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Fairtunes.com – We'll Pay the Artist for you!
 The concept behind Fairtunes.com helps you to understand why the company is named what it is. This unique new service that was established in May 2000 wants to make it easy for music lovers and consumers who want to make payments directly to artists to do so. For example, you might visit a website and download an artist's music and pay whatever amount is requested. But in the back of your mind you know that the artist will only receive a minimal amount of what you just paid for his or her work, and if you're a person with a good heart who puts your money where your mouth is, you might want to make sure that the artist receives fair compensation. You can do this by sending the artist a check, of course, but where do you send it? Even if most people have the desire to pay artists for their works, they simply don't have the time to sit down and tackle the major project of hunting down the artist's address -- if it's even possible to get it, that is. And that's where Fairtunes.com comes in.
According to a press release issued on July 28th by Fairtunes.com, "Fans can visit the site and make voluntary, secure contributions with their credit cards to any artist in the name of a particular song or album they've downloaded. The company will then make contact with the recipient, pass the money on, and report back to the contributor."
Per John Cormie, Co-Founder of Fairtunes, "Jupiter Communications recently released a report showing that, in general, those who download music tend to buy more CDs than before these systems were available. I know firsthand that part of this effect is due to people buying an album simply to support the artist, despite the fact that they listen to the music primarily in MP3 format. These fans are well-meaning, but they probably don't realize what a tiny sliver of the retail price of a CD actually ends up in the artist's pocket. So the irony is that these people are trying to pay the artist for the music, but they're really paying the recording industry for packaging, promotion, media and distribution – services that because of MP3, they didn't even use!"
According to Matt Goyer, Fairtunes' Co-Founder and President, "Fairtunes is not involved in any aspect of the distribution process of digital music. People have always been able to send a gratuity to an artist by sending a check in the mail, but even those who understand why they would want to do this don't, because it's not convenient."
MusicDish spoke to Mr. Goyer about the technology and business model of Fairtunes. "The technology is not very proprietary at all. If I wanted to send money to an artist, I could call the record label, find out who the artist's manager is, contact the manger, get the artist's address, and then send them a check. People want to be free to pay artists, but don't want to go through all that to do it. With Fairtunes, people can send funds directly to any artist, anywhere. Currently, we have a database of about 100,000 artists (both indie and major label), and if the artist you're looking for isn't there, you can add their name and we'll track the rest of the information down. The key idea is that the artist doesn't have to have an Internet presence to receive the money. If they have a manager, an agent, a publicist, or if there's any other way to find them, we'll do it."
Goyer also explained how the financial end of the process works:
"We charge you (a music listener): -- 4.0% per transaction + $0.25.
Our cost in terms of VISA + payment processor: -- 3.5% per transaction + $0.23.
Fairtunes then gets: -- 0.5% per transaction + $0.02.
Fairtunes uses the amount that it receives from each transaction to pay for servers, computers, lawyers, accountants, banking, stamps, envelopes, cellular phones, faxing, stationary, and labor costs. With sufficient volume, we can drop it down to a couple of cents per transaction and once that happens, we'll have no problem absorbing that cost ourselves." He continued, "We are currently looking at ways to restructure this system, and as early as next week, we'll have a new system in place. Our goal is to completely eliminate the service fees."
Addressing the issue of how the company receives its revenue, Goyer said, "Currently we don't have revenue coming in. We're looking at ways of receiving it through advertising, and we're also looking at a system of aggregation – that is, while we hold the money in aggregation for an artist, we're earning interest on it."
Linkography
Fairtunes – www.fairtunes.com
Jupiter Communications – www.jupitercommunications.com
Related News from Mi2N:
» Pay ANY Music Artist Online
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