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Two weeks ago I was talking with Rafael Jimenez (Yahoo! México) about the last 2 posts titled “prosumers and the music biz” and he had it very clear that it the industry has to change or die trying. We were not able to come to a clear idea about the path it should take, but I ran into something interesting.

It’s called Sellaband, and it’s basically a system that supports new artists from their fans. They put it like this:

1. Find believers (people who will be willing to give up some cash for the project)
2. Record a CD
3. Make money

Now, the most interesting thing is that Sellaband is supporting free downloads, which I believe is great for promoting new (or maybe not that new) bands. So you raise fans (5, 000 to be exact), and each one of them gives away $10 bucks so that Sellaband can hire an A&R expert that will guide you through the recording process with a producer (also by Sellaband) in a “state-of-the-art” studio. There you can build your CD (actually a limited edition CD) which of course will go to all the 5, 000 believers you gathered, and then you give away the music on the internet so that you can get more fans. Sellaband says they’ll only give away three of the songs which I believe circles around the same concept we’re trying to escape but, what the hell… someone has got to make money!
What they do is that they put up for sale the rest of your songs on their website as paid downloads. Each download costs $50 cents and the profits go to you of course, your believers (interesting) and Sellaband. In addition, the website has advertising that generates profit to all members of this business as well, based on market share which basically means the more unique downloads you generate, the more money you make (and of course your fans will too).

Then you have the choice to ask for more copies of your CD so that you can sell it at gigs (technique proven to be VERY effective), your website, local stores, etc. You can set the price of this CD but you have to save $2 dollars for your fans and Sellaband gets nothing, but they’ll put the CD for sale as well on their own terms. For offline sales you get nothing, for online sales you get an equal revenue share with your fans as well.

I know what you are thinking, these guys must own all my music after all, but they say “no strings attached”. You are free to go whenever you like through the whole process. I find this very interesting as a band member, but also as a music fan. As a believer, you’ll notice you can make an investment and get some money in return (a small one though), but it’s not all about Sellaband or the artists, so it is quite a project.

As for today I haven’t heard of anyone of the artists nor the music that came out from Sellaband but they say there are some success stories so far (from both believers and artists). They also have a chart that shows how much money the artists have made so far.

Pointing the obvious, I’m not sure if this is the answer or the next big thing, but at least it is a new way of making music and money. It is very important that new ideas like this come out and break the paradigm of the music business as we know it.

Found via: Springwise

Update: I forgot to point out that Amazon decided earlier this month to invest on Amie Street, one of the most interesting startups in the music biz. I posted about it on Dixo if anyone is interested. Here is a link to the original post.