|
MP3.com: Sorry, no free royalties
March 16, 2001 3:30 PM PT
Another free ride is coming to an end for Web music, only this time
it's the musicians who stand to lose out.
As consumers grapple with content filters on Napster that may make
it harder to find free tunes on the Internet, thousands of would-be
rock stars got their own bad news Friday when Web pioneer MP3.com
said it plans to start charging for an unusual online royalty system.
Dubbed "Payback for Playback," the program gave artists
who posted music on the site a way to earn a little money whenever
site visitors listened to their music. MP3.com Chief Executive Michael
Robertson has long touted the service as an example of how the Internet
was altering the economics of the music business, offering a way
for even unsigned artists to get paid for their music.
As of April 1, the no-cover-charge model is coming to an end.
Artists can still put their sites onto MP3.com for free, but they
will have to pay $19.99 a month to be a part of the profit-sharing
program.
That shouldn't be a problem for the most successful artists on
the site, but the vast majority of musicians on the site today make
less than the nearly $240 a year that will now be required to break
even on the program. Although the program has handed out millions
of dollars since its inception, only a handful of musicians have
made any real money.
The move triggered some anger among musicians on the site, who
had come to see it as place largely free of the pressures of the
traditional music industry.
"Next they'll be charging us to be on their site!" wrote
one anonymous poster in the site's artist forums. "They're
almost as bad as the record companies at this point."
The move comes as MP3, like other music sites focusing on independent
artists, struggles to turn a business that is developing more slowly
than expected into a profit-making venture.
"There is still demand for (this kind of content) on the Web,"
said P.J. McNealy, a Gartner analyst. "The question is still
whether there is a legitimate business model behind it."
MP3.com's decision comes a few months after the Internet Underground
Music Archive (IUMA), one of the earliest music sites on the Web,
stopped its own artist revenue-sharing program and closed down many
of its other features. Other similar sites have been struggling
as well; Riffage.com, a site that allowed new artists to post their
material in hopes of discovery closed down late last year.
The new way, like the old?
The pay-for-payback model isn't unknown in the traditional music
world. Organizations such as BMI and ASCAP, which collect and distribute
royalties for songwriters and music publishers, collect some nominal
application fees or annual dues, for example.
But the Web has been touted as a way for musicians to break out
of the old mold. By reaching a potential new audience of thousands
or millions of people, artists could gain new fans and--with tools
like MP3.com's service--even turn this into a little bit of cash.
A few success stories have emerged on MP3.com's site. The top artist
on the site last year, a band dubbed 303Infinity, earned more than
$165,000. Currently, the top artist in the "Alternative"
section on the site is major-label band The Offspring, with more
than $18,000 in earnings this month. Behind them is a San Diego
band known as "Nothing to Lose," with more than $2,000
in earnings.
Few of the tens of thousands of bands on MP3.com's site make it
to that status, however. More typical are earnings of just a few
dollars a month. Artists of this level are accusing MP3.com of leaving
them behind.
"If you are like me, a poor struggling artist, the changes
that MP3.com have made by having to pay a monthly amount is more
than what I make," wrote a Tommy Deluciano on the company's
message boards. "I think that it sucks that MP3.com was for
the unknown artist and now, unless you are rich enough, there is
just no way of making it."
The change isn't geared at saving the amount of money that the
company gives out every month. MP3.com has traditionally divided
about $1 million a month among artists who reach a certain level
of listeners. That $1 million figure will be unchanged at least
for April, the first month for which the fee will be required, the
company says on its Web site.
The change could save the company significant administrative costs
and headaches, however. Tens of thousands of artists had been enrolled
in the program, with only a small percentage of them actually reaching
the level where they would be paid. But records had to be kept on
all artists.
The program has also been tarred with other monitoring costs as
the company tries to make sure musicians aren't artificially inflating
their own listening statistics.
Some musicians have been trying to cheat the system and grab more
than their share of the cash by developing bots that repeatedly
download songs or by posting band names and song titles similar
to those of more famous groups. MP3.com said it learns of such violators
by policing the system and hearing about them from other bands.
The company has a policy of aggressively cracking down on alleged
cheaters, removing their sites without paying them while looking
into the problem. Some bands have had their Web sites restored after
such action, but many others are banned. Several bands have taken
to message boards on the Web and on MP3.com's own site to complain
of the practice. But the company insists that the only way to make
sure the program provides a level playing field is to remove accused
cheaters before they divert money from bands who are playing fairly.
The $19.99 monthly fee will defray some of these administrative
costs, as well as likely reduce the number of people participating
in the program. Artists who do sign up will get other benefits,
such as more promotion in search results and a better chance to
be included in the Muzak-like services MP3.com sells to businesses.
To be eligible to receive Payback for Playback payments for April,
artists must register for the MP3.com's Premium Artist Service on
or before 11:59 p.m. PST on March 31, the company said.
|
