Many companies looking to make a buck (or a few million bucks) on the Web in recent years have gone into the mobile content business—selling things like ringtones and wallpaper for cell phones. This is a potentially very lucrative market, and one that also has potential for musicians and other artists looking for a way to distribute their creations while making some money. However, setting up a functional online store that’s compelling enough for visitors to return again and again can be a challenge.

 

This week I received a phone call from a representative at Phone Sherpa, a Seattle-based company (founded in 2005) that describes itself as “the world's leading ringtone maker and ringtone store service.” The rep wanted me to know about a new Phone Sherpa’s new Mobile Store solution, which provides tools to market and promote music and art as ringtones or wallpaper for mobile phones.

 

Here’s how Phone Sherpa described the new solution in an April 3 press release: “The artist creates a store, uploads their content and embeds the Flash store component on their Web site. These easy steps take as little as fifteen minutes to complete. The Mobile Store can be customized to match the artist’s site layout and colors.”

 

Mobile Store is offered as a partner package. Artists have a choice of three packages, depending on how much the want to sell. The basic package, which is free, provides hosting for up to four files, with the artist earning 20 percent net sale payout on each item sold (content priced at four levels: $0.99, $1.99, $4.99, $9.99). The Plus package, $9.99 per month, hosts up to 25 files; artists earn 50 percent net sale payout on each item sold. Custom packages are also available.

 

Partners who sign up for Mobile Store accounts get monthly “payouts” based on how much content they sell; this money is deposited into a PayPal account. To calculate payout, Phone Sherpa considers a variety of factors, including cost to deliver goods (e.g. fees for credit card transactions) and refunds for purchases returned. The appropriate percentage, based on account type, is then used to calculate net payout.

 

In the Phone Sherpa Mobile Store FAQ, the company provides an example of how much a partner with an account giving 30 percent payout rate on net sales might make in a month, as follows: nine ringtones are sold at $1.99 each, with five credit cards sales and four PSMS sales; after fees are deducted, the partner nets $3.34. This amount is based on a 20 percent fee for each credit card transaction, and a 60 percent fee for processing/delivery of each item billed via cell phone using PSMS.

 

In its announcement about Mobile Store, Phone Sherpa cited stats from music industry trade group IFPI that mobile music now accounts for about 40 percent of record company digital revenues. Jupiter Research figures, Phone Sherpa said, indicate that ringtone sales alone generate nearly $4 billion each year, and that number is expected to reach $14 billion by 2011. Obviously, this is a huge industry, but not all artists have access to revenues from mobile sales, Phone Sherpa CEO Grady Leno pointed out in the press release.

 

“Artists not signed by a major label typically have no access to the mobile marketplace,” Leno said. “Phone Sherpa opens the mobile industry to everyone by providing artists with complete control over promotion, pricing, and distribution of their content into the mobile channel.”

 

David Meinert, manager of the rock band The President of the United State of America, emphasized the importance of the mobile content industry for today’s artists.

 

“Ringtones and wallpapers are a critical component of any music marketing plan,” Meinert said in a statement. “There is no more effective way to reach the highly influential 16 to 29-year-old demographic.”

 

The Phone Sherpa rep who contacted me sent some sample links showing how different artists have used the company’s solution to create their own online mobile content stores. These examples include:

The three examples above are mostly focused on ringtones, but of course Phone Sherpa Mobile Store also lets artists sell their visual works as cell phone wallpaper.

 

Mobile Store seems like a timely offering; if you are an artist using the service, let me know how it's working out for you.