NEW YORK (FORTUNE Small Business Magazine) - In April, Grammy-winning jazz composer Maria Schneider will play four nights at the Manchester Craftsmen's Guild in Pittsburgh to record a live album. Schneider is beloved by jazz aficionados, but the shows will be significant for another reason -- the resulting album will be the second that Schneider has produced and financed through ArtistShare, a new venture in New York City.

ArtistShare enlists fans to fund an album in exchange for an insider's look at the creative process. "The business model focuses on creating new music, rather than the sale of music already made," says ArtistShare founder and classical guitarist Brian Camelio, 40.

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Fans who support ArtistShare musicians receive perks such as early samples of songs, signed CDs, online composition lessons, and even free concert tickets. Musicians get something too. ArtistShare helps them build their websites and develop their fan base online. When an artist wants to record an album and needs money to rent studio time or hire backup musicians, the ArtistShare team develops a menu of options for fans to support the project. For instance, $20 or $30 might get you an advance version of a new recording, $400 could include an autographed copy of the score, and for $3,000, an artist will compose a song for you. Jazz singer Allan Harris recently posted a solicitation for $15,000 in exchange for "executive producer" status on his next album. ArtistShare gets a percentage of the money raised through the offering and a lifelong commission on sales of the final recording.

Schneider was the first to use the ArtistShare platform, after years of frustration with traditional labels. Her gamble paid off last year when she won a Grammy for her 2004 album Concert in the Garden. It cost nearly $90,000 to produce, which Schneider raised entirely through ArtistShare, and it was the first Grammy-winning work to be distributed exclusively on the Internet. (Better news for Schneider -- the album turned a profit, while some of her earlier recordings, although they sold in higher volume, did not.)

As Camelio is fond of saying, "You can't download the creative process."

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