Magnatune is the non-evil record label who gives away 128 kbps mp3s of all their artist’s songs for free. You can then choose (or not) to purchase DRM-free higher quality versions at a price you set and they allow you to share their purchased songs with 3 friends. The label splits revenues 50/50 with their (carefully picked) signed artists, while these artists keep all of the rights to their music with a non-exclusive contract. Today, we are very happy to feature an interview with John Buckman, the founder and owner of Magnatune, to help us understand better their revolutionary business model.1. This is the question that pops up on most people’s minds: do you and your artists make enough money? You are giving away the (good-enough for most people) 128 kbps mp3 afterall.

John Buckman: 1 in 42 people who visit Magnatune buy. That’s among the best visitor-to-customer ratios I’ve ever seen. The 128k has a spoken credit on the mp3, immediately pass the song. You can legally remove the spoken credit (the mp3 is Creative Commons license and allows a derivative use) but why bother when you can buy the album for just $5. Besides, even when we didn’t have the spoken ending, we had a great purchaser ration, because I believe that people are willing to pay for music if they are buying something like like, which means a) good music for them b) no DRM, fair rights c) a company they don’t despise (for a change) and d) supporting the artist

2. Some audiophiles don’t listen to enough free music because they believe that the quality of the tracks is not as well-crafted or produced as on major label’s work is. What do you reply to that?

John Buckman: That’s why we only accept 2% to 3% of what we get submitted, because we want the best stuff, and we only release things that we think compete with major label sound quality, but in my experience the music and musicianship is at least as good, if not better, since we’re willing to give artistic freedom and a don’t committee-manage the release process like majors do.

3. How is Magnatune decides if you are going to sign an artist or not? Is there a procedure?

John Buckman: You send the music in (email to a URL, ftp or CD) and if we like it, we sign you up (and exchange of faxed, signed agreements). What we sign is what blows our mind, what we would ourselves buy if we heard on the radio.

4. What is your policy regarding playing the distributed 128 kbps mp3 versions of your music in coffee shops and bars? Do these public places need a license before they can play your artist’s music for the 128 kbps versions too?

John Buckman: Those would be commercial spaces and thus not under the Creative Commons license we use. They’d either have to pay ASCAP/BMI (evil) or get a very low cost public space license from us.

5. Let’s say that a kid buys one of your albums and shares it with 3 friends at school (as it’s allowed by your terms and conditions). Can that kid also share that album with his immediate family members (e.g. siblings, parents), or the 3-friend rule includes the family members?

John Buckman: Hey, no-one’s counting, if you want to share it with 5 people, fine, great, you introduced more people to Magnatune. The point is not to put the files up on your web site as a torrent for the world to take.

6. Are there any plans to offer statistics on individual songs, or maybe even just sell individual songs instead of full albums?

John Buckman: For now, we just sell albums because $1 songs are hard to sell on a visa card, given the $0.50 fee per charge we have to pay. We personally like albums, so that’s what we sell, and since you can pay as little as $5 or get a compilation, there are ways to get the music if you like it.

7. Do you have any plans to offer to your artists more than just a way to sell music or merchadise? For example, if you recognize that a certain artist is a rare but raw talent, would you try to find him a good producer?

John Buckman: Yes, we’ve done that before, for example pairing producer Victor Stone (who wrote and manages CC Mixter, BTW) up with C. Layne. C. Layne’s first album was brilliant songwriting, but poor audio quality, his 2nd sounds amazing. We also did this with Lisa DeBenedictis, who now has the tech chops to produce herself at a much higher level. She also knows all about CC now and is one of the top remixed artists on CC Mixter, and she participates avidly in it, as well as speaking at Creative Commons panels.

8. Do you think that the major labels will eventually “see the light” and release at least 64kbps mp3s of their artist’s albums for free, or do you think that they are in such legal and contract maggling trouble that such idea would never fly for them?

John Buckman: I doubt they’ll ever release control. If they release free music, it’ll be DRMed. They’ll DRM til they destroy their market share and other labels become the new majors.

9. What is your opinion on RIAA sueing music sharers? Are they justified to do so or over the top?

John Buckman: I love it, there’s no better way to create an audience for Magnatune than to have the majors destroy any good feelings in their audience and to be so thoroughly disgusted with the majors that people will do anything not to give them any money. It’s gotten so bad the major labels can’t even buy a Senator, they’re that despised.

10. Have any of your artists gone on to sign with other labels? Would you discourage that or do you think it is like ‘graduating’ from your label into something more mainstream?

John Buckman: A few have, but mostly we pay so much more than indie labels do (which is typically zero) a musician getting $4000 a year from us is very unlikely to do any better with an exclusive deal, except off an advance from a major indie or major label. And frankly, Magnatune is radical enough that people who want to sign up with it want nothing to do with the traditional evil music business.

11. It’s obvious that your website does a good job at distributing music to people who visit, but what types of services do you offer to help promote artists (outside of your website)?

John Buckman: Check this out.

12. There are sites out there, like this, that feature free download links of independent artists on a daily basis. Do you have any sort of affiliation program that might exchange revenue for mindhare in the blogosphere?

John Buckman: I’m not really into affiliate networks, I find that people who are paid to recommend music don’t really do an honest job. I much prefer bloggers and podcasters, and we have very generous podcasting terms (allowing, for example, commercial but poor podcasters to play our music, in addition to all the noncommercial use)

13. Finally, the 1 million dollar question: why no WMA?