It’s been almost two years since we last caught up with Earbits, which we called a new breed of artist-focused Internet radio. And today it’s announcing a new social currency that lets indie music fans get access to new on-demand features.

Earbits is an ad-free music-streaming service. What…no commercials? Yup, it’s funded via labels, bands and promoters who use the platform to buy airtime in targeted channels, and it currently counts 480 labels, 8,000 artists and more than 300 channels across the platform.

An in-house team hand-pick independent artists (there’s no Madonna on there) from around the world and, besides music, they also serve up photos, live show information, merchandise and more.

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Groovy, baby: Fans become marketers

Now, Earbits is launching what it’s calling “the first social currency for streaming music,” going by the name of ‘Groovies’.

The new system is built around asking fans to carry out actions that benefit artists and labels, in exchange for credits that allow them to unlock additional on-demand features, such as playing tracks and albums (rather than letting channels simply stream), saving favorite songs and browsing discographies.

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So, it seems that the existing product will remain as is, but Earbits wants to encourage engagement and virality by asking fans to essentially market the music on their behalf.

Each song streamed on-demand will cost 10 Groovies, but a user can earn 500 Groovies by opening an account, 100 for sharing music recommendations on Facebook and Twitter, and 50 Groovies for joining artists’ official Facebook fan pages or e-mailing lists. To save you doing the maths, that unlocks five on-demand songs.

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It seems that this is just the beginning too – soon-to-launch updates will see rewards gained for checking-in to live shows via mobile devices, and even buying merchandise.

Then there’s ‘karma’ – as Groovies stack up over time, users’ loyalty can be tracked by artists, labels and Earbits, which may lead to additional rewards for the top supporters. This may include early access to new releases or a Google Hangout with the band.

“The potential for Groovies is incredible,” says Joey Flores, CEO of Earbits. “Over 70% of streaming-music listeners are non-paying, most of whom also recognize the need to support artists and labels. Groovies create a social economy that maximizes the potential of this demographic by putting a real value on the actions they take to support their favorite bands. Groovies empower fans to earn rewards, recognition and unlock access to our growing music catalog.”

Certainly, Earbits has done well not to compromise its existing product, choosing instead to create added value for the more serious music fans – this leaves it entirely up to its users to decide how involved they wish to get. In comparison, Spotify shifted the goalposts ever so slightly when it sensed people were addicted to the (free) ad-supported version, opting to diminish the service to try and shoehorn users onto one of the paid tiers.

While Earbits has previously had an iOS app, this now no longer seems to be live, though we’re told that it will be launching a new iOS app later this year. Its first full-scale Android app should be landing this year too.

Earbits is funded by Y Combinator, Charles River Ventures, former Lala CEO Geoff Ralston and WordPress founder Matt Mullenweg.

Earbits