution agreements with all the chosen remixers. Both the remixers and the original musician (DeBenedictis get paid for sales of the compilation.
One of the remixes from "Mixter One" was then picked up as a commercial license by a bicycle company for a promotional CD, which they in turn sell.
License Usage
Magnatune advocates for "Shareable music" -- a distinct forking from the standard, ‘all rights reserved’ approach, because users are permitted to — rather than prohibited from — distribute further copies of the track. These permissions are signaled to users by the CC ‘Attribution Non-Commercial Share-Alike’ licence. In this case, permission to share also allows users to listen to the entire catalogue for free via the website’s 128kbps streams, as well as to download the 128kbps MP3 files themselves by clicking the “license” and then “non-commercial (Creative Commons)” button.
