Hitting the Jackpot

Entrepreneurs are hungry for the killer app that will revolutionize—and monetize—
music on the Internet. Koleman Strumpf, professor of economics at the University of
Kansas School of Business, analyzes the business plans of four hopefuls.
AmieStreet

HOW DOES IT WORK? Pure-

intentioned DIY artists

upload their music, which

is initially offered for free.

But once they become

popular, the site does

their selling out for them:

As downloads increase,

the MP3s get more

expensive, maxing out at

98 cents per track.

IS IT WORKING? AmieStreet

hasn’t broken any new

artists (unless you’re

familiar with Hypnoskull),

but already-established

ones like Cold War Kids

and Justice are selling

albums through the site.

THE ECONOMIST SAYS:

“Basic theory suggests

there’s wisdom to charg-

ing more for something

that’s popular, but I’m

not sure this model

motivates customers to

tell friends about new

bands—by the time they

go to buy a song, it’s more

expensive.”

SellaBand

HOW DOES IT WORK? If you

enjoy venture capitalism

but hate making money,

SellaBand.com could be

just the thing. Bands post

demos and solicit $10

donations from fans. Once

they’ve raised $50,000, the

site hires a producer who

isn’t Timbaland and sends

them into the studio. All

profits are split between

the site, the musicians,

and their investors.

IS IT WORKING? Of the

site’s 6,600-plus registered

artists, 14 have made it

to the studio. Nobody’s

won any Grammys yet,

but Netherlands goth

metallers Nemesea scored

a distribution deal through

Rough Trade in their

home country.

THE ECONOMIST SAYS:

“I’m a little skeptical. The

customer is paying $10 in

the hope that he’s going

to get a CD…in a year.

Also, people are suppos-

edly investing to get a cut

of the proceeds, but there

probably won’t be any.”

Strayform

HOW DOES IT WORK? In

18th-century Vienna, art

patronage could buy you

a Mozart symphony. On

Strayform.com, it can help

fund a song by Rhode

Island–based singer Bob

Ricci about mastering

Photoshop. Artists submit

proposals; fans donate

money and in return can

get a production credit

or have their name

mentioned in the lyrics.

IS IT WORKING? The site

launched in August, and

only a few proposals have

been funded so far. But

baby-boomer Dallas trio

Acoustic Distortion did

get some publicity when

their local Fox News

affiliate cited them as part

of a story on Strayform.

Next stop: the Garden!

THE ECONOMIST SAYS:

“There’s a nonegalitarian

sense to it—you’re

disproportionately

rewarding people who

pony up the most money.

And the lack of immediacy

makes me skeptical.”

OurStage

HOW DOES IT WORK? On an

Internet full of Sanjayas,

Kelly Clarksons can be hard

to find. OurStage simplifies

the process with an

American Idol–style voting

competition, in which

visitors rank artists’ songs

and decide who wins a

monthly $5,000 prize.

IS IT WORKING? Since

launching last April, the

site has given away more

than $250,000 but hasn’t

discovered any next big

things. Still, October’s first-

place winner was a scrappy

singer/songwriter named

Jason Schwartzman, and

he seems to be doing

pretty well for himself.

THE ECONOMIST SAYS:

“Other companies have

tried ad-supported music,

and none of them have

taken off. But this site

has a filter—you get what

economists call a network

effect, where a couple of

artists get a dispropor-

tionate amount of atten-

tion relative to everyone

else, and that’s probably a

The Spin

20Ranking on Pop

Culture Since 1998

1

REAL METAL VS. HIPSTER METAL The “tastes

great”/“less filling” debate of this generation

2

STEVE GUTTENBERG, WHERE ARE YOU?

Wall-E desperately awaits your cameo

3

ARGUING ABOUT VAMPIRE WEEKEND… Is so last

month. Literally. Did you even read our March issue?

4

PORTISHEAD REUNITE

Not so fast, Sneaker Pimps

ANDY SAMBERG DATING JOANNA NEWSOM

5

Meanwhile, Bill Hader couldn’t even get

St. Vincent’s digits. Oh, snap!

6

KANYE WEST LAUNCHES SEARCH ENGINE

Look for 50 Cent’s webmail app—coded in

Javascript, beeyotch!—the very same day

“I DRINK YOUR MILKSHAKE!” ENTERING THE

7

POPULAR VERNACULAR Makes us really, really

crave a milkshake

8

LIL WAYNE’S THA CARTER III Approaching Chinese

Democracy–like levels of tardiness

9

TV SHOWS RETURN FROM STRIKE-MANDATED

HIBERNATION See you later, books! Sucks to be you!

10

DENNIS WILSON’S PACIFIC OCEAN BLUE REISSUE

Harmonies you could swaddle a toddler in

11

BEATLES HOTEL OPENS IN LIVERPOOL

Bookings are soft for the Brian Epstein suite

12

TAPES ’N TAPES’ SOPHOMORE ALBUM

Honest to blog, it’s really good

13

TRENT REZNOR IN RUMORED TALKS TO COMPOSE

FIGHT CLUB MUSICAL Opening number: “The Jazz

Hands That Feed”

14

OFFICIALL Y PLAYED OUT The word “chanteuse.”

Spin now prefers “music maidens.”

15

CNN’S MAGIC WALL Beating Fox News’ Fantastical

Partition by a landslide

16

SATISFACTION, SHE CAN’T GET NO

Jerry Hall, shilling for Levitra

SPRING’S NEW FASHION TREND: DROP-CROTCH

17

PANTS Will make you look like MC Hammer.

Fierce! Brilliant!

18

EASTER?

We don’t even know her!

19

BASEBALL IS BACK And Whizzinator sales are

through the roof

20 RYAN ADAMS POSTS BREAKUP POETRY ONLINE?

In which he reveals he is the man from Nantucket

CAMERON S TE WART (REZNOR)

References:

http://SellaBand.com

http://Strayform.com

http://WWW.SPIN.COM

http://amiestreet.com/

http://www.sellaband.com/

http://strayform.com/

http://www.ourstage.com/welcome

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