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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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Mid Year Music Biz Report Card: CDs Down, Digital Sales Up

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Song Stories

“Bird on a Wire”

Leonard Cohen | 1969

While living on the Greek island of Hydra, Cohen was battling a lingering depression when his girlfriend handed him a guitar and suggested he play something. After spotting a bird on a telephone wire, Cohen wrote this prayer-like song of guilt. First recorded by Judy Collins, it would be performed numerous times by artists incuding Johnny Cash, Joe Cocker and Rita Coolidge. "I'm always knocked out when I hear my songs covered or used in some situation," Cohen told Rolling Stone. "I've never gotten over the fact that people out there like my music."

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