Record industry reprieved by ringtones

13 Aug 2003

The struggling music industry, seemingly defeated by an upsurge in online piracy, has received a much needed boost with the news that mobile phone ringtones are set to become their most lucrative earner. According to figures released by the Mobile Data Association (MDA), sales of ringtones in the UK are forecast to rise to GBP70 million, from GBP44 million in 2002, and overtake sales of CD singles by the end of the year. CD singles worth GBP97 million were sold in 2002, down 11% year-on-year, whilst sales in the first half of 2003 had dropped 37% and look set to fall below ringtone revenues by year-end. Most of the pop music singles released by the major record companies are simultaneously made available as ringtones, downloadable for between GBP1.50 and GBP3.50, and now, with the use of high-spec handsets with improved audio capabilities becoming widespread, sales are booming, especially among teenagers. Even better for the music industry is the fact that the profit margin on a ringtone is far greater than that of a CD single, which has higher manufacturing and distribution costs. However, whilst the British Phonographic Institute (BPI), which represents record labels, confirmed that CD sales were falling it warned that ‘it is a bit premature to say ringtones will overtake CD single sales’.

United Kingdom