Karmafan.com - Patronage for the Internet era

macleans.ca has a report about honour system for payments working out wonders for a bakery. Here’s a snippet from the story.

John Bergen, a former potter, has two bakeries, both of them built inside old gas stations, both of them running on the honour system. Customers serve themselves then decide how much they owe with nothing but their own conscience to enforce payment. Last year, the bakeries — one in Preston, Ont., the other in Kitchener-Waterloo, Ont. — grossed $1.2 million in combined sales.

“You want a coffee?” says Bergen, explaining how the set-up works. “You serve yourself. You want a bagel? You grab a bagel. You want the bagel toasted? You go over to the little bagel cutter. You put the bagel in the toaster. You put your own cream cheese on.” A blackboard lists the prices. A coffee is $1.50. A bagel is 75 cents. Customers take what they want, then do the math in their head. To simplify arithmetic, all prices are rounded to the nearest quarter and the tax is included. “Right in front is a fare box that we got from a streetcar. You throw your money in the cash box and walk out.”There are no cash registers. There’s no tip jar. They don’t have Interac and they don’t take credit cards. “It really attracts A types,” says Bergen. Customers can be in and out in one minute without ever interacting with staff, he says.

So if such an honour system can work for bakery, what stops us from making it work for musicians, writers and artists?

Last.fm announced their revenue sharing program that allows unsigned artists to get a share of last.fm’s ad revenue. There has been a lot of discussion on blogosphere about it, here are two of the differing schools of thought.

The first says, its a ground breaking program that will help a lot of unsigned artists to get some cash to continue their work.

Since providing unsigned artists with the option to join the Artist Royalty Program in January, over 450,000 tracks have been uploaded to Last.fm and offered for free-on-demand streaming.

The second opinion was voiced on the register where it was reported that artists and some of the indie labels are complaining about the lack of transparency about the revenue shares.

Last.fm doesn’t pay most independents, and where it does, you’d need a microscope to see the royalties.

We think that indie musicians should use an excellent service like Last.fm independent of whether Last.fm’s revenue share gives them a decent amount of money or not. After all, the exposure that Last.fm can bring to an independent artists is almost as big as that on MySpace, if not more.

The biggest pro in favour of using Last.fm is that an artist’s music can be ‘accidentally’ discovered by listeners. And that is a big boon for artists working on increasing their exposure. This discovery mechanism though can be found on a lot of other services like Pandora (US only), and Imeem.

The revenue from Last.fm, if good, is then just an icing on the cake. And with last.fm taking the lead, I am sure other services will have to provide some means of revenue sharing too.

What we’d love to see though is these services providing a way for fans to ‘give something back’ to the artists. We are sure the day is not far though.

Norine Braun raised $4,280 from fans to continue her work on her album. Now that is so cool. We just hope such fan fund raisers could be more organised. Of course, Karmafan is an attempt to help artists organise these fund raisers as well.

Norine used the idea of pre sale signed CDs and selling pre-releases. I’d like to talk about another idea for such a fund raiser.

Imagine a gig where musicians play some new music and ask for support to help take the record into studio. The patron could be implicitly promised a freely available download when the recording is complete.

To make such a scenario a reality we at Karmafan built the idea of sending money to artists via SMS text messages. So you are at a gig, you like the music and send an SMS sending money to the artist. You know that when the recording is complete you can download it for free anyway.

We think such a solution is not far from being adopted, and we are providing a very useful tool for musicians to make this a reality. We are patiently waiting for musicians to come forward and try our suggested solution. If you are a musician and want to talk more about these ideas, do contact us, or leave a comment here.

Thanks to Victor from Four Stones for pointing out the story about Norine. It surely inspired this blog entry.

OhMyNews allows its users to use a tip jars allowing them to raise money from their readers.

Media analyst Kim Jae-young noted that OhmyTV relies on the long-tail aspect of micropayment for its financial independence. OhmyTV was able to raise a huge sum of money by tapping into lower 80% of on-line crowd, coupled with near-zero transaction cost on the Web, Kim said.

This is not the first time that the OhmyNews tip jar system was able to collect a huge amount of spontaneous financial contributions. In 2004, when Kim Yong-ok, a well-known Korean professor in Eastern Philosophy, published an article on OhmyNews critical of the opponents of a government decision to relocate the capital city, he saw his tip jar quickly brimming with $30,000 of hard cash paid for by nearly 8,000 contributors.

Here’s the complete story from OhMyNews.

We believe sites like YouTube, Last.FM, and all blogging sites should surely provide their content creators to use a tip-jar for raising support from their fans. At Karmafan of course we have tied the tip jar in to Facebook and will be adding support for MySpace very soon too. Way to go OhMyNews!

Insound, a online service that allows musicians to sell their albums and merchadise has started a new program called “Give more, Get more“. I quote from their site to explain what the program does -

Every time you buy an MP3 album from Insound (not EPs or singles), Insound will donate $.25 of our take to a touring band. We choose 6 lucky bands that we like, but you get to select the actual artist to earmark your quarter to. Furthermore, should you wish to “tip” additional funds to these great artists, you can add your own tip during checkout.

I found out about the program from a blog post at Idolator. As expected the comments there are raising questions about the central idea of tipping and also how Insound chose these random six bands? There are also nuances that Insound is now owned by Warner and how much can consumers trust them to support Indie musicians. I don’t particularly mind what they do with their quarter, after all it is their money.

On the other hand, what I find most interesting is that a service like Insound is using the idea of tipping to support musicians. Is this an implicit acknowledgement of the need for a patronage system for artists?

There we are - another effort to “sell” music goes under. CLIQ, a service that allows people to buy music that they are listening to on their digital radios. Thanks to The Register for pointing out the news.

The idea behind CLIQ is neat, you are listening to some piece of music on the digital radio, you like, you buy it. So why didn’t it work out? CLIQ blames it on the slow adoption of DAB or Digital radio as we call it. I think there is more to it.

It will be nice to see a Cliq like service for streaming radios on the web. Well, let’s see there already are a few, the oldest one being Magnatune, who keeps 50% cut off what you pay to buy a record.

We at Karmafan believe trying to sell music in such a way as it is profitable for the artists and all the other middlemen in between is a tad hard, if not outright passe.

Let music flow freely, there are numerous channels out there that don’t involve a middleman keeping a cut. Then let fans support the musicians - directly. That’s how the future will be.

David Sedaris talks in an interview how and why he used a tip jar at his book tour, raising $4000 from fans. Here is how David answers the question - You put a tip jar at your book-signing table?

Oh, yes. I would get there two to three hours early, and would sign books until 15 minutes before the reading. And I talk to everyone so I don’t sign that many books in two and a half hours. And then just before you start the reading part you go to the back of the room and you say I will sign your book right now for $5. And that’s how you really make your money because any one in their right mind, if they have a choice between paying $5 and waiting for four hours, would choose to pay $5.

Then once I started doing that, there was no stopping me. Because a lot of time at book stores there’s only one chair in the room and it’s behind the podium. I used to give it to a pregnant woman. I’d say if there’s anyone here who’s on crutches or pregnant, you can have this chair. But then I thought I’m giving away something I could be making money off of. So then I would say, for $20 dollars you can have this chair and be the first person to get your book signed after the reading.

…. It was like a Robin Hood thing. If I said to people, “Oh give me this money, and I’ll give it to charity,” they’re not going to give it to me. I tell people that I’ll spend it on crazy things on myself, and I do do that. But sometimes you go to a public-radio station and there’s an intern who is not getting paid, so you give them $100. Or you’re signing books and there’s someone who looks like they could use $50. So you say, you look like you could use $50, and you give them $50.

Read the full interview where David talks about the tip jar gimmick here on Newsweek (thanks to “Collection Developments” for pointing out the interview).

Now, if we translate this gimmick to the Internet and imagine an musician instead of an author. Where would you use the Karmafan tip jar? Next to where your music is available? Will you mention your Karmafan home page during a concert? On gig posters? On the back of CD covers? With the mp3s that you are making available on the Internet?

Time for a poll on our forum. The question is, “Where will you put your Karmafan home page address?“

We’re pleased to announce the launch of Karmafan on Facebook. With 70 million users worldwide, Facebook is a great way for artists to gather support from fans. Facebook also automatically spreads the word to your friends when you give support.

If you’re already on Facebook you can add the Karmafan application to show your friends which artists or sites you have supported. Now you can support or invite artists and sites without leaving Facebook - each time telling your friends who you have supported with Karmafan’s Facebook news feeds.

Even if you aren’t on Facebook you already have a Karmafan page on Facebook at http://apps.facebook.com/karmafan/fans/profile?name=anonymous

Let your friends know who you support - install the Karmafan application on your Facebook profile:
http://www.facebook.com/apps/application.php?id=6407661474

If you are an artist or a musician just add a site to your Karmafan profile to start receiving support from your fans on Facebook.
http://karmafan.com/account/seek_patrons

See examples of how Karmafan fits into your Facebook profile:
http://karmafan.com/site/facebook

Discuss the ideas behind Karmafan or get help: join the new Karmafan
Forum at http://forum.karmafan.com

Kevin Kelly had some very positive ideas about the value of 1000 True Fans, but today he posted a piece about what happens when you’re an artist who finds they don’t seem to have 1000 fans, as Chris Valenti discovered when he realised his dream and recorded an album?

Every independent music artist shares the same experience. They are excited to record their songs and receive their first 1,000 copies of their new CD. After selling some to their fans, giving out others to their family and friends, and sending out copies to various music industry and media people, they then share another experience every other artist has: What do you do with the other 800 CDs still sitting in your living room?

Find out more at 800cdsthemovie.com or watch the trailer on YouTube.

Why are musicians so fixated on the idea of producing a CD that they’re willing to invest that much money in plastic they then have to sell, when all they need to do is record their work and release it over the Internet?

The Guardian had an article in their G2 section today about how Chris Anderson, editor-in-chief of WIRED, is convinced that free is the only way to go:

On the web, the marginal costs of manufacturing and distribution are zero, or close to it. This means that you can now experiment with giving away one thing to sell something else much more than you could in the pre-internet era. The traditional model is of giving 1% of goods away as samples in order to sell 99% of the product; on the web, you can give 99% away as free samples to sell 1%.

When it comes to music, the idea is that a band can gain popularity by giving music away, which creates new fans who will then tell their friends, buy merchandise or attend concerts.

Anderson’s last book, The Long Tail: Why the Future of Business is Selling Less of More, argued that it’s possible to thrive by appealing to niche markets. His next will argue that the future of economics is inevitably free:

In every industry where the product can be made into a digital file, somebody is, or is going to be, offering you that product for free because the marginal cost of doing so online is heading towards zero. Divorce papers? Free. Books? Music? Free.

He doesn’t see this as negative. Things have changed, as they always have. Money will continue to flow, but now the barriers to being heard and noticed are so much lower, and that has to be a positive environment for creativity.

Check out the full article by Stuart Jeffries at guardian.co.uk.