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New Site Takes Stock Market Approach to Digital Music Vending

September 4, 2008 11:44 AM ET

New digital music site Popcuts has adopted an interesting, stock market-like method to lure people toward its service. When you buy an artist's song for 99 cents, you're immediately invested in that track. If the song continues to sell to other users, you're awarded money to your account. The earlier you purchased the song, the higher percentage you get to the buyers who bought it after you. In the long run, Popcuts hopes you can turn that money earned into actual cash, but as the site is still in its infancy, it can only offer credit towards future song purchases. "We thought that by providing this extra incentive to buy a song legally, namely, owning a stake in that song, would make it more attractive to buy," said co-founder Hannes Hesse of his Berkley, California-based site. Popcuts takes in a 10-20 percent cut of each purchase, then leaves it to the artist to decide their own percentage. From there, the rest of the earnings go towards the users' accounts. It's an interesting strategy, but it's currently being utilized on a bare bones catalog of 200 obscure artists and roughly 700 songs, with their biggest seller right now being Red Light Knights' "3 Way Highway." Popcuts hopes to expand its library with non-exclusive deals with more distributors and record labels in the near future.

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Song Stories

“Vicious”

Lou Reed | 1972

Opening Lou Reed's 1972 solo album, the hard-riffing "Vicious" actually traces its origin back to Reed's days with the Velvet Underground. Picking up bits and pieces of songs from the people and places around him, and filing his notes for later use, Reed said it was Andy Warhol who provided fuel for the song. "He said, 'Why don't you write a song called 'Vicious,'" Reed told Rolling Stone in 1989. "And I said, 'What kind of vicious?' 'Oh, you know, vicious like I hit you with a flower.' And I wrote it down literally."

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