August 26, 2003
Music industry cries foul on ringtones
Just a year after their introduction in India, ringtones are currently ruling the mobile data services space. They rake in money – the biggest beneficiary being the service providers and number of downloads growing exponentially. But the music industry is not too happy with the present state of affairs, according to CIOL.
"It's only in India that the mobile service providers get the lion's share of the profits and the music industry gets a small share", says a source from the music industry. Mobile service providers in India get a sizable 60% of the revenue. For every downloaded ringtone worth Indian Rupees 7 ($ 0,15), on an average, Indian Rupees 5 ($ 0,11) goes to the service provider and the music company gets a paltry Rs 1.50 ($ 0,03). And this, just as the music industry is beleaguered by plummeting sales of music CDs and tapes.
The music industry's grouse does not end there. Copyright issues regarding ringtones is another cause of wrangling between the music companies and portals. Piracy of cassettes and CDs causes music companies a loss of up to $6 billion per year and ringtones only add to its woes.
Is the music industry's grouse justified? "Well, they have no right to complain. We provide the infrastructure to bring this service to cell phone users. They just sit back and enjoy the royalty," says Sean Dexter, MD, Spice Telecom.
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