Music meets politics in Darfur campaign

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Here's how it works. People sign up for a free account at GoodStorm Music. Once approved, they can make as many MixedTapes as they want containing up to 100 songs. To make a MixedTape, users can upload songs from GoodStorm's collection, or music they've personally created or hold the rights to. That MixedTape can be added to any Web page. Whenever someone buys a song from that widget (which processes transactions by PayPal, encrypted by VeriSign), the seller makes 5 cents per song download. So if a visitor to the page buys an album of 10 songs from the GoodStorm library, the seller would make 50 cents.

The economics for an artist or rights holder are dramatically higher, however. Songs to be hosted by GoodStorm are uploaded by the artist or record label. And when someone buys a song from the MixedTape, the artist or rights holder makes 65 cents per download or $6.50 for a standard album of 10 songs. A fan selling their music would still make 5 cents for that same download.

GoodStorm provides a real-time accounting of sales and revenues for artists, record labels and fans from its site. The company, which has patents pending on the software, takes a cut of 29 cents on the sale of a song. It also expects to sell advertising, on top of tickets and merchandise.

"While it is free for fans and smaller labels, the technology is not free to larger music companies such as Warner, EMI (and) Sony, and we anticipate that they will license the technology itself," said Yobie Benjamin, co-founder of GoodStorm.

Although it's still nascent, small record labels believe it could change the game online by tapping into fans' passion.

David Katznelson, who runs the independent record label Birdman Records, said he plans to promote his artists with MixedTape. Katznelson, who signed such artists as the Flaming Lips while working at Warner Brothers for 10 years, said the technology eliminates the online store as a link in the chain for discovering, listening to and buying music.

"No other service has the potential for the viral spreading and sale of music," Katznelson said.