I like Peter White and his music. When I have somebody tell me they can build a 50 million dollar business and they only need 500 dollars and the business involves building then selling hardware to Computer Stores, it is nice to play some relaxing music.
In looking into several music technology companies as well as thinking about this whole music ecosystem, I tried a little experiment.
Ripping CDs is a pain in the butt, iTunes, CDBaby, etc, don't have all of the albums I wanted so, presto, I just hit the world wide web and I have the 26 or so Peter White songs I want.
But, and here's the twist, I want to pay for them. Now, let's stipulate and agree I could drop a check in the mail to the physical address on Peter's web site. But that wasn't the point. That's a pain, most people would never do it, and lots of new artist probably don't get paid when people like me would do it if it was as close to friction free as possible.
RIAA
I called the RIAA :
RIAA: How may I direct your call?
me: I grabbed some music off the Internet and I'd like to pay for it.
After a ton of umm, errr, and general confusion, let's just say I think they thought it was a crank call. So, no process there to help. I checked the RIAA web site and I couldn't find a PayPal account to pay for songs either.
ASCAP
I called ASCAP:
I checked the contact us page and there are people who deal with claims, signing up for expos, newsletters, change of addresses, estate claims, legislation and jobs. But nobody to collect my forty dollars. When you call into ASCAP and ask, who can I send my forty bucks to as Peter is owed the money, again, they think it is a crank call. I tell you, folks, we have become a seriously cynical society. No PayPal account either.
Amazon.com
I called Amazon:
Just for grins I called Amazon customer service. I said "Hey, I've got some Peter White songs. Can I just have you take my money and pass it on to Peter? Why, no, I didn't but them from you, so what, you sell music, just add my money to the pile and make sure Peter gets his money." No? Really? Not set up to handle that? Okay, well, thanks.
Agency
No, not the CIA, Jim Gosnell & Josh Humiston. They run an agency in Beverly Hills. Since I'm in California and heading back to the Airport for my usual RedEye flight home, I thought I'd just drop by and see if they'd take my money. Well, on second thought, given everybody tends to conclude this is a crank and since I've seen all the Beverly Hills Cop movies, I'll skip dropping by unannounced to avoid getting arrested as some riff raff hanging out in Beverly Hills. The rental car is a sub-compact which is already causing people to stare. What? Nobody drives a Yugo in Beverly Hills?
Management
Steve Chapman (and associates) appears to be Peter's manager. No phone number but email. Sent email mentioning I have money for Peter and just need an account, paypal or something to send it to. Haven't heard back but I'm thinking my email might have had that Nigerian, I'm the son of dead motistue, etc, sound, so that's a dead end.
With the preceding tongue now removed from my cheek, I point out a big big opportunity:
I believe that most people are honest. Most people will provide compensation to those who provide value. I believe that if there was a single, simple, friction free way for people (like moi) to pay for stuff, like songs, we'd do it. Those that will steal will always do so, ignore them. I missed Boston Legal this last week because I was traveling. Thank you bit-torrent. 1 hour and presto, I was watching it. If ABC had provided it to me, I'd have watch the commercials because it is easier than using the fast forward button on the media player. They didn't so somebody was kind enough to record it, edit out the commercials and I watched it. Could ABC get one buck in the tip jar having this available? In a second.
The person who creates this friction-free way to do this will find happy customers, send money to artists, and generally have a great business.
At least that's my theory. Note to Peter: Will you take Canadian? It's worth more these days?
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.
Posted by: Marc Rigaux | October 22, 2007 at 20:03
Hey Marc and Rick, I posted a few thoughts about Fairtunes here: http://blog.mattgoyer.com/archives/2007/10/23/328. It of course deserves a more complete write up but that will need to wait for the next rainy day in Seattle :).
Posted by: Matt Goyer | October 23, 2007 at 12:44
@ 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.
www.rvibe.com
Posted by: Braydon JM | October 23, 2007 at 17:20
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.
Posted by: Randy Paul | October 24, 2007 at 06:41
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.
http://www.musicglue.com/features.aspx
Tracey :)
Posted by: Tracey DeLeeuw | October 25, 2007 at 15:07
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 (last.fm-like ?) 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.
Cheers,
D.
Posted by: David Dufresne | November 21, 2007 at 18:21