Forget Napster, when it comes to free music, Jim Milligan has a real revolutionary idea. After getting rich in the mutual funds business, he is taking on the music industry in a simple, yet most unprecedented fashion. He is giving away CDs. Millions of CDs to anyone who wants them. All of it done in the hopes of exposing Milligan's roster of artists and making them superstars. This isn't a record club or a subscription service, all the consumer has to pay for is shipping and handling, which is only $1.75 per CD. Of course, there has to be a catch---and there is. The artists are independent and relatively unknown, and there's only a handful of them, so there's not a lot of variety. But, then again, we are talking free here.
So how is the music? Not too bad considering the circumstances--and that will be the deciding factor when it's all said and done, free or not. The most promising disc I've heard so far is by Troy Horne, a soulful acoustic rocker whose music sounds like a mix of Seal, Jeffrey Gaines, and Lenny Kravitz. He's got a lot of talent, and well worth more than the cost of postage. Is he good enough to be a huge star and carry the name of FreedomZone into internet ubiquitousness? We'll just have to wait and see.
The ultimate question is: What posesses a man like Jim Milligan to take a chance like this? Is he a genius, or is he nuts? It may be a little of both---find out what he has to say in this exclusive interview and decide for yourself...
Q: You're giving away your product--millions of CDs from your roster of artists. Most would say this is a losing proposition. Why do you think it will succeed?
A: On the surface, it probably does appear to be a losing proposition. However, there are several factors that make this a viable plan. As the volume for orders increases we actually break even at $1.75 for shipping and handling. So, in the long run we basically cover all of our costs. Many of these CDs will be distributed by non-traditional organizations such as Wall Street Firms, Professional Sporting Events, Political Campaigns, Fund Raisers, etc where the CDs are free to the consumer at the expense of the participating organizations.
Q: Why give away CDs--why not jump on the mp3 bandwagon? How does giving away something help the artist?
A: Everyone seems to be focused on downloading as the major threat. I think they are missing the boat. Until the internet goes broadband and the hardware mainstream, downloading is not a solution for the masses. Even then I'm not so sure the masses would replace the convenience of buying a CD with downloading. I have yet to find one person in all of my business meetings that has downloaded more than once. People pay for convenience. The success of 7-Eleven's are a great example of that. So, how does giving it away for free help artists? Most artists I have met believe that the key to their success is people hearing their music. My committment to them is to do everything possible, within reason, to bring their music to the world and let the world decide who should have that fame and fortune. The industry today is driven by a handful of gatekeepers. We are trying to eliminate this bottleneck and directly connect the supply with the demand. Our mission is for 1 million people to hear their music and if 10% or 100,000 people become fans they will have a good fan base to build on with their subsequent CDs.
Q: Why would a successful businessman want to take on the music industry?
A: I don't see it so much as taking on the music industry. I'm challenging the status quo as I have done my entire life. In fact, I see FreedomZone as becoming a partner with the majors as a low risk farm club. As our distribution and promotion grow we will transform from a farm club into a major without the massive infrastructure of the majors. As a result, we will offer equivalent services of the majors while compensating artists 10 times that of industry standards.
Q: We've all heard about the questionable practices of the major music labels--how does your approach help the artists?
Most of our artists have avoided the majors due to either the compensation structure or being forced into a particular box. We're basically splitting the revenue generated from CD sales while giving the artists freedom to create as they choose. Of course, we have quality standards but we also believe we shouldn't get in between the artist and their fans. I would hate to think Dave Matthews, for example, has a bunch of songs he that he loves but can't publish due to his label's interference. We act as a catalyst and pipeline for artists, not a barrier and filter.
Q: The internet is changing everything so much, and the music industry is obviously in new territory. Even though the majors are afraid, they are still selling records at an all time high. Where do you foresee the point of no return when the internet changes everything for everybody--a truly level playing field for majors an indies?
A: I don't believe the internet can level the playing field, but it does lower the barriers to entry. At the end of the day, labels need high quality talent combined with promotion, demand, distribution and increased artist compensation. It's the chicken and egg problem. You can't get the talent without distribution and you can't get distribution without the talent. The key to our success was and is our ability to sign great talent that believes in our ability to get the distribution, demand, etc. I think it will be difficult for others to duplicate our model and relationships with highly leveraged organizations. It's tough for the majors to make our model profitable due to their infrastructure and equally tough for startups to match our partnerships as a result of my career on Wall Street.
Q: Tell me a little bit about your artists. Why are you pushing them--what sold you on their talents?
A: There are a couple of things that have sold us on our artists. It is a combination of their raw talent with their passion, drive and determinaiton. In fact, this company was created as a result of meeting A.J. Bay, 19 yr old Canadian, while he was playing in the parking lot prior to a Dave Matthews show. That was 1 yr ago, but he still hasn't recorded a CD, which is fine. He's been living in my guest house, named the FreedomZone about 5 years ago. He's been practicing 12 hours a day and just starting to put a band together. Musicians are people, not products. We're looking for extradordinary people that can produce extradordinary products.
Q: A lot of independent musicians visit our website--are you accepting demos?
A: Absolutely. We're very very selective though. Our current group of artists have set a standard that we are committed to constantly trying to improve. We can't and won't sign any artist of lessor talent than our current group. That's our biggest challenge.
Q: You're also giving away art prints and indie films--why not just stick to music, which would appear to be easier to promote and more profitable?
A: The overall added value we bring to the world is our ability to harness creative energy and catalyze its transformation into a product of great demand and profit. Creativity is the common thread in FreedomZone. Art and film can be incredibly profitable, particularly with our business model. The fact that art and film appears to be more challenging creates the opportunity.
Q: What do you personally want to accomplish with this project? At what point would you say you did what you set out to do?
A: Ultimately, I want to help people. The main reason I left Wall Street is that I didn't feel like I was helping enough. It was all about making money which gets old after a while. One of my biggest goals is to inspire kids by my actions, rather than words. When FreedomZone succeeds, not only will many artists empower themselves financially while pursuing their passions, but hopefully many outsiders will be inspired to step up to the plate and out of the box.
Q: Anything else you'd like to add?
A: Change can be very difficult. Thank you for giving it a chance.
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