The music industry has been consistently struggling with the issue of digital piracy. Apple’s iTunes store was one of the first to crack the distribution problem, But, giving buyers a choice to fork out about US$0.99 per song title while knowing there’s a free copy available out there on peer-to-peer networks, seems like a losing battle. A startup in Singapore, started by ex-Singapore Armed Forces officer Ben Looi, is looking to find a way around this.
At first glance, Tell My Friends seems like a multi-level marketing product. Tell My Friends provides buyers with a unique link to the music they have purchased. By sharing that link either on their social networks or sending it to their friends via Whatsapp or SMS, these buyers are able to earn commissions on purchases made by their friends using the link. These secondary buyers will then receive their own unique links that will not only provide them with commissions from future purchases but also kick back commissions to the first buyers. This goes on for up to 10 tiers and with most songs costing below S$2, buyers have the opportunity to earn up to S$100,ooo.
Ben admits that multi-level marketing products have been known to have a bad name. Knowing so, he has done his due diligent to ensure that Tell My Friend falls on the right side of the law and even provides information to users on how to spot illegal multi-level marketing services. Ben also mentioned that the platform is currently pending its patent approval.
For artists or labels looking to use Tell My Friends’ services, the platform offers one of the industry’s more competitive rates. The intellectual property rights owners will receive half of the sale price while 30 percent of the sales is reserved for buyers’ commissions. Tell My Friends charges 20 percent for administration fees. Unlike Apple’s iTunes store where the prices are fixed, artists and labels on Tell My Friends get to decide the final price of their songs depending on the royalties they intend to receive.
Since their beta launch a few months back, Tell My Friends has 399 users and about 794 paid downloads. This is only through recommending to friends as the team is still working on improving the user experience. Ben mentioned that they are working to get more independent musicians on board to build momentum. Tell My Friends will look to approach major labels in the near future, but find the current timing and situation hard as their position gives them little leverage against these bigger label companies.
Understanding the complexities of online payments in the region. Tell My Friends is able to work on a prepaid model using its own gift cards. This model could also work well if the startup manages to partner with the local telcos that will provide them with carrier billing services. Tell My Friends has a blanket license from Music Publishers Singapore that allows it to clear rights for cover songs in the country, making it easier for local artists to get their covers out on the platform.
Check out the Tell My Friends’ video for more info about how the platform works.
Image credits: CNET