August 16, 2005 12:44 PM PDT
Start-ups let fans sell music online
A handful of services now available or launching soon aim to turn ordinary consumers into digital-music retailers, giving people the ability to sell music from their own Web sites and make a little money in the process.
The idea draws in part from the venerable "street team" promotions in which fans--or at least people who might plausibly be fans of a band--are deputized by record labels to talk up an artist or album among their peers. The new companies hope that an online version of this word-of-mouth marketing, in which an artist's devotees can be given the power to sell songs themselves, will be even more effective.
"We've never really been able to track whether kids got in their cars, went to the store and bought that record they just heard about," said Ryan Dadd, president of BurnLounge, a start-up aiming to launch its service later in the year. "Now we're saying, let's take those loyal fans, who are really evangelical about artists, and go into business with them."
The digital services are melding traditional record industry street marketing with the long-established practice of e-commerce affiliates, most familiar from the "Buy this book" Amazon.com links that can be found on every author's Web site.
It's not a new idea in the digital-download sphere, either. Apple Computer's market-dominating iTunes store encourages customers to become affiliates, providing a 5 percent commission on any sales generated by customers who enter iTunes through that external link.
The newer companies are aimed more directly at turning listeners into marketers and retailers, however.
One of the start-ups, dubbed PassAlong Networks, already operates the main digital download store inside eBay, and has links to several of its stores inside the Windows Media Player.
That company encourages shoppers to "pass" links to a favorite song or playlist to other people who might like it. Anytime somebody buys a song as a result of that link, the original shopper gets points that can be redeemed for additional music in the PassAlong store.
BurnLounge's model is aimed more directly at record label fan clubs and other marketing companies that want to turn their fans into direct marketers. As currently planned, it will provide the infrastructure to let fans set up a Web site from which they can sell songs directly, handling credit card transactions and digital delivery without people needing any technical knowledge.
The company plans a basic level of service where people selling music from their site will be repaid in points that can be redeemed for more music or promotional products from a record label. If the would-be retailer signs up for a higher level of service--which will cost an extra $7 a month in fees--sales will be translated into cash, at the rate of at least 5 cents per song sold, or 50 cents per album, Dadd said.
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