Textango’s Innovative Music Billing

textango.jpgIn the information age, small startup companies are able to compete in the marketplace through innovative thinking. Giants like Apple and Google started as great ideas that were backed by little capital, but grew into huge successes. A young company, Textango, may have found a market with huge possibilities.

Textango is a mobile billing and music delivery platform that lets customers purchase music by sending a premium text message on their mobile phone. The music download is charged to the customer’s mobile phone bill, making credit cards unnecessary.

In the Untied States, many young people have a mobile phone. (One source claims 80% of 12-18 year olds in the U.S. have mobile phones.) But they don’t have credit cards which allow them to download music legally. Textango allows those of us without plastic to enjoy our music, while compensating the artists for their work.

Musicians are paid 50% of the retail for each purchase. Textango keeps 4% and the rest goes to the mobile phone provider. Most credit cards charge a fee of around 4% for each transaction, so Textango is charging a reasonable fee.

Because Textango is trying to break into the market, its number of artists is limited. I counted around 630 albums. This limits the consumer base. But Textango allows artist to signup for the service, so new musicians can make their songs available to the public without having to go through a record label.

Some parents may see Textango as a bad thing. They have control (or should) over a child’s credit card use, but paying for music through the phone bill is one way a child can get something the parents don’t want to pay for. Oh well, with every innovation there are bound to be new problems.