Ringtones is a generous cash provider for the music industry

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.


Meanwhile, the creeping competition in the download market has seen download services such as OD2 and Wippit discount the price of downloads.

More in Reuters.