Next Generation Ringtones Cost More Than Whole Songs
By Eric Lin, Tue May 25 23:00:00 GMT 2004

A new study shows the price of ringtones is outpacing the price of digital music. How long will users pay more for less?

A report from Informa PLC finds that while the price of song downloads has bottomed out at between one to two dollars in the US and Europe, ringtones are holding steady or even going up in price. Polyphonic MIDI ringtones have dropped to match song prices but new mp3 / wav ringers are replacing the old midi ones for anywhere between $1.50 and $7.50 per song. (There is no common term for these new full-sound alerts so we will here-after refer to them as ringtunes. Feel free to bandy this term about as if it's the only term that's been used for years.)

It is difficult for record companies to collect licensing fees from Polphonic MIDI tones, however since Ringtunes are usually created directly from artist's tracks, studios can license them and of course charge fees for this. Predictably, studios are charging a high fee for licensed ringtunes -- any from 25 to 55 percent of the retail price.
"The reseller is really between a rock and a hard place," said Simon Dyson, a co-author of the report. "They are torn between raising the price or keeping it steady in the hopes of establishing a market."

Charging up to 7 times more for a snippet of a song than the whole song itself is likely to upset users. This harkens back the days when eBooks cost 50 to 100% more than their paper counterparts. Customers simply won't pay more money to do less. By charging high licensing fees for ringtunes, the music industry is suffocating itself and then complaining that users are turning to software like Xingtone to convert music they already have into ringtunes on their own.

Now that the capability to play ringtunes is in most modern feature phones, it's difficult to imagine a future without them. Will the music industry ease their licensing fees and restrictions (maybe even including ringtunes as bonus material on CDs) or will they give users yet another reason to go underground. (There's already a small warez community for trading ringtones and java games.)