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May 17, 2004
I've always wondered how the heck the music industry has made so much money on ringtones (currently, a $3 billion market). Typical charges are $1-$3 for a 30-second snippet of a song that plays poorly on your phone while you can get a high quality version of the whole thing for $0.99 on iTunes. Well, as I suspected, that business model is coming under threat.
The Mercury News reports on software from Xingtone that let's people use their existing music collections to make ringtones (Do-it-yourself ringtone software encroaching on potential profits, some record labels say):
The Los Angeles company's $15 software, sold online, allows anyone with average computer skills to take an MP3 file or favorite CD track, trim it to create a 30-second ringtone and send it to the phone with the press of a button -- just like a text message.
Reactions to the software are mixed (which is an improvement from the likely reactions 5 years ago). Some music distibutors see the software as a marketing tool, others worry that it is cutting off a digital revenue stream just as it is taking off. Cell phone companies also have a mixed response with some blocking user-created ringtones while others don't worry about it much.
Despite the mixed response, I wonder if music distributors are really ready to forgo a potentially "massive" market. I wouldn't risk serious money that a lawsuit against the service won't eventually be launched.
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