Music Industry Inside: Ringtones can cost more than the actual song!

Juniper Research released a report in 2005  stating that the ringtone industry could bloat to $9.3 billion (USD) by 2009.

Lets take a look at Britian’s  No1 in the charts right now to get a feel of where things are headed.  Introducing  Lady GaGa

Just Dance (Download)
by Lady GaGa

Price:

$0.99

Just Dance (Ringtone)
by Lady GaGa

$2.49 *

Hmmm so it appears the standard pricing is that the ‘actual song’ is nearly three times the cost to purchase than a snippet in ringtone format.

” While the downloads of mobile ringtones and realtones will comprise the bulk of revenues ($4.8 billion), the market for full-track downloads is expected to increase from just $20 million in 2004 to nearly $1.8 billion in 2009, while ring-back tones – already generating substantial revenues in Asia – should be worth $2.7 billion worldwide by the end of the decade”

And depending which source you read a staggering $14 Billion by the end of 2011 (ezinearticles.com)

Still waiting to find the results of that particular forcast however there is no deneying the effect that the music industry is in a strange position right now where the ringtone can cost more than the actual song.

Music sales worldwide fell by about 7 percent last year as another sizable jump in digital sales failed to make up for a deepening decline in the compact disc market, according to John Kennedy, chief executive of the industry’s main international trade group. The IHT reports.

Revenue from music sold over the Internet, via mobile phones and in other digital forms, rose by 25 percent last year, to $3.7 billion, the International Federation of the Phonographic Industry said in a report set for publication Friday. Digital sales accounted for 20 percent of the industry’s revenue, up from 15 percent a year earlier.

Meanwhile, growth in downloads from online music stores like Apple’s iTunes has slowed. … That is hastening the music industry’s push to develop new business models for digital music.

Major record labels have joined with Nokia, the maker of cellphones, to provide free, unlimited music downloads in Britain. …

“The industry has shifted to Plan B,” said Mark Mulligan, an analyst at Forrester Research. “The record companies have realized that the only way they can fight free is with free itself.”

“Mobile Music Sales Will Reach $3.2 Billion by 2012 But Analysts Say ‘Tracks Must Be Free’, The music industry has got to be prepared to give music away for free”according to analysts Screen Digest.

But full-track downloads will only make up half of that, with the rest still coming from things like ringtones. The report warns “paying for music is progressively becoming a niche activity as the value of recorded music is already in steep, possibly terminal, decline”.

In 2000, U.S. consumers bought 785.1 million albums; last year, they bought 588.2 million (a figure that includes both CDs and downloaded albums), according to Nielsen SoundScan. In 2000, the ten top-selling albums in the U.S. sold a combined 60 million copies; in 2006, the top ten sold just 25 million. Digital sales are growing — fans bought 582 million digital singles last year, up sixty-five percent from 2005, and purchased $600 million worth of ringtones — but the new revenue sources aren’t making up for the shortfall.

Hense Crazy Frogs mere existence

Source:
http://ezinearticles.com

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