Membership without obligations

In a previous blog entry, I wrote about how you can now choose how much you want to pay for an all-you-can-eat Magnatune membership. These memberships let you listen and download everything on Magnatune, without any limits.

From today on, you are no longer required to commit to a 3 month minimum: you can have as short a membership as one month.

Also, since the majority of people pay for memberships using Paypal (vs credit cards), we now support Paypal's recurring payments feature, so that you can choose to auto-renew, yet retain total control over billing by being able to cancel from within your Paypal account.

I've been working with Leah Belsky (from open-source-philosopher-guru Yochai Benkler's group), to phase in each change at Magnatune in a controlled-experiment kind of way, so that both Magnatune (me) and the academics (Benkler's group) can get data that is meaningful, quasi-scientific and which hopefully leads to insight.

The final step in this transition happened today.

Memberships to Magnatune are now:

1) no commitment: one month at a time, whereas previously the minimum was 3 months

2) pay what you want: you fill in the amount you want to pay (no drop down box), though there is a $5/month stream membership minimum, and $10/month download membership minimum.

3) paypal recurring payments: use paypal recurring payments instead of a credit card, so you are completely in command of your membership, and can cancel it from Paypal if you like.

4) non-recurring and recurring both available: you choose whether you want your membership to auto-renew, or if you want to renew it by hand yourself

5) DRM free, Creative Commons licensed, and perfect audio quality: so you are free to enjoy our music as you wish

6) shareable music with your friends: you can share music you've obtained from your membership with your friends, though we ask you to be mindful of our business model and recommend you share no more than one album per friend per month

7) Everything: complete access to all our music. Downloads, 4h podcasts, streaming, iTunes & Amarok & Rhythmbox & Songbird support, and more.

8) Musicians get paid: with everything you do, 50% of your membership fee goes to the musicians you listen to. Magnatune remains fair to the musician.

This is no "fire sale", this is a post-scarcity business model that we have been adopting, and let me say that it's been working really well for us. I'm continuing to see a lot of people join as Magnatune members, and can proudly say that each day, we make twice as much money from our memberships than from our download sales. Memberships have quite literally turned our business around, so that we're growing strongly again.

We're simply continuing to face the "Internet Reality": a world where everyone has more music than they know what to do with (from Bittorrent to Last.fm and beyond). The way to compete in this new world is not try to create artificial scarcity, but offer something better than what is available for free, in all ways that we can think of.

In other news, we're putting the finishing touches on the Magnatune iPhone Application. You'll be able to listen for free to all Magnatune albums. Non-members will hear my slightly-annoying voice at the end of each track, telling you what you just heard, while members can enjoy all our albums, commercial free, on their iPhone. Assuming that Apple accepts the application, it'll be an easy download from the iTunes Application Store.