MEDIA
MARKET: Ring Tones
Ring tones are big business, pulling
in more than $1 billion per year globally. Ring tones are headed towards becoming
one of the hippest new product marketing, advertisement, promotion and branding tools available on the wireless and cellular
telephone platforms. The popularity is due to a need for self-expression where
a ubiquitous product that everyone has can be personalized.
The phenomenal rise of ring tones sales worldwide are outselling traditional CD singles and may be a more accurate
barometer of different markets musical taste. Ring Tones is an ever-expanding
market that can pay 3 times more than Apple's iTunes music
download service. Worldwide
sales of mobile phone ring tones increased 40% in the past year to $3.5 billion, are now roughly equivalent to 10% of the
$32.2 billion global music market.
Ring tone download technologies enable fast
strategic partnering between Distributor, Recording Artist/Songwriter and Publisher and ring tones have become
a major money spinner for songwriters. You can actually make more money having your
music downloaded for a million ring tones than you might selling a million records.
Record companies and artists
receive royalties in the same way as via CD sales. Revenues
for ring tones are divided between the music labels, publisher, artists and mobile phone
operators. Music companies that license the songs recover 30 percent to 50 percent of the customer cost per ring tone
typically a one-time cost of $1.49 to $1.99 per ring tone.
Ring tones are basically free advertising for labels, and a great way to vest fans. This is a good example of how
the recording industry can embrace and benefit from new technologies, as opposed to running away. Record labels are embracing the ring tones market as a major shift in music marketing strategies as a key
part of new music releases.
Some of the major labels are hoping to reverse falling single sales by including
free ring tones on a new disc format. Pocket
CDs will include a code that gives access to the tune's corresponding ring tone. Since November 6, 2004, Billboard began ranking
each week's “Top 20” ring tones sales with Billboards Hot Ring Tones Chart that includes
the song title, artist, number on previous chart and current number, just like a normal Billboard music chart.
The
Harry Fox Agency which represents the
interests of music composers and songwriters in mechanical royalties has agreements with recording companies for use of songs
on-line and now has begun a program to enable licensing of cell phone ring tones. Harry Fox works with 20 ring tone providers
and consequently created an easy system to allow them to license
their works. This marks a move to stake a claim in what is now a multibillion
dollar market.
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