Music Price Wars – But What About Ringtones?

Just why are ringtones so expensive? Don’t get me wrong here: I hate them, but there is a huge discrepancy between the cost of downloading a music track and downloading a new ringtone for that phone that’s you’ll probably only own for a month. Often the ringtone will cost more than the entire original song it is based upon.

Consultancy firm Informa have published a report on the state of the ringtone market, and it looks like it’s all the music companies’ fault.

A ringtone based on a sample from a track can set you back up to four times the cost of downloading the whole song from iTunes – the cost is inflated because record labels require royalties of between 25 and 55% of the cost of the ringtone.

For example a track off iTunes will cost you about €1.50 (US$1.82 – nearly twice as much as the US store. I’m sure that’s justified) when the site appears suddenly next month, yet downloading a ringtone can cost a staggering €6 (US$7.30). And thank you T-Mobile UK, for that confident pricing. How much pocket money do kids get paid these days anyway?

“The reseller is really between a rock and a hard place,” said Simon Dyson, a co-author of the report. “They are torn between raising the price or keeping it steady in the hopes of establishing a market. Demanding such high percentage rates by the record companies could certainly lead to the market being depressed.”

Depressed? That’s nothing compared to what will happen when phones are released that can just play an MP3 file as the ringtone – then commuter-bothering phone owners won’t have to buy anything at all. Then the US$3 billion (€3.6 billion) market will vanish over night – instead of growing to the US$5 billion (€8.5 billion) monster it’s expected to be by 2007.

Incidentally, I know some pandas who have a really good ringtone album out.

Informa Media Group

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Fraser Lovatt

Fraser Lovatt has spent the last fifteen years working in publishing, TV and the Internet in various capacities, and believes that they will be seperate platforms for at least a while yet. His main interests at the moment are exploring where Linux is taking home entertainment and how technology is conferring technical skills on more and more people. Fraser Lovatt was born in the same year that 2001: A Space Odyssey was delighting and confusing people in the cinemas, and developed a lifelong love of technology as soon as he realised that things could be taken apart, sometimes put back together again, but mostly left in bits or made into something the original designer hadn't quite planned upon. At school he was definitely in the ZX Spectrum/Magpie/BMX camp, rather than the BBC Micro/Blue Peter/well-behaved group. This is all deeply ironic as he later went on to spend nine years working at the BBC. After a few years of working as a bookseller in Scotland, ("Back when it was actually a skilled profession" he'll tell anyone still listening), he moved to England for reasons he can't quite explain adequately to himself. After a couple of publishing jobs punctuated by sporadic bursts of travelling and photography came the aforementioned nine years at the BBC where he specialised in internet technologies and video. These days his primary interests are Java, Linux, videogames and pies - and if they're not candidates for convergence, then what is?