FreshNerd

Don’t you hate it when you find a new band and you tell everyone about them and they look at you like you have a booger in your nose. Then what happens? A year later, they end up being one of the biggest bands next to the Beatles (well, something like that). I introduce to you Popcuts, a company that pays you for a band becoming popular. Don’t believe me? Here is what TechCrunch has to say:

When an artist signs on to the store, they allocate a certain portion of the revenue generated by their songs to go back to their fans. This money is then distributed according to how early each user purchased a song (the earlier you buy, the more you make). For example, the band My First Earthquake has decided to pay out 30% of its revenues to its fans. The earliest adopters (say, the first dozen people to buy the song) will break even after the song has been purchased by around 25 other people. Fans buying the song later on will still earn credit, but it will be earned at a much slower rate (the site will tell you how quickly you’ll be earning credit before you buy a song).

For the time being Popcuts is only selling music from unsigned indie artists, but CEO Kevin Lim says that the company will pursue deals with record labels once it has perfected the new payment model.

Popcuts has a compelling idea, but its success may well lie in the generosity of the artists it signs. The store’s default split gives 60% of revenues to bands, which is competitive with other online stores. But the default 30% allocated to fans may not be enough of an incentive to drive many more purchases, and bands may find they have to give up more of their proceeds to drive sales. In any case, it’s an experiment that the music industry will probably be following closely.