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How would you like to buy music online and make money for doing so? Popcuts, an innovative new online music store, offers such a deal. Recently launched, the Popcuts music site allows customers to pay 99 cents for DRM-free (digital rights management) music.  Once customers purchase songs, they subsequently get paid every time someone else buys the same song. Right now the company pays customers in store credit, but hopes in the near future to actually pay cash.

The business model for the site is that the earlier you buy a song, the larger your cut of future sales. Popcuts calls this “trendsetting,” where it rewards customers to “be ahead of the curve” in helping discover and promote new artists. Popcuts will promote the trendiest fans, who in turn are encouraged to brag about great music. Trendsetter “earnings” also are highlighted on the site.

Hannes Hesse, one of the company’s three co-founders, said the idea for their company came from a desire to better align the interests of artists who want to sell their music and fans who want to get music for free.

Popcuts’ current music library is admittedly small at approximately 700 songs, but its tracks are growing and should expand rapidly after a recent deal with music distribution company DashGo Inc. For the time being Popcuts is only selling music from unsigned indie artists, but CEO Kevin Lim says that the company will pursue deals with record labels once it has perfected a new payment model. 

Popcuts has a compelling idea, but its success may be determined by the generosity of the artists it signs. The store’s default split gives 60% of revenues to bands, which is competitive with other online stores. But, the default 30% allocated to fans may not be enough of an incentive to drive many more purchases, and bands may find they have to give up more of their proceeds to drive sales.

Regardless, it’s an innovative experiment that the music industry no doubt will be following closely.