RING, RING: THE HAPPIEST SOUND OF THEM
Mobile phone ringtones are music
to writers' ears
Richard Mallett, Director of Media Licensing, APRA
If Abba were writing their classic song today,
"ring, ring" would just not do. Mobile phone ringtones
are doing to the humble phone ring what CDs did to vinyl records.
No longer satisfied with a "one tone fits all" approach,
purchasers, driven by the desire to personalise their mobile
phones, come back time and time again to update their ringtone
And damn the cost.
That's good news for music publishers and songwriters.
In fact, one and a half million dollars worth of good news in
APRA/AMCOS licensing revenue from ringtone services, this year
Ringing in a change
APRA/AMCOS has licensed ringtone services for
three years. What started as a novelty product has grown into
a multi-million dollar industry.
The market started as an internet-based product,
however, most ringtones are now sold via '190' telephone lines.
The move to 190 services has increased our licence revenue.
The scripts for the 190 services keep callers on the phone.
This increases the cost to the callers and, hence, the licence
fees paid to APRA/AMCOS.
It is ironic that kids are prepared to pay
$10 for a ringtone, but generally will not pay for a download
of a CD from the internet. This could be because the billing
process for ringtones is simple - the cost just gets added to
your phone bill and you don't need a credit card to buy one.
This is great news for publishers and writers and probably not
so good news if you are the parent of a teenager!
Telstra is also a big winner from the popularity
of ringtones as they take up to 30% off the gross before remitting
call-revenue to our licensees - rest assured that our licence
fees are linked to the gross figure.
Another significant cost for licensees is the
price of placing the many advertisements that they take out
in magazines such as Picture, People, Dolly, Girlfriend,
Ralph and Take 5. To monitor the sector and identify
new players and business trends, APRA/AMCOS purchases these
publications. We have also developed relationships with Telstra
and TISSC (Telecommunications Information Services Standards
Council). These organisations have helped us with the issuing
of take-down notices and code compliance.
Ringtone licence fees and revenue
||$10 'fixation' fee per licensee per work
used as a ringtone (fee is non-refundable and cannot be
offset against future 'mechanicals').
For each ringtone sold, the greater of 10% of the price
paid by the consumer or 15c.
||For each ringtone sold, the greater of
1% of the price paid by the consumer or 1.5c.
(Note that rates are the same for NZ except
the minimum fee is in the local currency.)
The APRA fee is for the communication of the
tone from the server to the handset. This use is essentially
the same as the transmission of a song within a digital download
service. The fee does not apply to the playing of the ringtone
on the mobile phone - that is generally not considered to be
a public performance.
This year we expect that combined APRA and
AMCOS revenue from ringtones will exceed $1.5M. Unfortunately
our ringtone revenue actually understates the true market size.
This is because the holding companies of many ringtone services
are based in the UK and are licensed through PRS/MCPS (APRA/AMCOS'
equivalent copyright societies in the UK). APRA and AMCOS work
co-operatively with PRS/MCPS to check the licensing status of
new ringtone providers and to provide local information to help
in their policing/auditing of these services.
Better quality sound
While ringtones are delivered to a mobile phone
via an SMS attachment, the actual work is stored as a midi file.
Initially these midi-files were in a monophonic format - hence
the tinny sound we all know and love!
New generation ringtones are stored in a polyphonic
format and relatively speaking, sound better. Polyphonic ringtones
are more complicated to order because of their file size and
this slowed their initial uptake. However, as licensees generally
price them higher than monophonic tones we derive a higher average
licence fee per sale. With more and more polyphonic-compatible
handsets available, polyphonic sales now represent 30-40% of
It may be that ringtone revenue falls off in
the future although we are hopeful that the introduction of
'trutones' will provide another fillip. Trutones replace midi-files
with actual sound recordings and have already been launched
in Australia, although they are only compatible with a small
number of handset-types. Interestingly, the first Australian
service to launch has used cover tones because they have not
been able to secure licences with ARIA or the record companies.
While there has also been much press talk about
digital download services extending to mobiles or viewing music
videos via your cellphone, we expect that the next new phone-based
music service will be 'ringback' or 'calltones'. These will
be launched sometime this year.
Calltones are heard by the person calling your
mobile phone instead of the normal tone they would hear before
you answer. You can allocate different tones to different incoming
phone numbers to personalise the application. Calltones have
been available in Korea for two years and have reached over
35% market penetration. If a calltone service does commence
and takes off here, it has the potential to exceed licence fees
APRA/AMCOS' ringtone licence fees, combined
with APRA's expected revenue from music on-hold means that the
combined forecast communication/reproduction licence fees from
phones will be over $3.0M this financial year. An amazing position,
when you consider that only six years ago revenue from phones
The provision of music over telephony
services - what we see already and what may be launched in the
future - is now very important to the income of writers and
publishers. Especially when viewed against the large changes
that are affecting the traditional record business, and the
fact that the industry as a whole is looking to develop new
revenue streams from the exploitation of copyrights.