Saturday, April 12, 2008

Ringbacks: Mobile and music industries clash over cash

As the ringtone market gravytrain starts to disappear, mobile and the music companies are hoping that the next cash cow will be ringback tones.

This is what the person who rings you hears while they're waiting for you to answer - the hope is that you'll pay two bucks a go for music that you'll never hear and that will probably drive the person calling you batty. Will your gran know that she's actually waiting for you to pick up if she hears WASP blaring out her telephone?

The trouble (or possibly lucky thing) is, though, that any hopes of growing this market is falling apart as the record companies and mobile operators in the US have spats over money.

The product is a confusing sell, but neither side is that keen to underwrite the marketing; meanwhile, the record companies are grumpy because they only make money on the music part of the deal, not on the network charges. The mobile companies aren't keen to share revenue from the money made delivering the tones, on the grounds that the copyright holders don't actually do anything connected to the delivery. It's part of the new music industry that they seem to think they have a right to cash not just for signing over copyrights, but also for anything that's done with the music - like a tomato farmer turning up and demanding cash from Pizza Hut as they've used his tomatoes in their sauce.

Then there's the problem of, even if you do try to market the concept, no two operators use the same branding:

"Everybody calls it something different, and the only way to get it is on the deck," RCA Records director of mobile marketing Sean Rosenberg says. "How do we message this to our fans?"

For a moment, you almost wonder if RCA Records is suggesting that their mobile marketing department has its own fanbase, until you realise that anyone who uses the phrase "how do we message this" instead of "how do we tell people" is unlikely to be using English in any way recognisable to normal people.

The story of ringback tones is instructive, demonstrating the problems of the music industry in getting to grips with new markets. It's going to be similar in all the areas of handset based sales. Of course, in time, these problems will be sorted out - but since "mobile" as a distinct, wall-gardened concept is already a market for which time is running out, by the time the majors work out they shouldn't kill it through greed, everyone will have proper full internet anyway, and be enjoying bitorrent on the streets.

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