Los-Angeles based Mobile Roadie has developed a product for musicians to connect with their fan base over the iPhone. Simply put, this is a very good idea, and the product looks terrific.

For under $400, musicians can have their very own customized iPhone app that can be downloaded from iTunes. Once a fan installs the app, they can view photos, stream music & YouTube videos, get tour dates, and even interact with other fans. And since the application integrates all the disparate communication channels that artists manage on a daily basis, it makes it a lot easier for fans to stay up to date without needing to go to multiple websites.

There’s also a monthly-service charge that begins at $29, but the Mobile Roadie FAQs suggest that artists need not worry about the ongoing costs. The app will help them make up for these in ticket & music sales. Artists can also recoup costs by opting to charge fans for downloading the app on Apple’s iTunes store (a quick scan of the current Mobile Roadie users on iTunes shows that 2 out of the 12 12 out of 74 are charging). Mobile Roadie’s infrastructure can handle up to 1 million downloads.

Update: Mobile Roadie is offering 20% off the setup fee for the first 3 TrendSlate readers who sign up. Use coupon code TRENDSLATE

There’s a lot of opportunity ahead for Mobile Roadie, as well as a few challenges.

The target market is great, since Apple’s iPhone user base (which continues to grow) has lots of synergies with music enthusiasts. The company also has good connections within the Southern-California investor & entrepreneur community. It is led by Michael Schneider, who is affiliated with the newly-formed Launchpad LA “incubator”, a seed-stage VC firm. Mobile Roadie’s pricing is great, considering that it would cost $5-10k to develop even a simple app that may not look right and would still need to be supported. Other similar services like Kyte are also quite pricey. Mobile Roadie’s app has terrific usability and ongoing support at a good price.

As for hurdles they’ll need to overcome, one is the approval maze of iTunes’ App store. Although there are signs of improvement, the speed at which applications are approved could create bottle necks in Mobile Roadie’s process. Another challenge is selling the service to bands that are already very active online. While the app makes it much easier for die-hard fans to get lots of information in one place, for artists it is yet another channel they’ll need to manage while only reaching a subset of their fan base (and this one has recurring costs).

It’ll also be interesting to see how the company handles ongoing revenue. If Mobile Roadie successfully brought 1,000 artists on board (quite a climb from here), it only yields $750k in first year revenues (setup + monthly fees) and $350k in recurring revenues in the second year. Assuming a 20% profit margin that’s only $150k in upfront profits and $70k recurring (and this is before we take attrition into account). One way they could respond to this is by expanding outside the music industry (e.g. celebrities) — something they may already be considering since the pricing tab on their website has a “non-musicians” section and they’re bringing in new creative talent to build apps (update: confirmed, see comments below). Another approach is to find ways to collect affiliate commissions for ticket & music sales.

Despite some of the challenges ahead, Mobile Roadie has a great product, an experienced and connected management team, and the right market. This is definitely one SoCal startup to watch.