How can my friend get the rights to sell mp3s?

June 20, 2008 10:41 PM

Who can license music for download/sale? A friend came up with a wicked cool idea for selling music using the internet, but it can't be done through some affiliate mp3 link (like Amazon). We're just a couple of college guys, and we don't know any rockstars or label executives.

Are there smaller labels out there who can sell us the rights to offer downloads of their music? Is there typically some money we have to pay up front when signing up to sell a band's music? Will I need a lawyer?

We just want to sell music in this cool, immersive context on the internet, and would be willing to give the label/artist a bigger cut than other people do, because we think we can make money on other things, and even take a loss on song sales. (That's what Apple does with iTunes right? To sell iPods?)

Do we need to sign contracts with our school friends who are pretty good musicians? Or is it just enough to have them send us their mp3s and we give them money. (tax rules?) We can't afford lawyers, and we probably wouldn't want to talk to them.

It'd be good to have hip hop, or other music that specifically teenagers would like, but it'd be even better to have a broad collection.

Googling yields ASCAP, Walmart and other companies that might not talk to little old me.

My parents say that an idea isn't enough, that we have to build the application.

We're free this summer and could probably build something for musicians and record labels to see.

Whatever we do, we want to do it legal, we don't want to be oink or allofmp3 and get shut down.

I know people can't give me official legal advice, but anything at this point is helpful. We thought about just calling the record labels main numbers, but that sounds like a waste of time.

posted by racecar to media & arts (15 answers total)

It's pretty unlikely you'd be able to do this. The record companies have shown a pretty extreme hesitancy to let people touch their stuff, and the music sites that have come out have all been created after intense negotiation between big companies (like Apple and the record companies, real media, Microsoft) There are no real small startups in the online music industry -- other then p2p and 'pirate' sites like allofmp3 (which now has a site running out of Ukraine)

But, if you code up a cool demo, you might be able to get some venture capital funding and then hire people to work with the music labels.
posted by delmoi at 10:55 PM on June 20, 2008

ASCAP tracks its members plays on radio, in public establishments, and even on the radio to make sure they are receiving proper royalties. Wal*mart is a big box chain store. Neither of these places would even have the right to sell you something as complex as you're asking. There's a reason there's only a few mp3 retailers for already established bands- it takes a mammoth amount of clout and a tower of lawyers to work it all out. You'd be better off sampling the songs on your site somehow (or streaming), then redirecting users to iTunes to actually buy the music.
posted by self at 11:05 PM on June 20, 2008

You can start with public domain and creative commons attribution (cc-by) licensed music and go from there. This will at least be enough to do a proof of concept.
posted by zippy at 11:18 PM on June 20, 2008

I applaud initiative, but to be honest, it's pretty obvious that you know precious little about the music business. From where you are now, this will be a disaster. Calling the labels would be a total waste of time - the simplest reason for which is they are never going to give any control over any portion of any of their catalogs to people who don't know anything about licensing, have so little funding they cannot afford lawyers (which you'd surely need), and don't even know where to license music from in the first place - all to be used on a non-existent application? I'm guessing you don't have accountants either. It'll just never happen - plus many labels are getting more concerned with maintaining their hegemony over their catalog and *pulling* their tunes from various sites. (The more I think about it, the more I wonder if you've even given thought to how you'll collect money and that sort of thing too.)

Do yourself a favor and get educated before you tackle something you're currently set up to fail in. Here's the info for a book that seems to be pretty well-regarded for what it is, a simple introduction to the mechanics of the music business, with bits on royalties and licensing and all that. It's called "All You Need To Know About the Music Business: 6th Edition" by Donald S Passman, and you can order it from most places for under $20.

It's cool you want to do this, but it'd be sad if you destroyed a good thing by being grossly uninformed. So read up!
posted by Dee Xtrovert at 11:40 PM on June 20, 2008

It's not that unlikely. A couple of sites that already do this are Villa Villa Nola and Zunior.com. You might get some ideas from browsing them. You are going to need to have at least a proof of concept to convince anybody of anything. Ideas are a dime a dozen.
posted by loiseau at 11:45 PM on June 20, 2008

In fact, ideas are so cheap and digital music sales are so expensive that you don't need to be so secretive about what you're trying to do. Implementation is everything and you can get licensing if you're good enough. Your first task should be to find out if it's been tried before, because a lot of angles have been tried.

Immersive? Does this mean that people will sit there and listen to music without doing anything else but drooling? If it's while they're doing other things, is it a webplayer that sits in the browser(YMP)/Air app/etc.? Selling while this is happening? How many clicks will it take to do so, and will it break the user out of the "immersive context?" Does it involve you-can't-do-that stuff like storing their credit card number? PayPal? Subscription?

If you can sell music as effectively as you think you can, you can find music to license. You could become a label and run your own publishing for unsigned artists that you find (and sign). I'd aim higher than "pretty good musicians," though. Do you smoke a lot of pot or something?

We can't afford lawyers, and we probably wouldn't want to talk to them.

You're getting extremely ahead of yourself here, but even so that's not what I'd call a winning attitude. It's not even a "pretty good" one.


posted by rhizome at 12:17 AM on June 21, 2008

You can't talk to the big corporate labels unless you have money and power at the level of Steve Jobs. So that path is out.

You're not the only one to find this unfortunate. You should contact people trying to build alternatives to the major labels. Two such company I know are Magnatune and The Orchard.
posted by gmarceau at 12:38 AM on June 21, 2008

A friend came up with a wicked cool idea for selling music using the internet

If it's something no one else is doing and it is a really good idea, congratulations on somehow beating one-in-a-million odds, because there are at least that many people (most of them just college guys and girls) all trying right now to come up with ways to cash in on music downloads.

Get all the details (every step, every method, every material) worked out on paper, build working models, then try to secure your rights -- copyrights, patents, whatever might apply. Take your idea to a lawyer who knows the business. See what the lawyer says. Probably you'll discover that someone patented a similar thing in 1972, but give it a try. If the lawyer gives you reason for hope, try selling your idea to a large corporation that is already in that business. If it's really such a great idea that it could compete with Giant Corporation, let Giant Corporation take it and make you a lot of money while you and your friend change your majors to scuba diving and lounge lizarding.
posted by pracowity at 1:51 AM on June 21, 2008

I agree that you won't get the time of day from major labels so don't bother with that. And until you're a well established retailer you also won't be able to speak to the aggregators like The Orchard or IODA. However, there is nothing stopping you from setting up the shop and approaching local bands and small labels to see if they'd like to make their stuff available through your site. As long as you can show those artists or labels that the site works and that they are getting paid properly for each download, I don't think you'd have much problem finding a few sign ups to get you going.

Yes, you'd need to sign contracts with the artists clearly outlining all the terms including the split, who is responsible for paying mechanicals, schedule of royalty payments, etc.

Remember, building the site and signing up a few artists is only the first step. You then have the huge task of bringing in the customers.

Start small and good luck.
posted by gfrobe at 3:04 AM on June 21, 2008

Racecar - I'm going to drop you a line via MeFi Mail. Could you make sure you check it and get back in touch as I know someone who might be able to help you.
posted by skylar at 4:03 AM on June 21, 2008

racecar: "we think we can make money on other things, and even take a loss on song sales. (That's what Apple does with iTunes right? To sell iPods?)"

No, Apple makes a profit on iTunes. See here and here.
posted by sveskemus at 5:58 AM on June 21, 2008

How can I sell Creative Commons music? I looked into the CC-By license, like Zippy said, but would I have to then give every penny to the Artist? I have to admit that CC licenses confuse me and I just think of them as "use my stuff. but don't sell it, and give me credit."
posted by racecar at 6:43 AM on June 21, 2008

CC isn't a straight up license. Rather, it's a group of them. Since you want to sell, you'd need to look and see if commercial use is allowed or not. If it is, then generally speaking you can use it.

If it isn't, you can contact the artist and see if they want to do it anyway. The license is for people who randomly find it, there's nothing that says a new agreement can't be used for just you.
posted by theichibun at 7:37 AM on June 21, 2008

Learn more about the types of Creative Commons licenses that there are. Remember that licenses can be whatever is written on paper and agreed upon by both parties (assuming you don't violate state or federal laws at the same time, of course).

If you wanted to license my music for sale on your site, we'd either use an existing license (like one of the Creative Commons ones) or we would come up with our own. You will need a lawyer or someone very, very smart in order to do this.
posted by odinsdream at 11:15 AM on June 21, 2008

Just seems so chicken-and-egg... In order to get content owners/aggregators to listen to us, we have to be established, but in order to establish ourselves as retailers, we have to have content.

I guess if this were easy, lots of people would've done it by now.
posted by racecar at 12:36 PM on June 21, 2008