Magnatune is...
Next-generation
record label
Combines B2C and
B2B
B2C: downloads and
CDs
B2B: music licensing
for commercial use

Main Consumer Benefits
Selected music
Full Preview
Fair price
High quality product

Selected Music
Consistent quality
Hard-to-find genres
Manageable size

Preview
Listen to everything for free
Never-ending genre mixes
High audio quality
MP3 streams

Fair Price
Pay what you want
50% for the musician
No registration

Quality Product
MP3 and CD quality downloads
Allows later re-download
No DRM

Leveraging consumer anger at the Music Industry
Limited musical diversity,
poor quality
CD prices too high
Ripped-off musicians speaking out
DRM
Symptom: using P2P is acting
as a just-cause revolutionary

How music demand is typically created
Traditional command-
and-control marketing
Grass-roots uprising
\"Customers also bought\"
Try-before-you-buy
(Magnatune’s focus)

Try-before-you-buy: the old ways
Radio
MTV
Concerts
Mix tapes from friends

Try-before-you-buy: many new ways
30-second snippets (iTunes/Amazon)
\"Concept\" compilations (\"Buddha Bar\")
Recommendation web sites
P2P used for previewing
Mix CDs from friends
Social MP3 sharing
DJ culture & raves
Internet radio

Music Biz isn't just CDs
Most music heard is not at home, but in
a business/commercial setting
Consumer shopping experience is
increasingly staged, with music
in a key role
Music is branding
TV commercials make hits
Tie-ins are increasing
Music biz becoming
like book publishing

end.