Magnatune has always done things differently. It was one of the first online music services to allow its customers to choose how much they wanted to pay for an album. From its inception, the service never featured DRM'ed music and always offered its albums in alternative formats like WAV, OGG, FLAC and AAC. On its website, Magnatune offers a commercial-free streaming plan starting at $5/month (users can choose to pay more) and a download membership that starts at $10 a month.

Sadly, the first version of the iPhone app doesn't support these membership options, but according to Magnatune's announcement, the next version will allow paying members to stream announcement-free music.

Features

The app itself is pretty straightforward. You can browse Magnatune's catalog by artist, album and genre. One neat feature of the app is that it remembers where you left off when you turn the app off - or when you get a call - and prompts you to return to that song when you start the app again.

Shopping

The Magnatune store allows users to buy songs right from their phones. Most of Magnatune's artists are featured in the iTunes store, and the app simply takes users to the iTunes app to buy the song. This, though, also means that potential buyers can't choose how much they want to pay for an album.

Record Labels on the iPhone

Another label that has also released an iPhone app recently is Ghostly International. This app (iTunes link) features only a selection of Ghostly's catalog, however.

We have talked a lot about how bands and artists have started to look at iPhone apps as replacements of traditional albums. Hopefully, more music labels will now also follow Magnatune's lead and release their own apps. With built-in purchasing and music discovery, this is a logical extension of the app-as-album trend - but then, the major music labels aren't exactly known for being logical.

We really like what Magnatune is doing and we think this business model is great, but we're concerned that the service is still too antiquated in its music delivery to get customers beyond the fact that it has a really obscure catalog.

The Problems With Magnatune

Unfortunately, Magnatune doesn't offer much in the way of discovery of the best music on the site. There's some playlists by genre and that's good. You can see a handful of the top sellers. In this era of recommendation technology, though, the company should really facilitate discovery better than it does. Millions of people are now used to visiting Last.fm, entering a known artist's name and then getting hours of high-quality related content. It's going to be hard to get too many of them to go back to a black box point and click catalog.

That's especially the case when you're looking through a catalog of items you've never seen or heard of before. Independent music stores are at a huge sales deficit because their products have no name recognition. Additionally, and no one likes it when I say this (but it's true), most of the music on sites like this isn't any good! If you've ever looked for Creative Commons music before you know that's the case. I dare you to post links to your favorite independent and CC music in comments.

None the less, you've got to admire what they're doing at Magnatune. For fans of classical music and new age piano, there may be a lot there for you. Otherwise, we're not so sure.

Additionally, it's going to be hard for even a business model this cool to top the all around awesome new music service that Lala just rolled out, for example.