We started in 2003 and just kind of stumbled onto this model because we had no other options. It wasn't planned out like I just described, although I 100% believe it is the business model of the future for independent artists. I had to hack together all the tech for it, so my new startup (nationbuilder.com) is about packaging it all up so others can do this model too.

There is some background in this Washington Post article from 2006. http://www.washingtonpost.com/wp-dyn/content/article/2006/08...