The company is buying independent music label 1500 Records, looking for a new means of distributing its musicians' work, as well as for a new enticement for artists to visit the site.
The two companies will work together to promote Riffage artists. Riffage paints the acquisition, along with its new ownership of San Francisco's Great American Music Hall, as a way to help push the musicians through each step of their careers.
"Artists should be thrilled about it," said Page Murray, Riffage's vice president of marketing. "You can only grow so large in the online space alone."
Riffage is one of several online music sites that focuses on distributing the music of largely unsigned artists. It competes with a few larger players, such as MP3.com, which is slowly gaining ground as it signs distribution deals with the major recording labels.
Few of the sites have shown a way to make a stable profit from the distribution of unknown artists, however. Riffage says it's hoping to ameliorate this problem by gaining more consistent revenue from the record label and from ticket sales at its concert hall.
The company's new acquisition has a few bands already signed to the label, left over from a several-year joint venture with A&M Records, and later Interscope.
In the future, bands that reach a high level of downloads or streaming requests on Riffage's site will automatically reach the attention 1500 Records' talent scouts, with a chance of being signed to the label, the companies said.
"This gives us the freedom to be able to do something new and different," said Gary Richards, 1500 Records' president. "Being partnered with the majors has a lot of drawbacks in terms of freedom."