August 11, 2005
Music industry gets hip to new income sources
The San Francisco Chronicle reports that, according to industry executives, the recording industry, which long relied on selling CDs to make money, is undergoing a "fundamental change" thanks to the proliferation of ring tones, downloadable songs and other digital entertainment products.
"Sony BMG Music Entertainment executive Thomas Hesse said an "explosion of product types'' offer new sources of income that could reverse those losses. Music firms now sell millions of a new song as a ring tone before it becomes available in stores or on the radio.
The movie industry has used such distribution "windows" for years, generating revenue from the timed release of movies in theaters, pay-per-view and free television, and home video.
Hesse said the record industry can follow suit. "In the video space, we are going to see pay-per-download or pay-per-view (music videos) before they are made available on the free Internet or free on MTV," he said.
Hesse also expects to see tiered prices for songs, so that, for example, a downloadable song of a hot artist's new single would cost more before it is released online and become available a year later as a discounted ring tone or free with the purchase of a CD."...
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