Music startups are fun, cool and sexy. They’re also overhyped, hard to fund and very, very hard to monetize. I thought this when I went into the room at Music TechPitch 4.5, and I still thought it when I left.

It would be lovely if we lived in a world where people didn’t steal stuff. Sure, every retailer suffers from the effects of criminal scum – euphemistically called ‘shrinkage’. But imagine if you couldn’t open a clothes shop, because it would be looted instantly. That’s the ridiculous situation we face in the music industry today, and movies and games aren’t faring too well, either. Yes, there’s legal free music out there, but it’s usually only free to compete with the stolen stuff.

I saw a bunch of really cool startups tonight, but fundamentally they’re all hampered by pirate scoundrels – and apart from the occasional beheading, I don’t rate music pirates any more highly than their Somalian seafaring namesakes. Only one of the businesses had a really solid revenue model, and even that was somewhat nichey, with an uncertain ultimate market. Sadly, the result of this parlous situation is that many of these creative, clever businesses may ultimately go to the wall. This will happen because people who won’t nick a sandwich from TESCO somehow think that routinely ripping off music is different. It’s like the music industry has suffered some kind of catastrophic war, with a whole lost generation of music commerce – both businesses and artists.

So it’s with a degree of sadness that I bring you tonight’s crop of fresh-faced recruits, ready to go over the top into battle, surely to be cut down by the pirate machine guns.

Amio – @sea_labs have an innovative augmented reality application, which lets you map sounds onto objects in view. When the objects move, the sounds play. This allows you to map a drum kit onto your desk, and play Phil Collins solos on mugs around your desk. It was a fun toy, but I think that the firm are missing a trick with this simple novelty app. There are many applications for this technology, such as stock monitoring, which are potentially far more monetizable than the demo application. I hope they move away from the frivolity soon, and become a serious business. As the Judges’ winners and the audience runner up, their technology clearly demonstrated the power to impress – even if the commercials were less convincing than the slick demo.

Bandwagon ( @Bandwagongigs ) had a sensible model, in a similar market to that of their rival SonicBids. This allows bands to pitch for gigs, and allow promoters to manage and filter the applications they receive to play at events. With a subscription model, and plenty of room for enhanced features, this firm is already profitable. The audience sensibly awarded them the gold gong, whilst the judges plumped for joint silver.

The judge’s other joint second prize was awarded to MPme, ( @MPmeradio ). This is a clever idea which is perhaps best described as a mix of last.fm and online radio. The software uses your music preferences to search through the plethora of online radio stations, giving a list of personal recommendations to suit your listening preferences. One problem with this type of music discovery is that it might leave you stuck in a creative rut – with your dodgy historic taste in music dictating your dodgy future listening. How well this system defeats that risk in practice remains to be seen. You might struggle to break out from your music collection of Mr. Blobby and Steps! This is a business which I’m personally undecided about. It could become wildly popular, and consequently very valuable, but without a clear route to early revenues it’s hard to see a reason to bet the farm. It could be the new last.fm, but let’s face it – winning in this market is very tough, and only the flyaway successes tend to make any serious wedge.

Another interesting technology was Myfii ( @Myfiimouth ). They tackle the unusual issue of adding content to tracks, which could perhaps be described as ’emotional metatags’: the photos, feelings, etc., which makes music matter to you. I get the effect they’re aiming for, but personally, I find the music does it for me perfectly. I don’t need to see the photos to get the flashbacks – but I understand that other people might do. It’s clever, and likely fills a need for many people – but I can’t easily see how it can make a lot of money. Maybe that’s a poverty of vision on my part, but I can imagine it becoming popular

Finally on my list of favourites was Richseam ( @Richseam ). This could perhaps be described as the six degrees of Kevin Bacon, applied to music. Like Dido? With Richseam, you can look up what she’s guested on, who produced her, etc., etc., etc. This give a slightly geeky new way of discovering music, plus a really useful music factfile which fans will love to explore. Whilst there are some routes to monetizing this, such as downloads, gig tickets, etc., my gut feel is that a single-brand sponsorship would really lift the concept in both financial terms and inthe public consciousness. It would perhaps be seen as a sell-out, but a long-term branding deal could give this firm the financial stability to be something really sustainable and useful to music fans all over the world.

Also pitching were SuperStarVJ ( @superstar_VJ ), whose product lacked a demo to explain the concept, and Lemez and Friedel ( @lemez1 ) whose music-based language-learning app seemed to attract little audience support. Song Avatar ( @sonigegg ) also presented their personal jingle technology, which again lacked an engaging demo.

The venue was appropriate to the music industry, with the fashionable Gibson guitar firm (recently exposed for using illegally-logged rainforest wood in their products) providing the venue. It was full of thin, fashionable people, who were distinctly better presented than the clientele at the vanilla TechPitch event in the city. The venue was, however, rather cramped, which made networking a bit difficult. Asking people to pack up their chair at the end would have helped. Free beer and pizza was provided, as is traditional for tech industry people, who seemingly can’t feed themselves.

If you’re into music, this is a great place to catch up with all the latest startup action. But sadly, this is a market which is perhaps tougher than many, and it won’t appeal to everyone – despite the fact that it’s clearly brimming with energy, creativity and talent.