DISTRO.fm Crowdfunds Nonprofit Digital Music Subscription Service [Updated]

DISTRO.fm is an emerging nonprofit organization based in Brooklyn that is building a digital music subscription service. They are currently seeking funding via Kickstarter for software development and are also moving from reliance on a fiscal sponsor towards full nonprofit status. DISTRO.fm is taking an open-source approach to software development and a community-based approach to decision making.

[Updates: After exchanging emails with founder Kyle Marler I’ve added a number of updates throughout this post.]

However, DISTRO.fm’s Kickstarter campaign is far from reaching its goal of $23,000 and it is unclear what will happen if they don’t raise funds via this campaign.  Since this service could be of great value to musicians, please consider supporting the campaign or offering your help.

[Update: Between volunteers who are stepping up and separate tax deductible contributions, DISTRO.fm will continue to move to the next stage but a successful Kickstarter campaign would definitely improve the situation.]

DISTRO Kickstarter Pitch Video

DISTRO.fm is an interesting concept driven by strong ideals. Their music distribution platform is designed as a subscription service. Musicians set their fees or allow pay-what-you-want and customers subscribe on an annual basis to receive all music uploaded to the system. You’ll be able to stream or download music and it can be automatically sent to your iTunes or Spotify accounts. It’s unclear if DISTRO.fm will be taking a percentage or raising operating funds separately.

[Update: DISTRO.fm will be raising funds via foundations, donations and related means to support the service.  If fees are needed, they expect to keep it in the 3 to 5% range at a maximum.]

DISTRO.fm emphasizes their plans to become fully nonprofit as a commitment to keeping fees lower than commercial services. They present it as a mandate for nonprofits to only cover operating costs but, in reality, it will be their decision to keep costs low. If you’re familiar with the world of high-end nonprofits you know that there’s a lot of money in the nonprofit game including high salaries for execs and cushy facilities.

[Update: Marler has observed this himself but reiterated DISTRO.fm’s commitment to service rather than profit.]

They also emphasize nonprofit status as a choice based on their desire for community-based decision making. Again that’s a choice they don’t have to make as a nonprofit. I’m not attacking their claims and they appear sincere but the claim that their approach is mandated by nonprofit status is simply untrue. That just seems to be their perception of the nonprofit world.

[Update: Again, Marler conceded the point but stressed that DISTRO.fm is inspired by such examples as The VERA Project and intends to go beyond nonprofit requirements with such forward thinking moves as livestreamed board meetings to ensure transparency.]

DISTRO.fm launched in 2010 and is currently in alpha. The Kickstarter campaign will allow them to move to beta and develop basic functionality needed to operate publicly.

It sounds like a great project and there are some really interesting people involved as you can see from their Board of Directors listed on the Kickstarter page.

But I’m a little concerned about their marketing. The video has a 50 second intro that really should be cut. Wally the puppet works well and that’s where I think the video should start. It would also be nice if there was something on the homepage of DISTRO.fm’s site that was a bit more inviting than the current display. For example, something featuring artists who plan to use the service would help create an environment conducive to fundraising.

At this point the only similar platform with which I’m familiar is Drip.fm that is currently focusing on building relationships with indie labels. If you’re interested in this kind of thing, I’d suggest keeping an eye on both projects. If DISTRO.fm can successfully launch in a timely manner then they’ll probably be available to individual musicians sooner than Drip.fm.

That said, I think it’s great to see multiple approaches to figuring out how to address the needs of musicians and fans and I’m glad to see projects like DISTRO.fm basing their work on deeply held values.

Interview: Distro.fm Could Revolutionize Music with Artist Subscriptions

More:

• Drip.fm Creates Subscription Revenue Stream for Indie Labels
• Cash Music Needs Our Help To Build Free Open Source Tools For Musicians

Hypebot Senior Contributor Clyde Smith (@fluxresearch) maintains a business writing hub at Flux Research and blogs at Crowdfunding For Musicians. To suggest topics for Hypebot, contact: clyde(at)fluxresearch(dot)com.