Not to fear, the Smithsonian Institution is adopting a pay-per-download model as a new opportunity to generate income and offer greater access to its unique catalogue. How unique? Two titles currently for sale on the organization's Web site include Abayudaya: The Music of the Jews of Uganda and Cowboy Poetry Classics.
Smithsonian Folkways Recordings, the nonprofit record label of the Washington, D.C.-based national museum, has long struggled to efficiently market the recordings in its massive archives. On Monday, however, the organization announced that it will soon make all 33,000 of its titles available for download for 99 cents each. The Smithsonian plans to launch the service April 1 and is in the process of converting the material to .
The dawn of the pay-per-song era, spurred largely by the success of Apple Computer's iTunes service, presents a unique opportunity for the Smithsonian. Previously forced to be content with marketing full-length albums or compilations of its collections through traditional mail-order or e-commerce methods, the institution will now be capable of allowing people to purchase the specific recordings they might be looking for at a reasonable price. The collection includes everything from American Indian dance music to the earliest recordings of jazz.
"The institution's goal is to increase the public's knowledge, and the pay-per-download model gives us a much greater ability to do so," said Richard Burgess, director of marketing for Smithsonian Folkways. "We've always been able to generate a fair amount of traffic on our site, but that didn't necessarily lead to sales of mail-order CDs, and we think (the digital service) could lead to much greater distribution of our content."
Burgess said many buyers were turned off by the prospect of paying $10 to $15 for a cassette or CD full of music they hadn't heard before. Now, people who are seeking a title or two for research purposes, for example, may be much more likely toat less than one dollar per title. The online format also will give people a chance to hear music samples before ordering.
And unlike, which has conceded that iTunes is , the Smithsonian feels it can achieve a greater profit margin than mainstream outlets. The institution is working with Peppercoin, a Waltham, Mass.-based online payment company that aggregates credit card charges for retailers and consumers, which allows its customers to keep a larger portion of each sale than if they dealt directly with credit companies.
"We're under no illusion that we can generate the same kind of traffic as iTunes," Burgess said. "But by working with (Peppercoin) we can widen our profit margins considerably, compared to the relatively thin profit we'd make trying to deal with the credit card companies."
Burgess estimates that the Smithsonian would pay 25 cents, plus a 2 percent to 4 percent variable interest rate, on each 99 cent transaction if it were dealing with the credit card companies. Through Peppercoin, which is run by former executives from Inktomi and Lucent Technologies, the Smithsonian will pay about 7 cents per transaction.
"We think what we can offer merchants is a tremendous opportunity to be creative in how they sell and price items in terms of building profit margins with sales online," said Robert Kiburz, chief executive of Peppercoin and a former general manager of billing at Lucent. "There are a lot of companies out there like Smithsonian trying to figure a way to monetize assets online; given the success of services like iTunes, and our ability to help widen profit margins, I think there's a lot of potential for companies that couldn't consider this kind of e-commerce in the past."