KEY POINTS:
A New Zealand digital music retailer has done a deal with a large group of American independent record labels to promote their 2008 Grammy award nominees.
Txttunes - set up a year ago by four New Zealanders including Brad Carter, guitarist and singer with local rock band Steriogram - has partnered with the American Association of Independent Music (A2IM) to create the initiative.
Member labels, representing names such as Paul McCartney, Joni Mitchell and Nickleback, can upload songs, album artwork and liner notes to www.txttunes.com/a2im, where fans and Grammy voters can access them.
The site will stay live until the 50th Annual Grammy Awards on February 10.
A2IM president Richard Bengloff said the association represented 180 record labels. While independent labels put out 80 per cent of the music in the US, they accounted for only 30 per cent of sales due to barriers to entry. Consequently, it was important to find new ways to market them.
Partnering with companies that had already developed the technology was the most cost-effective way.
"They [Txttunes] have spent the money and the start-up costs, now they take a distribution fee to work with us to be able to get our music out."
The deal also gives Txttunes access to many of A2IM members' catalogues. Overseas artists it has available include Paul McCartney, Green Day and Motorhead, as well as local acts including Steriogram, Head Like A Hole and Midnight Youth.
Like Vodafone and Telecom, Txttunes allows customers to pay for digital music downloads via their mobile phone accounts.
Founder and chief executive Matt Coleman said it was important to offer this payment method because many young people did not hold credit cards. "Even uni students, if they have a credit card, it's usually full."
Coleman - who also founded Txtstation, a company providing live onscreen text-messaging promotion services to television networks in 100 countries - said Txttunes had hit on a business model that differed from other digital music retailers.
He said the company had developed a "widget" which allowed artists to upload a music player on to their websites or social networking pages. It let fans buy the musician's work directly from that site and pay by mobile phone.
The first artist to use the service had been US hip hop star B Real.
"We're enabling any artist of any size ... to actually use our technology and push that out to their fans directly."
Vodafone head of music Morgan Donoghue said he believed the widget was a New Zealand first.
It was predicted that by 2011 digital and physical music sales would be equal, but the download market was tough as set-up costs were huge.
Shaun Davis, founder of another New Zealand online retailer, digiRAMA, agreed. "You don't make any money from the music sales directly - we make a little bit, but you've got to find a business model that works in other ways."
