A Step Toward Open Source Music

The success of open-source software has made it a symbol of a new and better cultural order, one marked by openness, freedom and peer accountability rather than private control and profit maximization over all else. But is open-source mostly a rhetorical pose, or can its core principles really work in other cultural domains, such as music?

After meeting John Buckman, the founder and CEO of Magnatune at a recent IP conference, I’m convinced that open source can migrate to other arenas of digital culture and markets. But it will take imagination, courage and business capitalization.

Buckman is a former philosophy student-turned-entrepreneur who has a string of startups to his credit. In 2003 he started Magnatune, an independent record label that specializes in online distribution and music licensing. It’s a small label that has only 200 artists working in seven major genres. But Magnatune stands in stark contrast to the major record labels, who are best known for exploitative contracts with artists, exorbitant CD prices, CDs messed with digital rights management restrictions, and bullying lawsuits against music’s most ardent fans.

It is no accident that Magnatune’s corporate slogan is “We are not evil” — a clear swipe at the malevolent moguls of the RIAA-member companies. Magnatune walks the talk. It gives artists a straight 50 percent of all revenues generated by their albums, with no opportunities for gaming the accounting or contract clauses. (The majors give 10 percent or less, and have smoke-and-mirrors accounting.) Magnatune customers decide how much to pay for an album — $5 to $18, depending on their appreciation for the album and artist. Fans can listen to the music for free over the Internet and pay only when they download it or burn CDs. The music has no DRM locks.

It’s too early to know if Magnatune can grow enough to become a serious alternative and competitor to the majors. But its fundamentals — fair compensation for artists, respect for fans, innovative music licenses — seems a solid foundation for market success over the long term. While the company cannot command the mainstream marketing and hype that Sony, BMG, et al. can afford, Magnatune is far better positioned to take advantage of efficient and trustworthy socially driven viral marketing on the Internet. And its music is increasingly attractive for licensing in movies, TV ads, workplaces and other uses.

Open-source music? Not quite, but Magnatune is a major step in the right direction at a time when nearly everyone else clings to a dysfunctional and demoralizing old paradigm.