Mixaloo: Share Mixtapes and Make Money While Doing It

Poughkeepsie, NY startup Mixaloo wants to make the experience of purchasing music online more social and rewarding, both emotionally and financially.

The company is taking a phenomenon – the mixtape – that has spanned several decades and media formats – 8 tracks, audio cassettes, CDs, and MP3 players – and bringing it to the web.

As a Mixaloo user, you can create playlists of music from all the major record labels, including Warner, Universal, EMI, and Sony. You can then share these playlists with friends via email, or you can embed playlist widgets into your website, blog, personalized homepage, or social networking profile. Mixaloo widgets are powered by Clearspring and can be added to your various online properties with a few clicks of the button (we’ve embedded one below).

To make a mix is free, but your friends will need to pay for the whole mix if they want to hear more than 30-second preview clips. The songs are 99 cents each (good) and protected by Windows Media DRM (very bad). The DRM protection is definitely this service’s biggest downside and could cripple Mixaloo’s potential until the major labels embrace DRM-free music. The company may throw advertisements into the mix at some point to make up for some of the lost revenue (I’ve got to stop it with these puns).

Mixaloo isn’t depending on user sociability to spread their widgets and entice customers to buy music from them. They’re harnessing the power of green by offering to split the profit from each sale 50-50 with mixtape creators. The company estimates that profits are 20-40 cents per track on average, so split that in half to get your per-track profit rate. We should be getting anywhere between $1.30 and $2.60 for each sale of the mix below (buy buy buy!). In addition to earning money that is paid out through PayPal each month, you will collect one point for every track sold. These points can be redeemed at a Mixaloo merchandise store that offers items such as t-shirts, speaker sets, and even cars.

While Mixaloo is currently in private beta, the company has provided us with 1,000 invitations to give our readers. To redeem yours, go here and enter “techcrunch” into the “TechCrunch Code” box.