Warner Music signs deal with ringtone company Myxer
Warner Music Group on Tuesday said it signed a deal with Myxer, a make-your-own-ringtone company whose popularity has been a thorn in the side of record labels.
The deal calls for Myxer to sell Warner's catalog of about 10,000 ringtones for $2.99 a pop. In July, Myxer will also sell song downloads, iTunes-style, from a Warner catalog of 200,000 songs, according to Steve Spiro, vice president of marketing for the Miami website. Myxer already has a similar deal in place with EMI.
Why is this interesting? Because it presumes people would rather pay $2.99 for something they can get for free. Myxer's success has largely been built on giving away ringtones. Last year, visitors to its site downloaded 700 million ringtones, and 99% of them were free, Spiro said. The lion's share of those were given away by up-and-coming artists such as the Raveonettes and Trina, who offered their songs as a way of marketing themselves.
But about 3% of those, more than 21 million downloads, came from Myxer's make-your-own tool, which lets people upload any digital song on their computer, select a 30-second snippet and send it to their phone to use as a ringtone -- for free. Myxer makes money by serving up ads while people wait for their songs to upload. Best of all, it's perfectly legal for people to do this.
The ability for people to make their own ringtones within seconds has been fingered by some analysts for the precipitous decline of the paid ringtone market from an estimated $714 million in 2007 to $541 million in 2008.
Why would someone pay three bucks for a ringtone they can already get for free? Spiro answered the question this way: "If you really like Muse, $2.99 is a tiny number."
Chances are, some people will spring for that (they're already doing so with EMI's offerings on Myxer, Spiro said). And from the record label's point of view, $2.99 is a lot better than nothing at all.
-- Alex Pham
Follow my random thoughts on games, gear and technology on Twitter @AlexPham.
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