Building Ambisonia.com

Here it is put simply.

1. You can stream all content, for free, in AAC or AC3. Just like Youtube. Listen to it as mush as you like.
2. Subscribe for $5/month, and you can download everything, in any format.
3. Purchase credits in $10 or $20 amounts, and you can ‘tip’ the contributors… as much as you like. The contributor gets 70% of the tip (same rate as iTunes).

Here are my qualms:

• is $5/month too much? Should it be $3/month. If its $3/month, then it may not be enough to hit break even point (I’ll need heaps more subscribers.
• I cant charge $5/month in monthly increments, because the credit card transaction fees would chew a large chunk out of it. So it will most likely be more like $30 for 6 months or $50 for 12 months.
• What if someone wants to just download 1 piece and is happy to pay $10 for it? … they cant, they have to subscribe for a minimum of 6 months for $30. That’s not good, that will lose a lot of people. Maybe I should also allow a 1 month (not recurring) subscription for $5. No, that’s not good, people will be able to subscribe for 1 month, download everything, then wait an other 6 months to subscribe again. Hmmm.
• Should the $5/month subscription also include $1/month free credit? That way, when you get a 6 month subscription, you also get $6 to spend on tips. That would encourage people to start tipping. I think this is good, but this means the business loses 70c in every monthly $5. This may well be worth it.
• Wont people get confused between the monthly subscription cost … and tipping credits? Perhaps it needs to be simpler. Perhaps you can just buy tipping credits. Perhaps the only way to download for free is to buy tipping credits. Perhaps you have to buy a minimum of $30 tipping credits … you have to spend it in 6 months but then you can download everything for free for 6 months. Ambisonia’s income here would be less (I think I will project this model a bit further). But this would dramatically simplify the ‘business model’ from the consumer side. Perhaps I can recover the lost monthly reveny by increasing the commission from 30% to 40%. Maybe that is not fair.
• How do I introduce this model? At some point I will have to say “no more free downloads” … now everyone has to pay. Do I do this overnight? What would be good sense here?
• Should I advertise this post on the sursound list?
• Should I wait for the new version of the site (slicker, faster, more professional) to come out _before_ I start enforcing the commercial model? (I think so… I need to convice people that I am serious).
• Should those who upload content have free monthly membership? Maybe it should be 1 tune per month to get the free membership? Maybe that doesn’t make commercial sense… but it makes good ‘community sense’.
• What if people dont want to have their uploads tipped? Well, I’ve already catered for that… the uploader will allow you to say “dont allow tips for this piece”.
• How do I handle payment of the contributors? Monthly would be great. Is it done over paypal? Do I do some kind of background check to make sure that they do have legal entitlement to receive income from that piece? OK, I already have this covered in the legal documents I got my lawyer to draw up… but should I put some extra vigilance on top?
• Concerning the tips, if someone purchases $20 credit (for $20) I’ll only have access to something like $18 (after the credit card transaction fees and commission)… so do they then only have $18 credit? … or do I wear the credit card transaction cost and still give them $20 to spend? I’ve got to research how itunes does this.
• Do the credits have an expiration date? I suspect that I will have to do this, otherwise I become some kind of ‘bank’ holding people’s funds. Need to speak to accountants about this.

and can I change the whole business model 2 months down the track without alienating the site users?

lots of questions

I’m ‘intuating’ that the most likely successful business model for Ambisonia will involve some kind of hardware coupling of the site. This is based on the postulation that people will only really ever bother to start purchasing tunes on Ambisonia if it is very very easy.

iTunes works because it is easier to purchase a tune on iTunes than it is to rip a CD, or download via Peer to Peer. This is actually a very nice natural order for Ambisonia, because it means that if you really really want to, you can still download the tunes via bittorrent. But if you cant be bothered to do the whole computer/bittorrent thing, then all you need to do is click on ‘purchase’ and the piece will automagically land on your Ambisonic Player Harddrive.

So what is this Ambisonic Player Harddrive? … is it an independent device? (independent from the AV Receiver?) or is it integrated with an AV Receiver? Exactly what does it allow you to do?

The obvious revenue model for Ambisonia would be to offer paid download. Buy a track for 90c (downloaded).

This is actually very difficult because of the amount of money involved. Online purchases are usually done with credit cards, and credit card purchases are not viable for anythinig under $10 (because of the charges on credit cards). One option is restricting purchases to PayPal but this is limited (and many people really dislike PayPal).

The other option/solution is to sell ‘credits’. This is how iTunes / Amie Street and others do it. Buy a minimum of $10 worth of credits (for example).. and then spend that as you like.

The problem with this model is there is a significant barrier to entry. Who will spend $10 to buy their first 90c track?

Other than that, building the (secure software) infrastructure to manage credits will be very involved. So, whilst this is still a long term goal, there has to be an other revenue model _before_ this kind of thing is implemented.

In the previous post, Crispin14 suggests that I ask “If Ambisonia succeeds, who, in addition to the members and consumers of the music, will benefit“… in order to identify other players who could be part of ambisonia, and hence perhaps start to form a solid mission statement.

First I’d like to define who the people are who I would like to benefit:

1. The recording contributors. Those who upload content to the site.
2. The open-source software creators. Those who write the code that I use to convert and process ambisonic files… and the ambisonic players the consumers use.
3. The experts.The members of the community who share their years of collected knowledge to support the endeavour to get ambisonics out.
4. The consumers who drive the interest in ambisonia.

Others who will benefit if ambisonia.com is successful are:

1. Consumer Hardware manufacturers
   1. Home theatre amplifier/speaker manufacturers
   2. Multi-channel sound card manufacturers
2. Software manufacturers
   1. Manufacturers of commercial grade authorware. (VST plugins, DAWS etc.),
   2. Audio file conversion software. (Converting from ambisonics to 5.1),
   3. HD-DVD, blu-ray, SACD, DVD-A authoring software (burning ambisonics to consumer formats)
3. Surround microphone manufacturers. Soundfield and Coresound will benefit from the increased interest in surround sound.
4. Generic microphone manufacturers. Standard microphones used in ‘Native B format’ recording setups.  That’s typically… AKG’s Blue Line, Sennheiser MKH, the Schoeps range, and Neumann’s modular ranges
5. Producers of multi-channel recording hardware. Such as the Edirol R4 and the Sound Devices 744T.
6. Dolby. Because ambisonia will raise excitement and awareness of surround sound. (Dolby must be in talks with home theatre hardware manufacturers
   since the more home theatres there are out there, the more there is a demand for Dolby Digital surround sound content)
7. DTS, Inc. For the same reasons as Dolby. Except that Ambisonia is actually distributing content (or will soon) in DTS format, hence increasing the awareness of DTS and its surround sound formats.
8. Sound effects houses. Ambisonia can be used as a source of surround sound effects.
9. Home Theatre Services companies. People who help customers properly set up their surround sound system.

All recordings go on the site as free downloads to start.

When the recording is submitted, the author ticks a check box to say ‘include this piece in the premium service’.

If the recording reaches a 5 star rating (or 4.5 or whatever) with a minimum of lets say 10 or 20 ratings, then it automatically gets moved into the ‘premium service’, which is either a subscription model or pay per download model.

This means that those who download early get everything free (so it is still possible to get all recordings free), and act as a kind of natural ‘quality management’ system…. where the better content rises to a commercial distribution model. This would encourage and increase
early downloads (since they’d be free).

But I dont know whether the commercial model should be a subscription model (pay $10 / month and get everything on the site) or a pay-per-download model (which would be much harder to implement).

Actually, it is very similar to the http://amiestreet.com model … and I think there should still be CD’s on offer for those who dont want to have a computer dependent experience ..

Perhaps there could be 2 or 3 different kinds of models:

1. Subscribe for $10/month … have access to all the recordings that have been rated up (that others can no longer access)
2. Subscribe for $15/month … receive an Audio CD in the mail that has all of that months’ best rated recordings
3. Purchase one off Audio CDs for $15

Etienne

I’ve now been using adsense for almost 3 months, so I’m getting a handle on what it is worth to me. I’m currently earning around 10USD per month with it. This is not enough to cover the server costs, let alone my mortgage!

So I’ve been researching what I need to do to increase my adsense revenue. The obvious one is simply more page impressions. You’ll notice that I also put the adsense ads on the details page of ambisonia.com … check them out here. This should theoretically double my earnings from 10 to 20USD (which is around 1/2 my server costs)… lets wait and see.

The bulk of the adsense research I have read indicates that you have to make the adsense ads appear to be as similar to the content of the page as possible. Arrrghhh. That means the aim is to somewhat ‘trick’ the audience into seeing an add and clicking on it. Now that bothers me.

But at the same time, I have to live!… I have to monetise the site so that I can work full time on it. So here I am, in a poetically contradictory scenario, where I am considering attempting to trick my audience into clicking on more adsense ads, so that I can survive. Is this the beginning of the commercial corruption of my endeavour?

OK, so 2 posts ago I made a list of all the reasons why someone might purchase a CD instead of downloading for free…. and I missed probably the most important one.

Many users will opt to purchase an Audio CD because they want to support the artist.

This begs the question, what percentage of people who could (technically) easily download and play the file would be willing to actually purchase the Audio CD instead? Would it be 5, 10, 20 50, 75%?

When I eventually get the Audio CD sales off the ground, I am going to lg the numbers for this. I think it is a very interesting question.

(post post: Ian notes this article about a writer who has found that his fans are actually willing to pay for his work even after they have downloaded it for free… that’s a good sign)