Karmafan.com - Patronage for the Internet era

Following in the steps of Paulo Coelho is Leander Kahney, the writer of Cult of Mac and Cult of iPod. He and his publisher decided to release the books as torrents on The Pirate Bay, partly after reading Free! Why $0.00 Is the Future of Business in WIRED.

His publisher explains that “logic tells me that if we increase the visibility of our titles, we’ll sell more books.”

Maybe writers can avoid the problems facing the music industry if they embrace change.

Ars Technica has a short article about how some indie labels are choosing to do their own distribution rather than use iTunes, which means that “Steve Jobs doesn’t get his pound of flesh”. And they point out that things aren’t as bad as the major labels might want you to think:

While the declining major label revenues might generate headlines that sound like the good ship Music is about to be boarded and sunk by P2P-wielding pirates, the larger story is that there’s more music than ever in the world, and more ways to get it in the hands of listeners. That should be music to any fan’s ears.

But they admit that it’s not that easy to run your own store, as with “the increased revenue per sale comes responsibility for the infrastructure, for keeping the site up, for dealing with payment issues (not to mention the upfront cost of building the store)”.

Seems like just another reason for more artists to make full use of existing distribution systems (just do what Trent Reznor has been known to do and upload the album straight to P2P networks) and trust that fans who love their work will support them. Maybe include a text file with the tracks suggesting that they can support you if they like the music. The fans get the music faster and easier, while the artist/label doesn’t have to invest in servers and online payment systems.

That was the model we envisaged when we started Karmafan. Artists could simply focus on their work while alternative distribution models get the music to the fans and the Karmafan widget or profile allows those fans who really like the work to give something back.

If you take control of the situation and decide to take advantage of how easy it is to get your albums out there - like Lamont and a lot of other bands who recognise an opportunity - then you could well see a surprising return both in voluntary payments and increased popularity - which leads to gigs and concerts. Make music because you love it. Make lots of it. Let people hear it. Trust your fans.

The Sherlock Holmes series of films with Basil Rathbone and Nigel Bruce has been a favourite of mine since childhood. They were often shown on a Saturday afternoon so I decided to revisit one today. Sherlock Holmes Faces Death is an adaptation of The Adventure of the Musgrave Ritual set against the background of the Second World War. If you enjoy old movies, then you can’t go wrong with them (you can watch Sherlock Holmes and the Secret Weapon for free at the Internet Archive).

At the end of Sherlock Holmes Faces Death, Rathbone delivers a short speech which seems particularly relevant to Karmafan:

There’s a new spirit abroad in the land. The old days of grab and greed are on their way out. We’re beginning to think of what we owe the other fellow, not just what we’re compelled to give him.

Of course it didn’t really turn out to be true in 1943, but perhaps we can make it true today by thinking of how we can all give something back.

Seth’s blog has an amusing piece on “how many record execs does it take to screw in a lightbulb?”.

Trent Reznor was critical of the Radiohead “bait and switch” release of In Rainbows when he talked to triple j this week. He felt that that it was just marketing for their traditional release and sale of the album, with a low-quality version being made available for a limited time before the CD was released. This is in contrast with NIN’s own Ghosts, which is offered in high-quality lossless formats (although only the first volume is free, which might account for the fact that currently the third result is a link to the full album on The Pirate Bay when you do a search for “Ghosts NIN” on Google).

It’s interesting that he also mentions the high cost of paying for the distribution (including website, bandwidth, payment options, support) of Ghosts. This does make it seem very attractive - especially for less-established bands - to use the distribution methods already in place to release an album. NIN could just as easily have made Ghosts available on P2P networks, although they would of course have had to ask that their fans choose to support them. Perhaps they would have done just as well with that approach, and they would have avoided “all the things that have nothing to do with music”. But it’s certainly true that NIN have offered a very fair deal with Ghosts, one which was undoubtedly influenced by Reznor’s feelings towards the behaviour of record labels. His reaction last year to finding that his own label was overcharging was to tell his fans to “steal it”.

Reznor had even harsher words for the record industry:

They lent me money. When I paid that money back they owned the record. They made the largest share of the profits from the sale of that record. I will never shed a tear to see that dynasty crumble. It’s long overdue. The level of ineptitude that I’ve seen displayed at major labels is stunning. The people in charge of a lot of the digital technologies and the aspects that are decimating their business … are people that seem to not even be on the internet … for them to, right now, in 2008, be considering brokering deals with download sites … you’re five years too late.

You can hear the full interview here

WIRED reports that he RIAA is “seriously considering a file sharing surcharge that internet service providers would collect from users” in order to profit from piracy.

While the idea of an extra $5 a month being added to broadband bills and paid to artists isn’t without its merits in an ideal world, there are a number of problems. The RIAA will be collecting the money on behalf of artists, who must then, I assume, join whatever organisation they set up to disburse the collected funds (with a certain amount deducted for “administration”). You could argue that it sounds very much like a protection racket. They collect the money by threatening legal action, then charge artists to receive their share. Can the RIAA be trusted not to enforce restrictions on the free expression of the artists? And to be fair in their division of the spoils? It sounds like they might at least distribute based on popularity on file-sharing networks, but who will collect these results? And will they disqualify some networks - such as the Pirate Bay - because of legal reasons and decide that only “authorised” networks count?

Ars Technica has another good point: “if $5 on your ISP bill gets you access to music, can the day be far off when another fee appears for movies? For e-books? For cross-stitch patterns?”. It could be a very long list. Will broadband access become a luxury which only some can afford?

It seems like such an inelegant solution. Out-of-date. An industry has a problem so they call for taxes to be levied to subsidize their business. The thought of $5 (or €5 over here, as they would no doubt round it up) on my bill every month being used to support the latest industry-manufactured band doesn’t make me very enthusiastic about the idea. I, for one, would prefer to choose which artists to support.

Essential reading from Kevin Kelly on how fans are vital for artists:

A creator, such as an artist, musician, photographer, craftsperson, performer, animator, designer, videomaker, or author - in other words, anyone producing works of art - needs to acquire only 1,000 True Fans to make a living.

It’s a refreshing reminder that artists can make a living doing what they love, and that success can simply mean reaching out to a small number of people - something which is easier every day on the Net.

[via Seth Godin]

There is a big difference in what Radiohead did and what Reznor is doing in terms of experimenting with music distribution on the Internet.

Radiohead allowed fans to download their music for free and kept the option open to receive voluntary payments. In doing so, Radiohead realised that music distributes itself and it is hard to control its distribution. What they did was to open a new channel through which fans could support them - voluntary payments. The side effect of voluntary payments was that there was no cost associated with attaining the piece of digitized music. Fans were showing their appreciation by making voluntary payments and not just “buying music.”

What Reznor has done instead is to force people to pay before they can download the music. The first volume of Ghosts is available for free, but the rest of the album does cost money - even if it is a very reasonable $5. This changes the relationship between NIN and their fans into a transaction, so that the fans again feel that they are “buying music”.

The Register points out that

the downloads from Reznor’s official site were trickling out at 10kbit/s. From the Torrent swarm, you get the music at between 450kbit/s and 550kbit/s, or fifty times faster. The high quality bitrate version takes just 15 minutes to acquire.

So Reznor’s site is unable (which NIN did admit) to keep up with the “sales.” What do desperate fans do? They borrow from their friends - on peer to peer networks. And it’s worth pointing out that a lot of those fans would continue to seed the tracks, effectively acting as distribution channels for the album. Now only if they could just make a simple voluntary payment to Reznor - no matter where they got their music from. Would that bring more money to NIN for future works?

Apart from all these practicalities I believe there are differences in perception too. Maybe people respond differently to a price tag on works of art that can be digitally distributed? Maybe they like to decide what they’d like to give back, as appreciation, as patronage?

Free distribution and voluntary payments - with the two channels completely divorced. That is what we at Karmafan believe - and so do many musicians on MySpace and bloggers all over the Internet.

NIN is giving their fans a few options when it comes to their latest album. The first volume has been made available for free on torrent networks, with the complete album available in packages ranging from a $5 download (in a range of formats - including high-quality MP3 and FLAC) to a $300 Ultra-Deluxe Limited Edition.

Trent Reznor continues to show that he’s willing to experiment with this release. The album also sounds like it will be part of a continuing series, with the promise that “more volumes of Ghosts are likely to appear in the future”.

[via TorrentFreak]

Aaron Schiff started an interesting experiment the other day at 26econ.com:

What if you could make a micropayment simply by clicking an attractive button. I’m interested to know how much people would tip if it were that easy to do. For the next little while, you’ll see a set of buttons underneath each post. After reading the post, I want you to click the button corresponding to how much you’d tip me for that post. If you think it’s not worth tipping, don’t click any button.

The problems Aaron points out with exclusively using methods such as PayPal to tip (”it costs too much to transfer money securely, and it’s too much trouble for users”) are some of the reasons we decided to go with the top-up idea for people who want to use Karmafan to support more than one artist or site. Allowing a fan or a reader to support what they like without worrying about transaction costs seems like the best way to encourage multiple small acts of patronage.

We’re looking forward to seeing the results from the 26econ.com experiment.