September 23, 2004
Labels set to cash in on ringtones
The U.S. market for ringtones is set to double this year, with a sizable portion of that flowing for the first time into labels' hands, report Variety via unwired.cc.
"New report from mobile media tracking company Consect finds that the U.S. market for cell phone rings based on hit songs is growing faster than any other region this year, projected to increase by 100% to $300 million.
But it remains behind other markets, with Western Europe on track to generate $1.5 billion and South Korea alone set to take in $500 million for ringtones, while Asia as a whole will make $1.8 billion.
U.S. continues to lag other markets primarily because the domestic cellular market has been slower to develop advanced networks capable of transmitting data and new handsets that can play back complex ringtones.
In good news for music labels, Consect estimated that 15% of ringtones sold in the U.S. this year will be so-called "master" ringtones that include original recordings by artists. Those types of ringtones generate royalties for labels and artists, unlike polyphonic or Monophonic ringtones created on a keyboard that make royalties only for music publishers.
Based on a standard 50/50 split with carriers, labels will likely generate $22.5 million in gross revenue this year, with much significantly more going to publishers."
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