Another free ride is coming to an end for Web music only this time it's the musicians who stand to lose out. MP3.com plans to start charging for an unusual online royalty system.
Dubbed "Payback for Playback," the program gave artists who posted music on the site a way to earn a little money whenever site visitors listened to their music.
MP3.com Chief Executive Michael Robertson has long touted the service as an example of how the Internet was altering the economics of the music business, offering a way for even unsigned artists to get paid for their music.
As of April 1, the no-cover-charge model is coming to an end. Artists can still put their sites onto MP3.com for free, but they will have to pay US$19.99 a month to be a part of the profit-sharing program.
That shouldn't be a problem for the most successful artists on the site, but the vast majority of musicians on the site today make less than the nearly US$240 a year that will now be required to break even on the program.
Although the program has handed out millions of dollars since its inception, only a handful of musicians have made any real money. The move triggered some anger among musicians on the site, who had come to see it as place largely free of the pressures of the traditional music industry.
"Next they'll be charging us to be on their site!" wrote one anonymous poster in the site's artist forums. "They're almost as bad as the record companies at this point."
The move comes as MP3, like other music sites focusing on independent artists, struggles to turn a business that is developing more slowly than expected into a profit-making venture.
"There is still demand for (this kind of content) on the Web," said P.J. McNealy, a Gartner analyst. "The question is still whether there is a legitimate business model behind it."
MP3.com's decision comes a few months after the Internet Underground Music Archive (IUMA), one of the earliest music sites on the Web, stopped its own artist revenue-sharing program and closed down many of its other features.
Other similar sites have been struggling as well; Riffage.com, a site that allowed new artists to post their material in hopes of discovery closed down late last year.
The new way, like the old?
The pay-for-payback model isn't unknown in the traditional music world. Organisations such as BMI and ASCAP, which collect and distribute royalties for songwriters and music publishers, collect some nominal application fees or annual dues, for example.
But the Web has been touted as a way for musicians to break out of the old mold. By reaching a potential new audience of thousands or millions of people, artists could gain new fans and - with tools like MP3.com's service - even turn this into a little bit of cash.
A few success stories have emerged on MP3.com's site. The top artist on the site last year, a band dubbed 303Infinity, earned more than US$165,000. Currently, the top artist in the "Alternative" section on the site is major-label band The Offspring, with more than US$18,000 in earnings this month. Behind them is a band known as "Nothing to Lose," with more than US$2,000 in earnings.
Few of the tens of thousands of bands on MP3.com's site make it to that status, however. More typical are earnings of just a few dollars a month. Artists of this level are accusing MP3.com of leaving them behind.
