In a climate where album sales are scraping the bottom of the revenue mix, Mike Frankel had a novel idea: Why not put merchandise first? Last December, the 27-year-old Columbia business school grad and longtime music blogger put his money where his mouth was with a new company called Merchbox. A subscription delivery service in the vein of hit cosmetics startup Birchbox, Merchbox is based on the daringly simple premise that even digital music lovers will still flip for physical goods--provided that they're fun and well-curated.

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