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Monday, March 14, 2011

Rethinking Music Selling Incentives: Can A Pyramid Scheme Help Save Music Sales? | Techdirt

Rethinking Music Selling Incentives: Can A Pyramid Scheme Help Save Music Sales?

from the it's-creative,-but... dept

Capitalist Lion Tamer points us to an interesting post by Chris Holmes, a musician, who has come up with a thought-provoking idea for a different kind of business model for music, which he calls the Privateer System (named after the British attempt to "legitimize" piracy on the high seas). The post is pretty long, but the basic idea is this:

1) An artist/label sells its record directly to the public through a The Privateer System website for $10.00.

2) Any party that buys the record directly from the artist/label we will call a "primary buyer." The primary buyer receives a license and a Java widget with their purchase, enabling them to sell digital copies of the record for $7.50; $5.00 of that sale price goes to the artist/label, while $2.50 is profit for the primary buyer.

3) A party that buys the record directly from the primary buyer we will call a "secondary buyer." The secondary buyer receives a sublicense with their purchase to sell digital copies of the record for $6.75. $5.25 of that sale price goes to the artist/label, with $0.75 as profit for the secondary buyer, while the primary buyer sees $0.75 of profit. (The party that buys the record from a secondary seller we will call a tertiary buyer.)

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