Personal experience:

• When my wife was signed to an Indie record label, we were really excited. In the end, she sold 1000 CDs, lost all rights to her music for 7 years (even though the CD had been out of print for many years), and earned a total of $137 in royalties paid (some of it paid to her as CD copies of her own CD which she then gave away for promotion).
• The record label that signed her wasn't evil: they were one of the good guys, and gave her a 70/30 split of the profits (of which there were few). The label got screwed at every turn: distributors refused to carry their CDs unless they spent thousands on useless print ads, record stores demanded graft in order to stock the albums, and in general, all forces colluded to prevent this small, progressive label from succeeding.

• Radio is boring: everyone I know is into interesting music, yet good music is rarely played on the air. I'm into everything from Ambient, Industrial, Goth, Metal to Renaissance, Baroque, Tango, Indian Classical and New Age (and many other genres!), and so are many of my friends. Yet, these genres are barely visible in record stores, and totally absent from the airwaves. Radio is mostly about Country, Pop, and Rock, with a little bit of dull, safe classical thrown in.
• CDs cost too much, and artists only get 20 cents to a dollar for each CD sold. If they're lucky. And, most CDs quickly go out of print: I buy more CDs from EBay than Amazon.
• Online sales (such as over Amazon.com) often cost the artist 50% of their already-pathetic royalty (due to a common record contract provision). International sales and mark-downs often net the artist no royalties.
• Record labels lock their artists into legal agreements that hold them for a decade or more. If it's not working out, labels don't print the band's recordings but nonetheless keep them locked into the contract, forcing them to produce new albums each year. Even hugely successful artists often end up owing their record label money.
• Napster, Gnutella and Kazaa proved that people love music, and they want to share it. Lawsuits may shut Kazaa down (and Kazaa obviously promotes copyright violation), just as Napster was shut down. Clearly there's a huge public demand for Open Music.
• Using the Internet to listen to music is usually tedious: there are too many ads, too many clicks, and the sound quality is usually bad. It's too much work, not enough reward. A well run Internet radio station (such as Shoutcast, or Spinner) solves that, but the entrenched record industry wants to kill that too, with onerous licensing terms and odd "rights limited" playback schemes.
• I read this article by Courtney Love six months after starting Magnatune, and was stunned by how much I have in common with her vision and understanding of the music business. And, she's much more eloquent than I am.

• I thought: why not make a record label that has a clue? That helps artists get exposure, make at least as much money they would make with traditional labels, and help them get fans and concerts.
• Magnatune is my project. The goal is to find a way to run a record label in the Internet Reality: file trading, Internet Radio, musicians' rights, the whole nine-yards.
• If you think Magnatune is a worthy goal, please support it. There are powerful forces who want it to fail, so I need your help if this is going to work.

John Buckman, Magnatune founder/owner Berkeley, California, March 2003