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Don't let the casual humility fool you, though. Khosla understands how the music business works, and he firmly believes that there is room for innovation, especially in the contracts signed by artists.  Traditionally, when an artists signs with a label, all the revenue earned from sales, booking, and merchandise goes directly toward paying back the label's investment in the artist. While the label makes a profit, most artists never pay back that "recoupable account", and even if they do, the label still owns the master recordings of their music.

Khosla uses the analogy of a homeowner to explain the deal. "You get a mortgage, work hard to pay it off with the hope that one day you'll own your own home. With that record deal, you get a loan, pay it back, but then you do not own the asset—the masters." While he recognizes that deals with major labels are still appropriate for some artists who rely on their significant resources, he offers an alterative. "At 7Spin music, either there is no recoupable account or we put nearly 100% of revenue towards recoupable." In other words, the label makes no money until the artist does. 7Spin contracts do not have to be all-inclusive, either. If an artist only needs help with booking concerts, they can sign an appropriate deal that fits those needs.

Such differently structured deals are not meant to alienate other business models. In fact, Khosla and his team will be the first ones to point a new artist toward a different label if they think it's a better fit. 7Spin has its own distribution deal with Provident-Integrity, part of Sony/BMG, one of the "big four" labels along with Warner, EMI, and Universal. Of the major labels, Khosla quips, "They either want to compete with you or own you. Let's work together—we're all in this economy together. I want to be a farm team for Sony or EMI when I need help. They know things about marketing risks that I don't."

Ian Eskelin of 7Spin band All Star United has interacted with many labels, big and small, during his career. When the time came for a new All Star United CD, Eskelin was careful in his label choice. "The last thing we wanted to do was go sign a 360 deal with someone. I was looking for a sort of 'indie-plus' label, with less red tape and more fun. 7Spin allowed me a level of freedom I haven't had anywhere else."

The label connection is also helping All Star with a new kind of "product placement"—the appearance of songs on movies and TV. Songs from Love and Radiation have appeared recently on NCAA Baskteball programming, movie trailers, and ads for the CBS Fall TV lineup. Khosla describes the process: "It is an area that we are actively pursuing. We have met personally with Music Supervisors, sent them music, and I've tried to cultivate relationships." Eskelin notes the advantage such placement provides. "At the end of the day, people still want songs, and guys like Peter Khosla are looking for creative ways to get them out."

Innovative economics are met with innovative promotion and marketing at 7Spin. A "Prize Inside" program has rewarded CD purchasers with the chance for something more, much like the prize inside a box of Cracker Jack, but on a grander scale. Tucked inside CDs have been autographs, guitar picks, free merchandise, and even "Golden Tickets" awarding a listener with a personalized backyard concert. Sevenglory traveled to Gary, Indiana for a backyard concert that turned into a memorable worship time for several families. Still, Khosla notes, "It's a good prize, but logistics can be tough."

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