May 25, 2004
Ringtones Left Out of Digital Music Price Wars
A recent price war has made Internet song downloads cheaper while the price tag on a mobile phone ringtone has barely budged, and in some cases, is creeping up, a new report on Tuesday said, according to Reuters.
"The price discrepancy between downloads and ringtones -- those ubiquitous tuneful greetings programmed into millions of handsets -- can be laid squarely at the feet of record companies, according to consultancy firm Informa Plc.
The main culprit is the advent of so-called "sample" ringtones, the latest stereophonic tones pulled from actual studio recordings.
They carry a price tag of as much as four times higher than the typical Internet download price in Western Europe -- a price gap that could prematurely stifle a promising ringtone business, Informa said.
But the problem for the piracy-battered music labels is that licensing restrictions have kept music labels out of the sector's early growth. With "sample" ringtones, the labels hope to cash in on the business.
The sample" ringtones, because they are often taken from studio renditions, can now be licensed by the labels too.
As a result, prices for "sample" ringtones across Western Europe are on the rise, ranging from the equivalent of $1.38 from Web-based reseller F1-Live in Belgium to $7.35 from T-Mobile in Britain, Informa said.
In contrast, song downloads tend to follow Apple Computer Inc. iTunes straightforward pricing model of 99 cents per track. In Europe, downloads are priced in the range of 0.99 euros ($1.20) or 99 pence ($1.79).
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