the highly attractive cash-back system it has set up for referrers. When I reached Bingham in Austin by phone yesterday, he explained that Surrge has crafted its “variable reward” structure to encourage users to root around in the site’s catalog and be among the first to “discover” and publicize new artists.
It works like this: If you buy a song on Surrge, you tell your friends about it, and if they are then among the first 20 users to buy that song, you get a 50 percent cut of each sale. If your friends are among the 21st through the 30th purchasers, you get a 40 percent cut. If they’re among the 31st through the 50th purchasers, you get 30 percent; 51st through 100th, 20 percent; and 100th or later, 10 percent. What that means—in a hypothetical best-case scenario where you buy a $1 song and refer it to 100 friends, all of whom buy it before anybody else does—is that you can earn $29.50 (19*0.50 + 10*0.40 + 20*0.30 + 50*0.20).
There’s a lot more to the incentive system, but you get the idea. “Within the music community you always have a group of people who are the taste makers,” says Bingham. “They’re plugged in and they’re good at finding new music. My brother Justin, for example, will spend three hours combing through iTunes to find something cool, just so he and his friends will have something new to listen to this weekend when they’re out driving around in the car. He’s going to do that work no matter what. We’re just creating a mechanism so that his friends can get notified when he makes a new purchase, and then when they buy it they’re asked if they want their friends to be notified. As a result, these songs have the opportunity to get distributed globally really quickly.”
Whether it will all work, of course, won’t be apparent until a few weeks or months after today’s launch—the site’s group of beta testers wasn’t large enough to give the incentive system a fair test. But the system may have an appeal beyond typical teen or twenty-something music fans, since it also gives music bloggers a legal way to post songs or song snippets and promote their favorite bands.
One of the big breaks for Surrge artist Eric Hutchinson, for example, came last spring when celebrity-hound blogger Perez Hilton mentioned his music on PerezHilton.com as part of a concert preview. “After Perez announced that Eric was the ‘breakout artist of the year,’ there were 400 people jammed into this little hotel concert space built for 150,” says Bingham. “It was all because of the power of the bloggers, who have sometimes been accused of ‘stealing’ by posting these bands’ songs, but who really just want to help. We’re creating a legal way to do that—we’ve negotiated with the performing organizations like ASCAP and taken care of all of the rights for anything that’s up on our site.” And bloggers who also act as scouts or referrers can turn their influence into cash.
As I was talking with Bingham, the idea of all this cash changing hands reminded me a bit of the payola era, when record labels paid DJs under the table to play certain albums. I asked him, in a tone thay may have sounded cynical, whether fans and bloggers really want to become shills for musicians. In his answer, Bingham explained (very politely) that I was a bit out of touch with today’s Internet music culture.
“It’s less about making the bands successful and more about connecting with your friends and sharing great music with them,” he said. “If I’ve got 50 friends plugged into my Surrge network and I go out and dig up a new song, they really want to know. With our system, the people who are really good at recommending new music will see their status inside Surrge go way up.” Along with the cash in their account. Which they can use to buy more tunes, which they can then recommend to their friends—in a big musical merry-go-round that may soon be getting very crowded indeed.
