A New Twist on Online Music: Pay Your Fans

Popcuts.jpgEver think your taste in music is so good, people should pay you for making it known? That’s the idea behind Popcuts, which publicly launched its Web site in early August, as CNN reports. The online music store charges users 99 cents per song, which is very similar to how other services like the iTunes Store and the Amazon MP3 Store work.

However, whenever someone else buys the same song, those who have already bought it get paid in credit that can be redeemed for more Popcuts music, the report said. “The earlier you buy a song, the larger your cut of future sales.”

Right now, the site isn’t handing over hard cash; instead, it’s paying its users via credit to buy more songs. But the site owners plan to change that in the near future. The idea is that fans will take a risk on new and interesting music, possibly in the hopes that they’ll reap the rewards as that music suddenly becomes discovered and therefore more popular.

Mike McGuire, an analyst for Gartner Inc., said in the report that Popcuts’ model of sharing with users can be very effective, since they may feel as if their purchases are helping to invest in the bands on the site. “I as a consumer can say, ‘Hey, I’m doing my part,”‘ McGuire said.

It’s a new one on us, that’s for sure. And any service like this will work on mobile devices, since they’re selling unprotected MP3 files that play anywhere. The article said that Popcuts is taking 10 to 20 percent of song sales. Artists decide how much of a cut they get, and the rest goes to the fans. The catch? So far they’ve only got about 700 songs to sell; obviously no major labels are involved yet.