Springwise has a post on Sellaband, which is a cool service that has already raised over $2.5 million for over 2,800 artists. The big boost and news is that Public Enemy is using the service to fund their next album. Check it out here.
I don't think the music labels are threatened but definitely a movement to watch. More from Springwise:
"Amsterdam-based Sellaband is expanding its 'fan funded' model to include musicians who have already made a name for themselves. Artists can set their own budgets, asking for more than the former limit of USD 50,000. The first group to take advantage of the new opportunities is Public Enemy, which aims to amass USD 250,000 to record its 13th album. Fans of the iconic rap group can buy into the project—shares are USD 25 each—in return for a signed copy of the release and a share of its proceeds.
Public Enemy hopes to complete fundraising by the end of 2009."