I came across a new site called Slicethepie which has an interesting take on the marketing and distribution of music for up-and-coming bands. It has some of the elements that I mentioned in my post about artist collectives, most notably a community-centric model that helps fans connect to artists (including a Facebook plug-in to foster the word-of-mouth advertising that is essential for a new band). The site also holds contests for bands to win studio time to produce their albums. This should help some with the catch-22 that bands face where it takes money to cut an album so that you can make money. None of these concepts are particularly new; sites like Last.fm already provide many of these tools. What makes Slicethepie most unique is its use of a basic concept of economics to look at music in a different way.
In additional to fans and artists, Slicethepie defines the role of a music trader. This is not a trader in the traditional sense of one who trades music files with their friends but rather in the same sense as a stock trader. Music traders on Slicethepie are essentially replacing the role that record labels have traditionally played. The basic unit of trade on Slicethepie is known as a contract unit. These units can be purchased for $3 each (or $1/ea. with the purchase of an artist's album in digital form for $10). As with traditional stock dividends, if a band is successful the stock holders see a share of the profits.
Users rate how much they like an album and Slicethepie pays back dividends at regular intervals to those holding contract units for artists in the top 2% of popularity. This is an ingenious use of the concepts of economics to help bands get over that critical first hurdle. By creating a pressure for people to find the next big thing Slicethepie is focusing the diffuse energies on the internet on a specific task. Not only is the goal to discover the artists that are worthy of funding but, more importantly, to have the community fund them.
If they can make this model work, it truly is a win-win situation. Bands get much needed exposure and (if they're good enough) the funding to establish themselves. Fans can use the internet to provide a more direct feedback about the music that they like - much more so than listening to the radio or buying CDs from retailers ever allowed them. Last but not least, Slicethepie takes their cut from the contract units that fans purchase, some of which they reinvest in the community to ensure its continued vibrancy.
The only unfortunate (though necessary) aspect of this model is its slavish devotion to the whims of the masses. A band's value is based solely on the reviews of users; Slicethepie does not have experts adding input to the system and everyone's vote counts equally. Ideally this democracy is laudable, but the risk is that Slicethepie becomes yet another online niche for the boom-to-bust fads that already plague the online community on a macro-scale. In the end, the community is all about serving the users but I can't help worrying that this will lead to the same kind of one-hit-wonder pop outfits that the labels have been foisting on us for so long.
In any case, I can absolutely see the potential in this idea and it excites me to see other people using the internet to think up new business models. At the end of the day, it can only be good to have more power in the hands of music fans and artists and less power in the hands of the big four and their RIAA attack dogs. When I get a chance, I plan on digging deeper into Slicethepie and I'll be sure to post my findings.