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Major record labels raking in off ringtones

Written by James Delahunty (Google+) @ 25 Jun 2005 13:00 User comments (11)

Major record labels raking in off ringtones Major record labels are starting to see some high revenue from the sales of ringtones to mobile phone users. These "real sound" ringtones, playback usually only for about 15 seconds but the company that sells them could charge easily 3 or 4 times as much as iTunes would charge to download a full music track to a computer. Major record labels are now seeing ringtones as a new "piracy free" source of revenue that could help fix any damage cause buy lost sales due to rising rates of piracy around the world.
"This is not a fad that will go away in the next year or so," said Thomas Hesse, president of global digital business at Sony BMG Music Entertainment. Of course it won’t go away; people will always be looking for tones to be played when they are receiving incoming calls. However, up until recently, phones could only handle polyphonic and monophonic ringtones at best, but compared to real audio (or what the industry refers to as "master tones") they sound pretty dead and lifeless.

"We knew it was an area of revenue that had record companies excited, but I don't think we were really prepared for the dimension of success we were seeing," said Geoff Mayfield, Billboard senior analyst and charts editor. Billboard launched a sales chart for ringtones last October. In many cases now, ringtones are outselling download sales. For example, "My Goodies" by R&B singer Ciara has already been sold as a ringtone over 1 million times.

The music industry would like to see mobile phones eventually become everyday multimedia devices, and they believe they can rely on them enough to not worry about piracy. However, it's likely that upcoming mobile phones will support MP3 playback and as well as allowing you to play mp3 through a headphone, they should also allow you to use a certain of any MP3 file stored as a ringtone. While it will be a good source of revenue, I would highly doubt that piracy won’t be a problem.


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11 user comments

125.6.2005 13:32

This is why I dont like The RIAA, because all they care about is money. I bet if you asked the artist Ciara how much money He/She made off those million, it would not be much, because the record companies take way to much of the profits from the artists. If it wernt for the artists the RIAA/record companies wouldnt even make a buck.

225.6.2005 14:03

For them to say that piracy will not b an problem... They are dreaming!!! regardless of what the platform and media is, someone is always out there to bypass the cost of ligitmitly purchasing the actual item. U can do it know with ur phones sending each other ringtones for a cost of a msg... soo go figure i say.... and on the issue of the artist gettin $$$ from ringtones sales. It all depends on the artists contract... (fine print)

325.6.2005 16:35

I agree with you, macburner. Always out to squeeze more money out of people. The RIAA used to be necessary when artists couldn't afford to distribute their media. With the internet came the ability to cheaply distribute information on a large scale. The RIAA has become obsolete. Only a matter of time before artists realize this and turn their backs on them.

425.6.2005 17:57

They must be living in the twilight's quite simple to create your own mp3,or real audio ringtones, instead of paying $3.99 for a single tone. The RIAA wants to make money?, well they're not makin any money from me, and I get an unlimited amount of mp3 ringtones, for the low cost of $4.99 a month (internet access) they can choke on that...damn bastards

525.6.2005 21:24

This is part of the reason why Verizon crippled their only bluetooth phone, to make sure that you can't put ringtones on it unless you buy them using get it now. I can't tell you how much this pisses me off. Luckily there are hackers out there who were willing to show me just what to do to get the functionality that I wanted for free.

626.6.2005 0:53

i bought a usb cable. downloaded a peice of software. 2 hours of research. now i make my own ringtones from my own music files i have on my pc. my own band is my ringtone... tada..potentially pirated ringtones.... they honestly think that they wont have a pirating issue? whatever man.

726.6.2005 1:51

Few clicks in audacity and voila, a free mp3 ringtone. I should make a tutorial how to make 'em, so RIAA would get less money.

826.6.2005 5:04

Don't support RIAA, make your own ringtones using this tutorial I made ^_^

926.6.2005 5:08

Yes!!! Someone post a guide for mp3 ringtones or PM me with a site to get them for $.0

1026.6.2005 18:41

Strange isn't it..every time very large sums of money are mentioned, it's always Sony BMG at the center. It's makes you wonder just how anyone else can even get a look-in..

1127.6.2005 5:41

The reason why the record labels are raking in so much money is that with MP3 Ringtones, or Realtones, they are taking a minimum of .50 per download plus an upfront fixing fee and a minimum. As Realtones become more and more important in the industry, this is putting a major squeeze on the profit margins of the business, especially with the smaller independent ringtone providers.

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