Peter Gabriel's filter

(Fortune) -- There's a reason Peter Gabriel is a household name. One of the founders of the super-group Genesis, the British rock star went on to have great success as a solo artist known for his outlandish costumes, his cutting edge music videos, and of course, his '80s hits like "Sledgehammer" and "Shock The Monkey," which were both artistic and commercial milestones.

What's less known is that the 58-year-old Gabriel has done rather well since then as a digital media entrepreneur. In 2000, he co-founded OD2, which quickly became the leading European digital music provider with clients like Nokia and MSN. OD2's owners reportedly later sold the company for an estimated $20 million.

Okay, so Sammy Hagar reportedly sold a majority stake in his tequila business for four times that amount last year. But now Gabriel has a new business that's potentially much bigger. On Tuesday, he and a new group of partners launch the private-beta version of a web-based service called The Filter that will sort through the vast inventory of content on the Internet and recommend songs, movies, television show and web videos to its users. In May, The Filter website will be open to the public.

Ultimately, Gabriel and his partners in his Bath, England-based company have a grander vision for the Filter than telling you that if you like Sammy Hager, you might also like Van Halen's earlier stuff with David Lee Roth. They hope you'll one day be able to log in and find the perfect place to dine on your upcoming trip to, say, Barcelona -- and a suggestion for the right clothes to wear on your night out. Now that sounds like something an art rocker like Peter Gabriel would go for --- as opposed to a night of tequila swilling at Hagar's nightclub in Mexico.

Gabriel put up $8.5 million along with England's Eden Ventures to start The Filter because he fears that people are being overwhelmed by the web. "Everyone got really excited about the concept of infinite choice through the Internet," he says. "The reality is a little like getting a sore thumb with your remote on your television. Too much choice is not always a good thing."

He describes the solution to this machine-age dilemma in the sort of terms you might expect from a thinking man's rock star. "My friend [recording studio guru to Talking Heads, U2 and Coldplay] Brian Eno has been going on for some time about the increasingly important role of the curator over the creator," Gabriel explains. "In many ways, the disc jockey has become as important as the musician, which is one of the best illustrations of that. I would like a life jockey as well as a disc jockey."

The Filter's founders say their service could play that role nicely, claiming its recommendation engine is more sophisticated than anything else on the market. Unlike competing services, the Filter doesn't rely on the ratings that people assign to songs or movies online. It determines its users tastes by observing what they actually do with these items on the Internet.

The engine is particularly interested if someone buys a song, streams it or clicks on a related link. "We like to get real evidence of people's tastes," says Martin Hopkins, co-founder of The Filter and creator of its recommendation technology.

Hopkins also notes that The Filter's engine doesn't push people choices based on what they bought years ago. It slowly forgets what it learned because peoples' tastes change. Don't you wish Amazon's (AMZN, Fortune 500) service did the same?

Gabriel and his partners hope to generate revenue at The Filter by selling advertising. They also hope to license their technology to other digital media companies. The company already provides recommendations to the users of its former OD2 customers like MSN (MSFT, Fortune 500) and Nokia (NOK). That's why the service launches with a database of over 50 million transactions from which to make suggestions.

It's a long leap from recommending music to choosing their restaurants in foreign cities. Still, the idea is intriguing. Gabriel isn't just taking about this either. He's putting up a lot of money to make it happen. "This is definitely something that's worth watching," says Gartner analyst Mike McGuire who, like Fortune, was briefed by The Filter before the private beta launch.

As you might expect, Gabriel is in the studio working on new music, too. He owes one more album to EMI. After that, he plans to release his music on his own a la Radiohead. The graying rocker is thrilled that the Internet is giving artists a new means of distributing their music -- especially the ones who couldn't get a record deal even in the industry's better days. "I like it that the inmates are running the asylum,' says Gabriel.

This, of course means more choices for those overwhelmed consumers that Gabriel is so concerned about. All the more reason for his new company, right? No wonder he's so pleased.