Warner Includes Codes for Ringtones on CDs, But They'll Cost You
By Eric Lin, Thu Jul 08 21:45:00 GMT 2004

Warner Music Group is going to start including SMS short codes on its packaging and other media for ringtone downloads. Instead of giving away these ringers as promotional items, it will charge a premium price for them.

Warner Music Group will charge $1.99 for polyphonic -- and even monophonic -- ringtones, and $2.49 for ringtunes and voice ringers. This is in line with what many American carriers charge thanks to record labels' high licensing fees, however since Warner owns the music, the fees won't apply. Since the price will be the same, the question will be who has the stronger relationship with a young ringtone shopper, the carrier, the label, or some third party who would probably sell an unofficial tone much cheaper?

It's easy to understand why Warner chose to sell the downloads for the same price as the carriers. If it had reduced the price, carriers would no doubt have complained about unfair competition and threaten to shut out or sue (or both) the labels. Instead of selling the ringtones at a reduced cost, WMG would benefit the most from giving these downloads away as free advertising. Fuse, which probably still has to pay license fees, has found some value in attracting young music fans with free ringers. Warner has even more to gain from distributing free ringtones to users it knows are fans of a band -- since they already bought a CD or poster or were interested in an ad.

Fans who purchase the CD and own a computer already have everything they need to make their own ringtone. They could create a ringtone from any track they want off the CD. By giving away specific ringtones, Warner could choose what hits these users' peers heard just as it chooses radio singles. Sure, as with Fuse ringtones, fans would probably share the short codes with their peers. However all that will do is put Warner's music on more phones. That would create goodwill with fans as well as good advertsing. Fans who just bought the CD are also more likely to see the price disconnect between buying the full track online for 99 cents and paying at least twice that for a ringtone than some guy who just heard the track on the radio. It's unlikely they would turn right around and spend another two dollars, or even 99 cents, on a ringtone after they just spent $13 - 18 on a CD.