Wednesday, March 6, 2013

ReverbNation Jumps Into Music Download Business

Alex Pham/Billboard Biz

ReverbNation, a digital marketing platform used by more than 2.7 million musicians, will announce on Wednesday that it is jumping into the music download business. But it’s doing so with a twist -- 43.4% of what people spend will go directly to charity.

ReverbNation isn’t turning into a non-profit. Nor is the endeavor a pure marketing stunt. It’s a serious business proposition to see if the North Carolina digital company can do well for its artists by doing good. In other words, the company is betting that people will buy more music if their purchase is tied to a cause that they feel good about.

“It’s not 100% altruistic,” ReverbNation president Jed Carlson readily admitted. “Our mission is to look out for the artist. Music for Good is about putting another tool in their toolbox to help their careers.”

Under the Music For Good program, when a song is purchased for $1.29, 56 cents goes to the artist, 56 cents is sent to a charity the artist selects and 12 cents goes to PayPal to process the payment. The remainder, a nickel, goes to ReverbNation. Among the 13 charities currently in the program are Fender Music Foundation, World Vision, Oxfam America, Heifer International, Zac Brown’s Camp Southern Ground and CARE.

The company rolled out a beta version of the Music For Good program on Dec. 21 and is launching the full product to all artists Wednesday. Already, more than 51,800 artists have signed up to sell their songs on the digital platform, which will give bands and buyers the option to post purchases on Twitter and Facebook. This feature alone is more likely to resonate with people than simply posting what they just bought on iTunes, according to social marketers. Among the more viral social posts are those involving charities as a form of self-expression, according to Geoffrey Colon, a digital marketing analyst with Social@Ogilvy.

ReverbNation is also trying to tap into a segment of the population that cares about whether their purchases contribute to a greater cause. The notion, which was dubbed “purpose driven commerce” by Daniel H. Pink in a book entitled “Drive: The Surprising Truth About What Motivates Us” is based on the success of businesses such as Toms Shoes, a Santa Monica, Calif., footwear company that has flourished in large part because of its promise that for every pair of shoes it sells, the company will donate a pair to impoverished children.

There’s even more precedence in the music world for what ReverbNation is doing.

“I grew up singing ‘We are the World,’ and for me it was an early exposure to the idea that music and nonprofits work in harmony,” Carlson said. “At least once a year, bands get together and put on charity concerts. What we’re doing is providing artists, especially independent artists, with a digital platform for micro-philanthropy during the other 364 days of the year.”

Carlson admits that ReverbNation is taking a flyer on the idea that artists can “earn while you give,” benefitting their bottom line by weaving philanthropy into their sales pitch.

“Can we grow the market by doing this? Is this a best practice?” Carlson asked rhetorically. “These are the types of things we want to learn. We’ve got this giant Petri dish rolling right now, and we’re looking to find the answers.”

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