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October 22, 2007


Rick, a friend of mine did this a few years ago. The service was called Fairtunes, and it worked exactly the way you described. It was basically an online "tipping" service where you could designate which artists you wanted to pay directly, and Fairtunes acted as a clearing house for the funds. They would take a small transaction fee on each one, but would turn around and send cheques to the artists' management companies. They got a ton of press for this in 2000, as it was right around the time Napster was making the headlines, and P2P downloads were going mainstream. I'm sure a second iteration of this may make sense, but from my friend's experience, he would say "don't overestimate people's generosity when it comes to paying for things they can get for free." He found it to be a pretty tough model to scale and completely unpredictable.

Hey Marc and Rick, I posted a few thoughts about Fairtunes here: It of course deserves a more complete write up but that will need to wait for the next rainy day in Seattle :).

@ Marc - I might offer up that the paying market in 2007 is quite different than the exploratory "free market" of 2000 (which is still alive and well and evolving). There are more people more willing to pay now. Whether the Fairtunes model makes business sense, I am not totally sure, but I actually see a bigger problem:

What Rick is pointing to is uniform & universal licensing and a clearing house payment scheme a la soundexchange. Meaning, content owners would either have to all agree to, or be compelled to agree to a licensing agreement such that ALL content was covered. Then, there would need to be a central payment clearing house to receive and distribute payments.

I would love to see something like this enacted (as long as it also stipulated no DRM), but I am guessing it's years away. And in the US, until that happens, it's still $150k per infringemtn for selling tunes for which you don't have a license. So - for FairTunes, the issue is one of legality. If they have a licensing agreement with each artist - then it's kind of like they are doing a Radio head thing for all artists. Otherwise, they have a lawsuit on their hands.

For now, it's legwork to reach every arist. Or it's a business decision to absorb the risk and sell tracks without a license.

But I am with Rick - would love to see that happen - for us it would make selling music a whole lot easier.

As a former employee of ASCAP, I can tell you that ASCAP would not cover the licensing of mechanical rights (the rights to make a recording of a particular song). They only license the right to publicly perform the underlying work, i.e., the song itself.

Hey Rick,

Coincidently, I've been looking at music models this week - its been awhile since the Jive days when I was up on this more... but I was made aware of Music Glue and they may have the kind of features that will address a couple of your points. Since the associations don't concern themselves with this - there is room for an entrepreneurial approach. I bet if you contacted the CEO - he'd take your money and get it to the right person. Notice the paypal features tied to the artists profile and music clips.

Tracey :)

Hey Rick the meet this AM reminded me to catch up on your must-read blog.

Re: this post, what I want, eventually, is to pay for the media I consume, 50 $/month (or 10 $, or 200 $, my call really...) using something ultra-easy that would compile what I listen to ( ?) and then redistribute the 50 $ to the rights owners of what I actually consumed/listened to.

If you see that business plan please let me know. If not maybe I'll write it.



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