While, downloading music from Internet is getting cheaper, the price of mobile ringtones has not moved, and in some cases it has even soared.
According to London-based Informa Media Group, record companies are to be blamed for this discrepancy. The latest stereophonic tones (called “sample” ringtones) issued from music studios cost four times more than a standard Internet download price.
Mobile operators and other ringtone resellers have to pay record labels a royalty rate equivalent to between 25 percent and 55 percent of the total retail price for a “sample” ringtone.
And this certainly put the resellers in a difficult position.
Ringtones have become a surprisingly generous cash provider for the music industry and the business is predicted to grow to over $5.0 billion in 2007 (compared to $3.0 billion in 2003).
The “sample” tone’s predecessors – monophonic and polyphonic tones – are rough renditions of a sound recording. Royalty (some 10 %) arrives in the pockets of artists and music publishers, not music labels. “Sample” ringtones is the perfect opportunity to make profit from mobile.
More in Reuters.