On October 2nd, 2000, the popular P2P software company Napster was accused and sentenced for:
engaging in, or facilitating others in copying, downloading, uploading, transmitting, or distributing plaintiffs’ copyrighted musical compositions and sound recordings, protected by either federal or state law, without express permission of the rights owner.
By outlawing P2P file-sharing providers, music labels thought they were putting an end to anarchic uncontrolled distribution channel, to impose their own traditional distribution models online. At the time of the trial, 10,000 music files were downloaded every second (and growing due to the publicity of the trial). Today the new Napster is Pirate Bay: Pirate Bay’s twist is that it only tracks torrents, but you need a separate software, like BitTorrent, to download the files you find. Even though the Sweden-based torrent-tracking startup is being prosecuted for maliciously enabling illegal downloads, the illegal nature of their activity is more nuanced today than it was a few years back with Napster.
Back to Napster: the P2P phenomenon was definitely a threat for distributed artists, but it was also the greatest opportunity ever for independent artists to put their music out there, and make a name for themselves. Before Napster, music artists’ only choice was to play in small venues and sell burned CDs from the trunk of their Honda. With the viral growth of P2P sharing, a free distribution channel was born for the indie music community. Today, through P2P, independent artists are even becoming a threat to the majors’ artists popularity.
Unfortunately, being freely distributed on torrents doesn’t bring the chicken home. Along with the boom of P2P sharing came two major problems for indie artists:
- How to protect their work?
- How to monetize their work?
Protecting artistic creations has been enabled thanks to Lawrence Lessig and the Creative Commons licenses. These licenses allow creators to easily communicate which rights they reserve, and which rights they waive for the benefit of other creators. Monetization is another problem that remains to be fixed. Here on HyveUp, I covered Zivity, a professional photo-sharing site where fans’ votes are actually $1 donations to their favorite artists. The donation creates a tie between the artist and its fanbase, and their relationship can extend through email newsletters and regular blogging. Zivity is an experiment that intends to find a model for artists to live of their work.
Another interesting startup covered on HyveUp is Popcuts. Popcuts is a music store where buyers get a share of the sales on each songs they previously bought. This motivates people to spend, because the ROI could be even higher than the initial investment. Same here, this model is being experimented as we speak, so no conclusions can be drawn yet.
The music site Jamendo is yet another model for artists to monetize their work. Well, not exactly. As of today, Jamendo is a great place to distribute your music online. Once you upload your music to Jamendo, you get to share it with a vibrant community of four hundred thousand users (the userbase is for the most part European). The music on Jamendo is protected by Common Creative licenses, which means it is free to share and download. Jamendo gathers 15,000 albums and generates about 2 million unique visits a month (35,000 in the US). Last year, they received VC fundings and planned to expand their reach to more countries.
Artists can generate money through a donation program, as well as a revenue-sharing program the site has set up (see FAQs). The bigger picture is here: In France (Jamendo is based in Luxembourg), all music copyrights are managed by the SACEM, the public institution that controls music distribution and collects royalties (similar to ASCAP for example). Jamendo aims to become the new SACEM, by offering similar services, but better adapted to the world of online music distribution.
For the time being, Jamendo distributes artists’ music on their platform, as well as through torrents (including Pirate Bay). To compete against the SACEM is the company’s project to create new distribution channels, as well as new revenue opportunities for artists. Being a free music distribution channel is no holiday though. In the US, Pandora complained about the heavy fees Web radios are facing:
[…] its royalty fees this year will amount to 70 percent of its projected revenue of $25 million, Westergren said, a level that could doom it and other Web radio outfits. (from the Washington Post)
Pandora and Jamendo do not source their music the same way. However, Pandora was shot in the back because it was competing with traditional radios. By frontally competing with a public institution, Jamendo could also experience some undesired backfires.