Ludacris' digital music play

NEW YORK (Fortune) -- Famous rappers often gripe about how would-be Snoop Doggs always try to give them demo-tapes. Ah, the bitter wages of hip-hop stardom.

But one rap luminary thinks there is a business in collecting music from unsigned acts and posting it on the Internet. Ludacris, the Grammy-Award-winning rapper known for his hits like "Chicken and Beer," is one of the founders of WeMix, a Web site where unknown 50 Cents can find a wider audience - that is, if they pass muster with the rest of the Web site's users. "It's almost like a virtual American Idol," says Ludacris, whose real name is Chris Bridges.

Ludacris and his partner, Matt Apfel, a former reality television show producer, have latched onto an increasing popular concept on the Internet called "crowd sourcing." The rapper singles out acts that he thinks are good. Then, Ludacris lets the users of WeMix's pick the songs that rise to the top of the site's home page. This week's favorite is Wally J.'s ribald "Booty On My YouTube," which has been played 614,938 times. That's a lot of mouse clicks for a Web site that only went live in June.

WeMix isn't the only music site using crowd sourcing. Another is OurStage, a Boston-based service that launched last September and now hosts 43,000 acts and 170,000 tastemaker participants. This week, OurStage announced that Live Nation, the nation's largest concert promoter, has agreed to use some of its best unknowns to open 300 of its events.

It remains to be seen if WeMix and OurStage will achieve the scale and power of Apple's iTunes or MySpace Music. But music industry veterans say they are worth watching. Ted Cohen, founder of PartnerTAG Strategic, a digital music consultancy, says consumers feel overwhelmed by all the music available on the Internet. "These companies give people some kind of guidepost," he says. "People can look at these sites and say, 'Well, the top ten songs must be pretty good if the users picked them.'"

Of course, as Ludacris points out, there's a precedent for crowd sourcing in the traditional music world: American Idol. The show's viewers haven't always been right. Taylor Hicks, winner of American Idol season six, is currently trying to resurrect his career by appearing in a Broadway production of Grease. But the show spawned stars like Kelly Clarkson and Chris Daughtry. It was only a matter of time before someone tried to do something similar online.

WeMix grew out of an idea that Apfel, the former vice president for development at True Entertainment, reality television giant Endemol's New York production company, had for a show called "Pimp My Song" in which professional artists would help rank amateurs - think William Hung - write tunes. Apfel scraped the concept after seeing Ludacris play the role of a rapper in the 2005 movie "Hustle & Flow." "I was in a theater filled with New York City teens," he recalls. "They were up in the aisles cheering in the scenes where music was being made."

Apfel called the rapper-actor and talked him into starting WeMix, which the two of them agreed had the potential to be bigger than a single television show. They raised $500,000 in seed capital from angel investors. And with Ludacris enthusiastically hosting the site, WeMix had no trouble attracting unsigned artists. WeMix enables users to leave cell phone messages for each other on the site through a technology called VoodooVox. The rap star often calls with the site with shout out for his favorite contributors. like this one for like "Booty On My YouTube" composer Wally J.: "I must say that's one of the best videos I've seen in my life. Keep making those things, dawg!"

Apfel and Ludacris are trying to lure more stars to WeMix. The site hopes to announce a deal in the coming days with a well-known rocker that Ludacris thinks could attract more of those kinds of acts to the site. They are also shopping songs by some of WeMix's most promising discoveries to sports figures that Apfel and Ludacris hope will use these tunes as their walk-on themes at games. And, of course, WeMix is trying to attract advertisers.

That may be tough. Rishad Tobaccowala, chief innovation officer of the media buying division of Publicis, the French advertising giant, says advertisers are reluctant to associate themselves with unsigned acts. After all, he notes, "there's a reason there's this word called talent." In other words, he says, not every unknown act has it. Maybe that's why they don't have a record contract. Obviously, Apfel and his rapper partner feel differently.

No matter what happens with WeMix, Ludacris won't have to worry about would-be Snoop Doggs pressing their demo tapes on him at shows. They can just post them on his Web site. That must be worth something. Even to a guy as wealthy as Ludacris.