This actually isn't original, its a copycat tactic (Jay-Z did it first)#. The "record" in record lable being short for "recording". Here, they are giving away the reproduction rights under the expectation that the owner will (trivially) reproduce and distribute the "records" for token economics. The new "middleman" will be happy to do this <on their own dime> and basically give the recordings away. This will make sense because the promotional value of the giveaways will exceed the trivial reproduction costs. That is a pretty effective demonstration. Lastly, lets say they get 5 million dollars. That would be the equivalent of doing a 5x (million) platinum record sales, but with still better economics (less rip offs) on the production costs. So in this model, 1 sale to an "art market" is better than 5 million sales through a record label for the artist. And the consumers get basically free product (as swag). That seems like a win/win. That was the model upon which this structure was originally premised.
[For the downvoters: Read the Forbes article from 6 days ago, below]
