Music firms warned over ringtones
A report published by analysts
Baskerville/Informa Media forecast that ringtones would account for 12% of total
music sales by 2008.
But music labels must rein in ambitions for unrealistically high royalties.
And it added that piracy, which has yet to hit the ringtone market, could also
spoil the party.
More and more people are downloading ringtones to their mobile phones, with the
craze particularly appealing to young women.
The findings, published in Baskerville/Informa Media's mobile music report,
suggest that the music industry needs to adopt a more pragmatic approach to
ringtones than it has taken to other ways of selling digital music.
"As the revenues in mobile music become more compelling, arguments over revenue
shares look set to increase tensions," said report co-author Steve Mayall, an
analyst with Informa Media.
Some mobile operators have argued that the music labels have become
"over-enthusiastic" about the share of revenues they deserve for sample
ringtones, with figures ranging between 25% and 55% of the price paid by end
There are also worries that ringtones could become the target of pirates.
Numerous websites are offering ringtones from artists without having the
necessary licences to do so, said the report.
Some countries have established agreements about the collection of royalties but
in some there are no procedures in place.
"Mobile piracy could decimate this still fragile business," warned Mr Mayall.
Downloading ringtones has become hugely popular. In 2003 the market was worth
£1.6 billion and by 2008 it will rise to £2.5 billion, according to the report.
Youngsters like to constantly update their mobile ringtones. One single - Round
Round by the Sugababes - sold more ringtones than singles when it was released
Despite this, ringtone sales are not expected to overtake CD singles sales any