Fans love to download music and artists love to share it. What has made the music ‘business’ work for successful artists is a (hopefully) fair trade of music for money. Musicians perform and sell their recordings because that’s how they survive, and fans get to enjoy that music by paying for it. Getting fans to pay for music when they can download it free and often illegally, has become an increasing problem for the music industry over the years since 1998 when I helped launch the MP3 industry.
In order to reach fans, artist post their music on platforms that help them run their music business. I post songs on ReverbNation and CD Baby. These platforms are really custom storefronts where you can sell your music at a fixed fee.
Enter Kroogi.com, a content community that lets fans “pay what you want” for that content. They download it and then make their own determination on value, and send you cash. Kroogi is positioned between illegal, free and fixed-fee platforms like iTunes.
Founded by Miro Sarbaev, a developer who worked with Shawn Fanning on Napster and Snocap, Kroogi lets content creators — musicians, artists, videographers, photographers, and writers — post content and form social circles of fans around it. The social circles are kind of important and interesting. Fans can rate music and connect with like minded individuals. Social circles are really key to growing a fan base, so I think this aspect of Kroogi is really worth exploring.
Sarbaev reports that about 20% of fans pay for content. Some even donate large sums of money to artists. He calls it a sort of “Gratitude Economy.”
The idea that content should be free is not new. Trent Reznor, the man behind the band Nine Inch Nails, released his music for free online, knowing that fans will download anyway from file sharing sites. What he prefers is giving fans a ‘reason’ to buy music.
After a recent MIDEM Conference, Mike Masnick coined the model: “Connect with Fans (CwF) + Reason to Buy (RtB) = The Business Model.” Reznor sold a two disc CD for $10; a Deluxe Edition Package, for $75; a $300 Ultra-Deluxe Limited Edition, and a “box set” with print images. He signed the limited set of 2,500 units. It took just 30 hours for all 2,500 to sell out, bringing in $750,000 in just over a day.
How we share and pay for content in the future is an open question. For now it makes sense for artists to use platforms that are social in nature, where fans can create social circles around your content. That’s a big part of Kroogi’s community model.
I’m working with Kroogi and say check it out.