Other music community Web sites, he said, force musicians to use a Creative Commons license. Though the Creative Commons approach may be useful because it offers blanket contract language, it can be more restrictive of authorship rights.
It's important to note that Indaba, like many social networking sites, makes its money by leveraging the information it collects about its users. The site can sell targeted ads, the bread and butter of Web 2.0. Though producers and managers have started visiting the site to look for new talent, they aren't seen as income stream — yet.
Indaba isn't alone in exploring the potential in this area — the site Kompoz.com is one competitor — and its founders keep the site in "beta" mode as a symbolic gesture. It seems unlikely, though, that Indaba will obliterate the old-fashioned notion of the garage band. Musicians will always enjoy playing together and playing for people. Even Postal Service goes on tour.
But the true potential in these sites is to chip away, even more, at the financial power wielded by labels by cutting costs for musicians and reducing the value of record-production advances, the fleeting coveted dream of aspiring musicians.
It works like this: Online networks reduce the amount of time and effort needed to make a band and then to make a song. Studio time becomes less necessary. And artists can get genuine feedback and ideas from a wide range of people. Because this process occurs before an artist heads to the studio, instead of after, the hope is that better, more interesting and more complex songs will come from smaller artists within a potentially more efficient creative model.
All this reduces the label's bargaining power. Typically, labels offer new bands the promise of money and studio time to develop new songs, in exchange for multi-album deals and payback schemes that favor the label.
While Radiohead and Madonna openly challenge the industry's current distribution scheme, Web sites like Indaba challenge the industry's current, lackluster system of developing new talent. Looks like there is another wagon in the ever-growing circle of industry change.
ABC News contributor Michael Smith is an internationally recognized DJ who has a music-services business. He works with a variety of corporate clients. For more information visit www.smitheventmusic.com or e-mail email@example.com.