To spell that argument out: Just because people aren’t paying $10 to $17 for a CD anymore doesn’t mean that people aren’t interested in music, and in some cases willing to pay for it.

Even if that’s true, it won’t do very much for the people who run big music companies like Vivendi’s (VIV) Universal Music and Warner Music Group (WMG), who are still stuck selling CDs and will be for years to come.

But nimble competitors think they can carve out a niche for themselves by working outside the labels and selling small batches of music-related stuff, if not CDs. That’s the premise of Topspin Media, a start-up headed by Ian Rogers, an entrepreneur who briefly ran the music unit of Yahoo (YHOO). Topspin sells a suite of tech tools designed to help artists (and/or their business people) who want to sell their product and manage their careers on their own.

The company is just creeping out of stealth mode, so it’s too early to tell whether Topspin’s prospects are any more or less promising than the future of the music business. But Rogers is a persuasive guy, so it’s best to just step aside and let him make his own pitch.

Here’s a slide from a recent presentation Rogers gave at a music industry event in Seattle that sums up his “people like music” argument. (Click on the image to make it bigger.) His larger case, which, of course, includes a role for Topspin, can be found here. Or if you just like slides, here.

A second source says they’ve been told the staff will shrink down to three people and that a “plan would be worked out in the next couple of days.”

Also unclear: Which one of Condé’s digital units will end up adopting the Web site. Portfolio.com had been run as a standalone property. That made it a rarity at Condé, where most of magazines’ digital arms are run by its Magnet unit, and the rest are run by Sarah Chubb’s CondéNet group.

Confused? So are most Condé Nast staffers, who spend lots of time complaining about the publisher’s byzantine digital architecture. But you won’t hear them complaining too loudly right now–they’re trying to hang on to their jobs, or at least protect their exit packages.

Web site staffers were told about the cuts in a meeting led by General Manager Ari Brandt and publisher David Carey, who didn’t provide much detail, according to people who attended the meeting.

Portfolio.com staffers have been told they have been meeting their revenue goals for 2008 while the magazine has not. According to a person who attended the meeting, one of the staff’s braver souls asked Carey why the Web site was being punished more severely than the magazine.

“He gave a sort of corporate-speak answer, and what it appeared to boil down to is, is ‘This is a magazine company,’” says a person who attended the meeting. ”And it left the impression that the Web site was sacrificed to save the magazine.”

In a separate meeting, Portfolio magazine editor Joanne Lipman told her staff that the publication would cut some positions and publish 10 times a year instead of monthly.

UPDATE: A partial list of departing Portfolio staffers.