Unsigned Artists Make Money Online

March 5 -- Recording studios may be running scared from the free-download threat of Napster, but unsigned artists are already making money for online music.

On Thursday, Amazon.com inaugurated a “tip jar” by which listeners can volunteer to give cash to artists they like. Amazon’s effort joins MP3.com’s year-old “Payback for Playback” system, where musicians can upload their music to the Net to get a chunk of $1 million a month.

For 39 of MP3.com’s roughly 150,000 artists, that’s translated into more than $20,000 they each made off of free downloads last year. And even artists making less dough say they’re satisfied with the rewards they’re reaping from this new phase of the music business.

“There’s quite a bit of money there,” said Eric Schierer, an analyst with Forrester Research.

Making Money With Music

Martin Lindhe dumped all of his music to MP3.com because he was moving, and didn’t have a CD burner. Courtnee Fallon Papastathis writes hers in her spare time, “to unload.” Emily Richards, a folk-rock pianist and singer, is qualified as a CPA.

Now Lindhe, as the electronic artist Bassic, makes more than $70,000 a year from MP3.com. Richards made more than $14,000 last year. Papastathis, as Not Applicable, has made $4,000 since November 1999 — and that’s not counting CD sales for any of them.

None of them is looking for a major label deal, though they’ve all had offers from large companies. And none thinks free downloads will be the end of CD sales — or of musicians making money.

In buying CDs, “what you pay for is ensuring the quality of the product,” Lindhe said. “If you really want to make sure that the songs are correct and that you get the right artwork and all that, people will pay for the experience.”

In MP3.com’s payback scheme, $1 million a month is doled out proportionately to the site’s artists based on the number of unique users who’ve listened to their music. Payments can range from zero — if you’ve had fewer than 15 listeners — to last year’s top earner, electronic band 303infinity, which made $165,392.92.