Dealing with Download Guilt

Matt Goyer was driving with his buddies for ice cream in the summer of 2000 when a commercial came on the radio. Their favorite band, the Tragically Hip, had a new CD out. The savvy computer-science majors sniggered, Yeah, like we're going to buy that when we can just find it free online and download it. "But then we started to think, How is the band going to be a band if we don't buy CDs anymore?" says Goyer. "I felt responsible."

That led the Canadian student to quit his summer job at IBM and build Fairtunes fairtunes.com) a website where you can send money to your favorite artists in payment for music downloads. Enter your credit-card details, type in how much you want to send, and Fairtunes will cut checks and track down artists anywhere in the world on your behalf (most artists, like Bjork, cash them; some, like Ani DiFranco, ask for them to be redirected to charity; a few, like U2, ignore the checks altogether).

Because the economics of the music business is so bad for musicians, you don't have to send more than a dollar before you have compensated them fairly for downloading an entire album. Goyer doesn't feel guilty about stiffing record companies for their marketing labors. "We'd love record labels to just go away," he says. "They're great for a Britney Spears, but I don't see them providing a lot of benefits for smaller acts."

So far, the tiny site with zero marketing has dished out $20,344 in patronage from 3,049 donors. That's not nearly enough to turn a profit, but in principle the business model works because Fairtunes holds the cash for four months and takes the interest as a transaction fee. Goyer says older users (over, say, 30) take to the idea faster; they recognize it as an honor system, whereas the younger ones often feel entitled to free music. The guilt factor is more likely to work if users see links to the site while they are enjoying their purloined tunes; to this end, Fairtunes recently made a deal with the hugely popular Winamp music player. Pay up, and, like Goyer, you can have your ice cream and eat it too. --By C.T.

Global Business

No Ad Trafficked: globalbiz marketingHouseAd 336 280