Some investors tell us there’s not enough opportunity in music-related innovation to merit their money. But apparently, others disagree. OurStage, one of many sites that tries to nurture budding artists, has raised $13 million from a consortium of angel investors through Signature Capital LLC. Another, mTraks, has raised $550,000 from an unnamed investor.
OurStage is in some sense trying to duplicate traditional music charts — but for unknown artists. First, bands upload their tracks and videos to the site, then they try to get fans to vote their works up OurStage’s chart of top acts. Winners get prizes, like performance slots at music festivals.
OurStage is making money by selling ads on the site, particularly branded channels for specific types of music, and for individual artists. It counts AOL Music as a partner, and it’s hoping to work with record labels, to offer professional channels for bands that rise through its ranks. To help show a label the rising-star status of an artist, it also offers metrics on traffic that an artist draws on the site.
MTraks, meanwhile offers a place for artists to create their own profiles (which is basically like MySpace and many other, larger sites), but focuses on independent acts. The San Diego, Calif.-based site lets you buy music by the song — free of digital rights management — or pay $9.99 per month to subscribe and listen to any song on the site.
Established competitors that are experimenting with new forms of giving music away for free including iLike (see its launch of R.E.M.’s latest album ), Imeem, Last.fm and others. Three months ago, Last.fm began letting users preview some entire songs before buying them. Today, it says these tracks have seen a 119 percent increase in CD sales and downloads through its partner, Amazon’s online music store — although CBS-owned Last.fm isn’t releasing figures for how many tracks and how much money that adds up to. More here.