Topspin Media to music labels: drop dead

Despite desperate attempts to revive it, the era of big music labels has been dead and rotting for a long time.

Topspin Media, a just-launched startup led by the former GM of Yahoo Music, wants to throw some dirt on its grave. The Santa Monica, Calif. company builds tools that allow musicians to market themselves and distribute their music directly to fans — no middleman involved.

This concept isn’t new, but Topspin’s timing is right: Last year, Radiohead famously rattled the old guard by ditching its label, selling its newest album online and letting fans pay whatever they felt like paying. As the buzz over this move reached crescendo, Trent Reznor of Nine Inch Nails declared that his band would follow suit and sell its next album on its own terms.

When the group’s 36-track Ghosts I-IV came out in March, you could get the first nine tracks for free online. If you wanted the other 27, you paid $5 dollars for lossless-quality downloads or $10 for two CDs. More devoted fans could pay $75 and get all of the above plus a DVD with remixable versions of every song and a 48 page book of color photographs. Finally, for the fanatics, Nine Inch Nails offered 2,500 “Ultra-Deluxe Limited Edition Packages” (pictured here) with all sorts of extras, each one numbered and signed by Reznor, himself. Within two days of its release, every single one of them was gone.

Some have argued that while models like this might work for established artists, musicians standing outside the bright limelight won’t stand a chance. There are a number of startups that couldn’t disagree more.

ReverbNation lets artists synchronize their self-promotion efforts on profiles across the social networks, while Tunecore makes it easy for them to distribute their music across iTunes, Amazon, Rhapsody and Napster. Topspin is more focused on helping artists market themselves and in this regard is similar to Ticketmaster’s Echo, which offers a set of tools to build fan clubs, blogs and direct marketing campaigns. Unlike Echo, however, Topspin is not owned by a big monopolist.

Topspin Media’s first offering is a mix of Customer Relations Manager and sales platform designed to keep artists engaged with their serious fans and keep these fans spending money on the artists. Currently available to a select few, including The Dandy Warhols, Josh Rouse and Imaad Wasif, this product combines permission-based direct email and analytics with a content management system and sales outlet.

Artists can sell albums or songs a la carte, charge a yearly subscription or both. The incentive for fans is that going straight to the artist gets them extras they wouldn’t get at iTunes or A $34.99 annual subscription to The Dandy Warhols, for example, buys you their new album before it hits stores, a “rare” B-side, access to pre-sale concert tickets and exclusive content that the band intends to release over the course of the year.

While a yearly subscription of $35 dollars may be a bit high, the idea of targeting passionate fans and hooking them with ways to feel special seems sound. Whether or not the ideal distribution mechanism is a destination site for each artist is a separate matter, but there’s a lot to like about the way Topspin Media does business.

Using Topspin, mid-tier musicians can market their music as soon as it’s been produced, earn 80-90 percent of every sale and get checks delivered every month. This stands in stark contrast to the label days, when most musicians made the narrowest margins — if they made anything beyond their advances at all. Topspin says this is only its first product and that while this one focuses on extracting money from existing fans, the next will be focused on creating more of them.

TechCrunch’s Mike Arrington has railed against “crazy musicians [who] still think they should get paid for recorded music,” and has argued that because the cost of reproducing recorded music is zero, it no longer makes sense to view it as a source of revenue. In the new era, he writes, “popular artists will still make a very, very good living. Others will have to decide if love of their art is enough to keep going.”

But perhaps the dichotomy is not so stark. If Topspin’s assumptions are correct, it — or a company like it — will create a market that lets those in the middle hang onto the dream.

The company has raised an undisclosed sum from Redpoint Ventures and says it’s in the process of closing its second round.