As a serious music fan who used to pride himself on being ahead of curve on the latest and greatest artists, my recent stumbling upon popcuts was music to my ears (awful pun acknowledged).  The community, launched by three music afficionados, with certain haunts of pyramid-scheme-like simplicity, rewards early adopters for the purchase of up and coming artists’ tracks.

By rewarding those who are really taking a chance by purchasing cutting-edge/often unheard of music, I think popcuts is really on to something here…Each track sells for 99 cents, of which the site takes 10-20%, with the artist able to dictate how much of the remaining funds they would like to claim.   The remainder of the $0.99 is earmarked for distribution to every person who has already purchased the track.

While I wouldn’t suggest liquidating your savings account to make a quick cash-grab (unless your ideal portfolio consists of music credits), the site’s value proposition capitalizes upon important principles that I think will make this going concern, if not a solid buyout target for one of the bigger music stores out there (shudder):

1. Rewarding early adopters – Getting Paid: As a gadget geek and a reformed overzealous music experimenter, I know the pain of early adoption costs.  Site founders express their intentions to reward early buyers with cash as opposed to music credit, but for the time being, at least purchases can be seen as investments in future discoveries.

2. Rewarding early adopters – Earning Street Cred: There is little pleasure greater for early adopters than the ability to be known as such.  Top “earners” are featured on the popcuts homepage, capitalizing upon the social recognition and reverance that may come from being a trailblazer.

3. Low (entry) cost for artists: Unproven artists can upload their tracks and take advantage of the low-cost distribution model that only costs when the artist gets paid.  The ability to set the percentage of revenue demanded per track will allow for the evolution of pricing based on the artists’ stage in their popularity lifecycle.  There may even be a solid value proposition here for “known” artists whose name can sustain sales, with a lesser need for label support.

4. Harnessing (niche) fan communities:  While it’s no challenge to find someone with whom to chat with about the latest pop sensation, this same experience is not enjoyed by fans of lesser-known, often local artists, whose fan base can often be very dedicated and eager to get the word out there.

5. Power to the artists:  Artists retain full rights to their music and are able to peddle their tracks elsewhere, simultaneously.

We’ll continue to keep an eye on popcuts and the music industry as we always do here at Wikinomics and here’s to hoping the little guys pull out a victory over the giants in this one.