Matt Goyer: Fairtunes

Alexia from the University of Miami wants to know how much we sold Fairtunes for.. We sold it for something like $x in cash but have so far received only $x/7 while our lawyer also received about $x/7. Sadly there's a slim to nil chance we'll receive the remaining cash unless you can find someone to fund these guys. We got some stock too but it's only worth something if we could find someone to sell it to.

And you thought we were now rich and famous. Hah! :)

K5: The Future of K5, and the First Ever Kuro5hin Fundraising Drive has already raised $21k in the first day!

Now that's a voluntary payment bonanza if I've ever seen one. ..I can think of one company in particular for whom it might make sense to go the K5 non profit & fundraising drive way.

They did run a picture

Finally! A big thanks to Scott who found and then scanned the Fairtunes article in Time (he says it's from the May 20, 2002 issue).

[insert snarky comment(s) about photo below]

Fairtunes, now, Musiclink is back online after a two and half month outage. I tried to send money but it wouldn't let me create a new account so I don't know if it really is 'back online' or not.

First impression: All the flashing stuff and the splash screen is pretty annonying.

Second impression: The old Fairtunes fully disclosed a lot of information such as who made payments, where they went, what percentage we kept ($0), what percentage went to the payment processor... After 10 minutes I haven't found that information on the new site. Thanks Mark, looks like it's 30% that Musiclink takes.

Third Impression: There is no new functionality. In fact there is less since you can only do transactions with PayPal when previously Fairtunes accepted CDN & USD Visa.

Fourth Impression: In fact Fairtunes was founded in May 2000, incoporated July 2000 and subsequently launched at the beginning of August 2000. John and Matt than sold the majority of Fairtunes' assets in September of 2001 and the new owners subsequently re-branded Fairtunes as Musiclink during January 2002. So the FAQ is off by a year.

More impressions along with an entertaining digest to appear once CS360 is put to bed.

Rumor has it Fairtunes aka Musiclink might go back online tomorrow after months of outage. (Remember: John and Matt are no longer involved with Fairtunes). Of course I'll believe it when I can send money to all the artists I've had to hold off sending money to. And we'll mark the occasion by publishing a little digest I've being compiling over the period of the outage.

USA Today: Kazaa, Verizon propose to pay artists directly (via Jenny)

"An unlikely alliance of swap-service Kazaa and telephone and Internet giant Verizon is floating a proposal to break the logjam of lawsuits: Computer manufacturers, blank CD makers, ISPs and software firms such as Kazaa will pool funds and pay artists directly.
'Historically, there's been a clash between the content community and new technology, back to the player piano,' says Verizon vice president Sarah Deutsch. 'We're proposing the idea of a copyright compulsory license for the Internet, so peer-to-peer distribution would be legitimate and the copyright community would get compensation. It's hard to get the genie back in the bottle.'
Kazaa lobbyist Phil Corwin says a $1-a-month fee per user on Internet providers alone (it's unclear whether costs would be passed along to subscribers) would generate $2 billion yearly: "We're talking about a modest fee on all the parties who benefit from the availability of this content."
Recording Industry Association of America president Hilary Rosen calls the proposal 'the most disingenuous thing I've ever heard. It's ridiculous.' "

Pay the artists directly!? Where have I heard that before! :)

I contend that it makes more sense to not pay artists at the time of download. My main reason for this is that I won't know till after repeated listenings if the song is worth paying for. This is backed up by the many studies that show music downloaders delete x% of what they download so why should they have to pay for it?

It was this belief that lead us to develop a Winamp plugin (which of course doesn't work anymore) which allowed you to pay the artists directly from Winamp. There was even a feature which tracked (locally) what music you listened to the most so you knew who to pay.

In hindsight it makes more sense to couple payment with downloading because the concept of paying after you've partialled consumed is a little too abstract for your every day downloader.

Re-reading the article I believe it was poorly written/reported since the RIAA would be completely in favor of a tariff on Internet usage. Of course they oppose a tariff that would be paid to musicians directly since through their legal wranglings artists no longer own the copyright to their own work. The real owners of the vast majorirty of our 'music culture' are a handful of companies. But of course the story reads better if the RIAA is the bad guy.

If Dave links to it, it must be a good quote :).

I said: "We'd love record labels to just go away. They're great for a Britney Spears, but I don't see them providing a lot of benefits for smaller acts." (from The Time article). If you disagree I'd love to hear why.

Needless to say the article did not run in the Canadian edition of Time. Do they not realize that *I AM* Canadian content? Hopefully Gary can pick me up a copy or 5 to see if the results of that 5 hour photo shot made it in.

Time Magazine: Dealing with Download Guilt: 'Fairtunes.com's honor system bypasses the record labels'

It's a shame that people can't actually visit the Fairtunes site and send money like they could in the good old days. Live and learn.

Time for my nit picks with the story:

Where's John!? He was that 'buddy' in the car, he quit his job, he wrote the code, it was his basement we crashed in. It's disappointing he got written out of the story.
Some people feel guilty but we didn't start the site because we felt guilty. We started the site because we wanted to pay the musician and there was no system to do so.
Did the reporter actually try and send money? Because if he had he would have seen that the new owners have disabled sending money and changed the name to Musiclink. (But really, it took us 3 weeks to write Fairtunes.com, how hard can it be for the new owners to needlessly re-write the site in PHP??)
No Emergent Music coverage
Doesn't mention that we're University of Waterloo students

Though is there a picture accompanying the story? (Email me if you've seen the paper copy of the magazine).

Time has another longer story: Burn, Baby, Burn.

This coverage is pretty love-hate. I mean it's great to be in Time and all but Fairtunes just isn't ours anymore. I'd much prefer to see an article detailing the failure of John and Matt to offload the assets in a responsible manner.

Fairtunes has been covered by Time Magazine before though I never saw it. Fortunately you can search back issues but unfortunately you have to pay. So I just paid $2.50 to find out that the previous Fairtunes mention consisted of nothing more than this:

Fairtunes.com
www.fairtunes.com
Pangs of conscience? Fairtunes provides an easy way to send money to the artists behind your MP3s

(For future reference: That first mention was on October 02, 2000 in the 'Gallery of Stuff' by Adam Cohen). Fairtunes was also mentioned in the Time Digital article Where To Go... (Nov 2000).

Me: You get the point.

Curt: 'Maybe I'm dense and maybe this was your point, but didn't you end up agreeing with a lot of slashdot's critique of fairtunes?'

I've ignored Curt's email for a week now. It's probably time for a response. So here goes. What follows are 5 critiques of Fairtunes and my response:

We'd never actually send the money to the artists: Disagree
We sent money to artists so I obviously disagree with this assertion. Though that said there is still a lot of money that hasn't been sent because it's not cost effective to do so (it'd cost more to send then the amount we're sending)
How would *we* find the artists: Agree
We did a pretty good job of tracking down artists but it was a very time consuming job often involving expensive long distance phone calls and dealing with arrogant management companies
Tipping will never work: Undecided
The jury is out on this one though I must say that Amazon is doing a pretty good job at it.
Our business model wasn't viable: Agree
You have to bring in a lot of money to make the business work. When I say a lot I mean 10's of millions of dollars.
Our costs were too high: Agree
Even in the 21st century it costs a fortune to write and process a payment to an artist (~$2.50 an artist in disbursements PLUS labor).

But why Fairtunes did not succeed was because there was never enough buy in from either the fans or artists. Yes we had fans who sought out Fairtunes to send money to their favorite bands, and yes there were bands who stuck a Fairtunes button on their page but we never succeeded in showing that tipping could be wildy successfully for a band.

Something that I never thought of but what Gary pointed out to me was that Fairtunes was not setup to benefit from Metcalfe's law that states the usefulness, or utility, of a network equals the square of the number of users. While users who sent money made our totals go up it didn't result in any sort of snowball effect of more money coming in. To bring about some sort of network effect we would have had to have created some sort of tie between fans and artists that superseded that of simply a financial transaction so that there would be that feedback loop which would cause the network to grow.

And of course at the end of the day it's fairly simple to disintermediate Fairtunes who was trying to disintermediate the record companies. We recognized this problem and had several ideas of how we could add value to the chain so that artists and fans would be motivated to use Fairtunes as a solution but we were unable to implement them before we ran out of steam and unfortunately it seems that the 'new Fairtunes' is going off in a direction that allows again for themselves to be easily disintermediated.

The New Patron: The Source for Patronage Services on the Internet

What is the future of the digital music industry? The same as the music industry was in the past: Commission-based. Now anyone can commission any Artist to produce the music that they want. 100% of the money goes straight to the Artist, and the music is made available to everyone on the internet immediately after it has been produced! There are no distribution control issues because the music released will be public-domain! The music can be legally distributed in any way shape or form by anybody.

This isn't a new idea.

Idealive has already tried and failed at exactly the same model. Something I find quite humourous is that Esther Dyson wrote an article about 'Music on the Web' and mentioned both Idealive and Fairtunes and she wrote that had an interest in investing in one of the companys. Of course that company turned out to be Idealive, not Fairtunes. But the funny thing is that Idealive went broke long before we did or maybe they just had a better sense of when to pull the plug.

But regardless of previous failures in the same space, I'll keenly watch The New Patron. If for nothing more than because I need a replacement for Fairtunes (because you can't send money any more).

And here's Cynical Matt:

A lot of people like to talk about the honor system/tipping/voluntary payments/patronage, hell there's even an April Fool's joke going around about it today, but let me tell you that very few people have opened their wallets and put their money where their mouths are.

And yes, I can tell you that because we opened our wallets and gave it a shot.

CNN, the New York Times, support from Esther Dyson, the Globe and Mail, Much Music, Wired, Slashdot, you name it, they covered it. All we managed to snatch up for artists was $15,000. Whoopty-do.

Moses Avalon's royalty calculator (via MeFi).

The Tragically Hip Live at Lee's Palace in Toronto, Ontario.

To get the show from Peter @ Live Hip I donated some money to The Hip Fan Camp Trillium Fund and so I ask that if you enjoy the show that you donate as well.

This just goes to show that not all 'pirates' are evil. And did you know that when we (in our capacity as Fairtunes founders) write a cheque to Ani Difranco it's not to Ani it's to her foundation? Yet another indication that we shouldn't lose all hope for the music business.

Dave would also pay for music if the music industry let him. That makes two of us. And so Mary asks what about EMusic?

What about EMusic? When it first burst onto the scene we rejected it for four reasons:

Selection
Cost (it used to be pay per download and I think it was $1.50 a song).
Encoding rate (was 128kbps)
Questionable artist compensation (we enquired what the artists got of our $1.50 and they had no clue what we were talking about)

To be fair and to inform you guys I just spent some time on the site. First impressions:

Improved fee structure. All you can eat is good.
Canadian Friendly. Many of the new services are available only to Americans. EMusic has no such restrictions.
200,000 songs available. Sounds like a lot eh? Try plugging in your top 5 favorite artists and see how many songs they have available for download. I counted 2.
MP3s! All songs are in MP3 format which of course rocks, but they're..
Low quality. While many don't mind if their songs are encoded at 128kbps the consumer who is willing to use their credit card online probably does care about quality. I'd prefer to see at least 160kbps.
They compensate artists!. From their faq: 'EMusic splits all of the profits from membership fees 50/50 with the label or artist.' (Of course we don't know how much the label splits with the artist...)

But hey, if EMusic has what you're looking for your search for music online is over. Of course the astutue reader like Mary will notice that EMusic is now owned by Vivendi who also owns Universal (see David's chart). Of course wouldn't it be nice if Universal content were made available in MP3 format on EMusic? I'd pay for that instead of using Pressplay, an online music subscription for which Universal provides content.

Are there any EMusic subscribers amongst us? Anyone have an experience they want to share?

I was a little hesitant about posting that music & porn industry post but it looks like I'm not so far off. From The Guardian: Why sex still leads the net (via Dazereader).

Ashe is something of a pioneer: a porn star who has crossed the wire. Although known in internet circles for some time as that rare breed - a profitable e-entrepreneur - other dot.com executives were initially reluctant to welcome the porn model into the fold. But as other companies struggle to emulate her success, Ashe has found herself in demand as a technological consultant and keynote conference speaker.

Of course not everything is as rosy as can be in the porn business according to an article last month in Wired entitled The Naked Truth.

~~About time~~ Cool ~~Fairtunes~~ Musiclink has passed the $20,000 mark. Though $5800 of that is Strange Flavours (a video game company).

Fairtunes.com on August 15,2000.

I must say that our original design with our original logo has been my favorite iteration. Feel free to explore Fairtunes through the ages.

Fairtunes.com has been renamed to Musiclink. Please send your pleas to change it back to contact@musiclink.com or bitch freely in the comments below and I'll forward them on.

We took the Fairtunes name from John's basement to the front page of the Globe and Mail and on to the New York Times and CNN. It's a name that people know and recognize and expressed our mission statement more succintly then a paragraph crafted by a team of marketing drones ever would.

The evidence of the 'success' of the Fairtunes brand and the unfortunate choice of switching to Musiclink is in the Google search (Google really does know all).

Fairtunes: 13,700 results all of which refer to our Fairtunes
Musiclink: 8,740 results NONE OF WHICH refer to the 'new Fairtunes'

Today marks the end of an era (well at least a year and a half).

As we pulled away two nights ago from the farm after a monumental day John queued up 'Another Midnight' by The Hip (lyrics, stream).

Yup we're still in upstate New York trying to figure out the future of Fairtunes and our lives for the next 4 months to a year. I've been pretty silent about what's going on. I don't know. I just didn't want to talk about it but I do now as John and I sit here bored in the barn (see the photo from our last NY trip).

We're trying to decide if we should:

Sell it and join the acquiring company to take Fairtunes to perhaps the next level
Sell it and move on (i.e. John goes to school, I continue as a founding employee of Transpose)
Find another buyer or sponsor
Keep it to our greedy selves

We don't know what the right decision is and as a result we're pulling out our hair and going crazy.

There was a point when we'd do anything for money. Now we're a littler bit older and a whole lot more jaded. Will a new company even be able to raise the money we need? Will we raise the money just to blow through it and end up shutting down in 6 months? Is money the magic answer to Fairtunes' problems? What is Fairtunes worth to us? How much longer do we want to be involved? Of course, what is the future of voluntary payments in general?

Last night we flipped a coin to decide the outcome. Would you trust your future to a measly 25 cents?

Do you care? Go vote on the future of my dot.com.

Just got off the phone with Larry. I think we set a new record for our longest phone call. As always he's given me a lot to consider, though in situations like this* he always tells us to Have Fun and to Ride the Tiger.

*(footnote): A lot of crazy stuff involving my present employment and Fairtunes is going on. All will be disclosed when the time is right.

Want the low down on the music and voluntary payment scene? Check out Music Tech (link now fixed :) ). It's a great history of the past few years.

Gospelcom.net, a Campus Journal Daily Devotional for College Age and High School people, has an article on Making Restitution in which they mention Fairtunes and a 5 step process for receiving God's forgiveness for dealing with guilt. A.k.a. Downloading MP3s.

Thanks to John's Jen for pointing this article out, but, I don't think it's the cause for renewed interest in The Tunes.

The article ends with, 'Fess up - then pay up!.

There's been a renewed interest in The Tunes this week. What's up with that? Was there some news article about us that I missed? But thanks, lots of recommendations are rolling in.

Well, big changes are in store. Stay tuned. And hopefully everyone will get their Fairtunes wish.

Boosting Java Performance.

First Monday: Giving Away Music to Make Money. Sounds like something we've been advocating for a year.

Seeing as it's a long article that I doubt you'll read, here's the bit on voluntary payments:

Streaming audio and video allows you to charge on a pay-per-view basis, a constant revenue stream provided the content meets consumer demand. Software could also be used to allow fans to donate funds to musicians based on the number of downloads completed. If fans are pleased with the music they hear, they can provide feedback to works in progress, and form an emotional bond with the artist. They can also support a musician financially with a credit card donation to a third party donating company, who in turn will pay the artist cumulative donations at some fixed period. Eliminating the album concept means that fans can contribute directly to the artist, not the music label, and thus provide the artist with a greater percentage of revenue than is possible under existing traditional contracts. The fact that artists are willing to provide the music for free adds an incentive for fans to treat them fairly.

But, so, great. We all agree that there's a problem, and that voluntary payments could be a solution. But is it a profitable solution for the third party who implements it??

That is *the* question upon which my future depends.

Someone just sent $300USD to Halley DeVestern w/The Tunes. Crazy eh!?

If you check out her SHOW YOUR LOVE page you'll see that since this person sent more than $50 they'll get their name added to the CD insert. Now that's a neat idea.

Somedays (like today) I wish we had never got in the car with Jamalio to go to the BDI. If we hadn't, Fairtunes wouldn't exist and I wouldn't have that nervous flutter in my stomach that I do now.

So, Go big or stay small? Please advise.

Webnoize is running a story entitled 'OpenNap Server Operators Challenge Canadian Copyright Law' and the teaser is (you have to pay to read the full story (or email me)):

Refusing to disable a web server that enables copyrighted music file sharing, two Ontario college students hope to inspire debate in Canada over how the government should handle online copyright reform...

My favorite line of the article is this Brian Robertson quote:

If our legal people didn't think there was copyright protection in that area, we wouldn't have sent the letter in the first place.

I beg you to find a reference to any Canadian law in their letter to us.

The article also refers to Canada's third world like copyright laws, and the fact that Canada has the highest per-capita use of file-swapping services.

The funny thing is that when the reporter called I just spouted off like I normally do and didn't actually think they were going to run a story.. But they did since one of the New York guys mentioned it during our meeting.

Here's a treat for you all. It's an email from the Canadian Recording Industry Association asking our ISP to please shut our server down because we are running a 'Napster like service' (aka OpenNap). View the absurdity.

Upon receipt Richard at WWW called me and said he'd be forwarding the email to me and that he'd like to be CC'd on our response back to them. More importantly he said that they wouldn't shut us down till they receive a court order requesting them to do so. Now we all know that in order to do that CRIA would have to take us to court and it'd cost a million dollars (for them). So our plan, I guess, (John is on his way over to strategize (not really. just to party and get drunk)) is to send a nasty email back in effect giving them the finger. Of course they're welcome to sue us but there's the whole million dollar issue and well we'd have a media field day with it in true Fairtunes media style.

Send your thoughts if you have any.

And notice the disclaimer at the bottom of the email about intended recipients and all that other legal bs. So, *please* take note and don't show it to anyone!

Kick now has Fairtunes support! What does this mean? It means if you have the Kick client installed sending money to your favorite artists is only a click away. Supported clients include: Winamp, Napster, Real Jukebox, Windows Media Player, Music Match, Sonique, BearShare,... So really you have no more excuses! (Besides the fact we don't support MasterCard..) Install the Kick client and support your favorite artists.

Thanks to Rob Lord and Matthew Skyrm over at Kick for making this happen.

Just got off the phone with Aimee Mann's manager because later today at 5:45 I'll be on CTV's TalkTV via webcam for a Napster chat (if you want to tune in watch the feed from their site not mine).

So I'll be talking about all the changes in the digital music landscape and how artists have made it own their own which prompted the call to Aimee Mann's manager. And he, believe or not, had heard of Fairtunes , because we sent her a cheque, and we spent a couple minutes talking about that. We also talked about how she's broken away from the labels and is pursuing opportunities on her own. Being on her own makes life a lot easier because she now has full artistic control, makes more per CD, actually sells more CDs, and has an easier time promoting stuff via the Internet because she owns her own masters and doesn't require the permission of a label at every turn.