The explosion of digital music distribution is changing the way the music industry discovers new acts, as talent scouts become talent surfers that use the Web to uncover hidden stars.

New South Welsh act Goldie Looking Chain were signed after selling 2,500 self-made MP3s through their Web site. And brand-new New Zealand act Steriogram were found and signed after freelance talent scout Joe Berman used his browser to search for "New Zealand indie rock bands", according to the Santa Fe New Mexican.

Berman emailed the band, who replied with a CD of self-made songs. Within two weeks they were signed to Capitol Records, were touring the US and had their video on MTV.

The band used a PowerBook G4 and Apple's Logic Pro software to make their music. When Apple CEO Steve Jobs heard this, he allegedly promised to help the act, with a feature about them appearing on Apple's Web site within weeks.

Faced with declining sales and lowering budgets, the story could become the norm for talent scouts in the music industry, the report maintains: "For many years bands were discovered in clubs and signed by record labels, with eye-popping advances and massive promotion budgets", it observes.

Berman is at the cutting-edge of the new approach, saying: "It's actually what the (talent scouts) who make six figures should have been doing all along,"

The promise of the Internet and digital/satellite radio channels offers bands and labels new ways to boost their audience, too, the report maintains: "New technologies let labels and artists end-run traditional promotion channels, such as commercial radio" it states.