Kiwi start-up is using new technology to help rock acts connect with their fans
Successful bands in the 21st century will not make their millions through album sales as they once did - the money these days is in live gigs and merchandising.
And the success of these two areas relies on communicating with fans and sustaining long-term relationships with them.
MusicHype.com is a Wellington start-up that rewards music fans through a managed promotional platform for artists and labels.
Like a digital label for independent artist fans, it rewards them for promoting, talking about and spending money on the bands they love. The MusicHype platform tracks fans' activity across social media like Facebook, Twitter, YouTube and LastFM.
Only a year old, MusicHype was founded by experienced Canadian website developers Jeff Mitchell, formerly of ZeroOne, and Annabel Youens, who began her career at Abebooks.com and is now MusicHype's chief marketing officer.
Neither had connections in music, but were approached by Dave Moskovitz, from tech incubator WebFund, to see if they could plug a gap in the music industry.
MusicHype is powered by the social commerce Appreciation Engine, a proprietary underlying technology, designed by Mitchell.
Fans can create an account and with the engine, MusicHype can track all their internet music activity.
"Everything that we do is opt in - it's your choice of what you want us to track," said Youens. "We don't share that information, you can delete anything you want."
Music fans were tired of being called music pirates, and MusicHype gave them more positive feedback for their online activity.
The Mint Chicks were MusicHype's first client. It has also helped Crowded House with its Intriguer tour in America and is working with some of the large record companies, including EMI Music.
The company is completing a deal with its next client, Ben King, formerly of Goldenhorse, who has a new band, Grand Rapids.
"The Faintheartedness album is amazing and he is such a nice person - he's exactly the kind of artist that we want to represent," Youens said.
Whenever MusicHype was developing a promotion strategy, it was important that the fans could see that the promotion had been developed by the artist.
King's promotion will involve chocolate and whiskey, two loves of his.
"Fans want tangible goods that have got some thought behind them," said Youens.
MusicHype receives a service fee from artists for the campaign, or takes a revenue share from the campaign. Merchandising is another revenue source.
After a whirlwind first year, MusicHype's second year is looking to be even busier. The Rutherford Innovation Fund has invested $600,000 in the company after an approach following last year's Open Source Awards, where it was runner-up in the business category.
"MusicHype provides a platform for bands to leverage rapidly changing technologies and new business models by directly engaging with fans," said Kenji Steven, director of NZ Capital Strategies, general partner of the Rutherford Innovation Fund, announcing the investment last month.
The Rutherford fund cash is enabling MusicHype to expand internationally.
Chairman Dave Moskovitz and Mitchell are recruiting in the United States for a CEO in Los Angeles.
"For us to move quickly in that market, we need someone with the connections and a music and technology background," Youens said.
Mitchell and Youens will be moving to the new Los Angeles office, leaving behind their Wellington office where they have hired more people.
As well as building up connections with American bands, they will also be introducing Americans to New Zealand music.