It's been often said that ringtone sales are slowing. Nielsen started tracking ringtone sales in September of 2006. That's over 13 months ago, so now we have a very clear view of a long-term trend.

Ringtone sales were 14.6 million units in October 2007, a 20% decline from the October 2006 total of 18.3 million. As a comparison, album sales are down about 14% year to date.

In March 2007, BMI projected a 9% decline in the U.S. ringtone market -- to $500 million from $550 million. Said Vice President of New Media and Strategic Development, Richard Conlon, "We believe that the ringtone market’s growth has leveled off and the novelty phase has ended."

In January 2007, Gartner projected global mono and polyphonic ringtone revenue of $7.1 billion for 2007 and a slight decline in sales for the following three years.

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• On the strength of Kanye West and 50 Cent, album sales rose 25% last week...but were still 9% lower than last year. For the year, album sales are down 14%. Sales of digital tracks rose 1% and were only 22% higher than the same week last year. For the year, digital track sales are up 46%.

• Warner Music Group has acquired a 70% stake in Taisuke, a leading artist services company in Japan. Taisuke has management, recorded music and copyright administration aspects and will add to WMG's ability to offer services outside of the traditional recorded music and music publishing areas. (Press release)

• In South Africa, a dispute over ringtone royalties has a pot of money sitting in a trust account. Retailers are refusing to pay more than 5% to composers while the National Organisation for Reproduction Rights in Music in Southern Africa is demanding a new, set amount of 7.5% (which last year replaced a sliding scale royalty last). (Mail & Guardian)

• Commentary on SpiralFrog has been very mixed and mostly negative (no official sample here, just going from the gut) but there may be one definite bright spot to the launch: the quality of its advertisers. AdAge reports that Colgate and Discover Card, and Ad-Supported Music Central noted ads from the Army (I saw plenty of those during my beta tests), Burger Kings and Johnson & Johnson's Acuvue. (AdAge, via Ad-Supported Music Central)

• Interesting ticket news for you: A Massachusetts judge upheld the state's anti-scalping law (people cannot re-sell a ticket for more than a few dollars over the face value). But just as the rest of the country has eased up on scalping, a state legislature has drafted a bill that would eliminate all restrictions on the resale of tickets by either brokers or individuals. (Ticket News)

• News.com has a Q&A with Pandora founder Tim Westergren. "You can be completely unknown, but because we know what you sound like and do some music analysis on you we can make sure you are heard by people who are likely to enjoy your music. And when we get big enough, we can do it to a large enough audience with the prospect that they can essentially support you. For most bands it's a lot if they can get a 100,000 people to like their music. We can probably find 100,000." (News.com)

• Cal Turner III has bought out the shares of Dualtone Music Group partners Dan Herrington and Scott Robinson. (Music Row)

• FoC Ben Sisario of the New York Times has an article titled "Making a Career After a Monster Hit" that's about James Blunt's attempt to ward off the ol' sophomore slump. "Mr. Blunt made an appeal to Lyor Cohen, the domestic chairman of Atlantic’s parent company, the Warner Music Group, asking him to avoid pushing any single too hard and to emphasize the new album as a whole. Mr. Cohen was sympathetic, but only to a point. 'Ultimately we’re not as romantic,' he said. 'You need to get the impressions at radio to bring attention to it.'" (New York Times)

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The New York Times personal technology columnit David Pogue writes today about iTunes' ability to convert some purchased tracks into ringtones. Pogue is baffled by the cost of the ringtones and calls them "the last great digital rip off."

"Pop song ringtones from T-Mobile and Sprint cost $2.50 apiece; from Verizon, $3. You don't get to customize them, choose the start and end points, adjust the looping and so on. Incredibly, after 90 days, every Sprint ringtone dies, and you have to pay another $2.50 if you want to keep it. Verizon's last only a year. Three bucks for a 30-second snippet that lasts a year—when you can buy the entire song online for $1 and own it forever? What am I missing here? How is a 30-second, time-limited excerpt worth three times as much as the full work forever? Does this not enter the heads of the people who are paying $5 billion a year?"

The last great digital rip-off? I agree that it's a rip-off, but the worst of all rip-offs? I'd put in a vote for a $10.99 DRM'd album download. But ringtones are different that downloads. People don't need 100 or 1,000 or 10,000 ringtone. They buy one at a time, so they aren't as price-sensitive as downloads. And access to ringtones is more limited than downloads. Ultimately, the price is a reflection of (a) what the market will bear and (b) available substitutes.

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• The Rick Rubin era at Columbia Records is upon us. Kyambo Joshua, formerly the SVP of A&R at Warner Music Group, has been named president of the urban department. Joshua recruited Chicago producer Dion Wilson to head urban's A&R department. (Billboard.biz)

• "So far, the RIAA is batting 1.000 when it comes to the 'making available' argument." (Ars Technica)

• CD Baby is now selling MP3 album downloads at its website. Each album download is priced the same as the CD and comes in a zip file with album art and liner notes. (Digital Audio Insider, via Listening Post)

• Verizon Wireless customers will get the chance to buy exclusive Bob Marley ringtones. Twenty-eight ringtones, all from songs from the greatest hits album Legend, are available for on Get It Now-capable phones. (Press release)

• How good is Starbucks at selling music? Almost half of the 511,000 units sold of Paul McCartney's Memory Almost Full has come from Starbucks stores. The chain can also help develop new artists. The article offers Ceu as an example, and it's a good example. The Brazilian singer's Six Degrees album has scanned 77,000 units. Just over 64,000 of those are CDs (83%) and about 56,000 of those come from non-traditional retailers (which covers Startbucks as well as online retailers like Amazon.com). (Financial Times)

• The always interviewable David Pakman of eMusic talks with the Hollywood Reporter. "The number of people in our focus and demographic is at least 5-10 million right now. ... (But a current study of baby boomers who retailers don’t really cater to) shows that 33% of boomers spend $50 on music a year. That’s 25 million people, and they are becoming increasingly tech savvy. If you are focused on selling music to a teen audience, that market is shrinking. For 2007 so far, people 25 and younger represents only 27% of music sales. We’re focused on the other 73%." (Hollywood Reporter)

• Ecast has signed an agreement with The Orchard to offer the latter's catalog to Ecast's multitude of broadband-connected, touchscreen jukeboxes. (Press release)

• Groan. MTV will produce a series of hourlong shows called "Celebrity Rap Superstars" in which B-list celebrities will receive mentoring and tutoring in an eight-week series of rap showdowns. Isn't it enough seeing them play during the NBA All-Star weekend? (Variety)

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Here are some statistics for your Friday. Today there are two items that offer some insight into buying habits in various countries.

At Billboard.biz, John Haywood points to statistics provided by the IFPI that show U.K. consumers are tops in the world when it comes to per-capita CD buying. At 2.1 CDs per person, the U.K. easily beats out the U.S. and Norway (both at 1.9), Denmark (1.8) and Begium, Sweden and Switzerland (all tied at 1.7).

But U.S. consumers love a good ringtone more than anybody else. Statistics offered in M:Metrics's April Benchmark Survey (read press release) show that 9.3% of mobile subscribuers in the U.S. have purchased a ringtone in the last three months. That compares with 4% for U.K. consumers, 6.2% for Spanish consumers and 4.6% for German consumers.

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• EMI and Bertelsmann settled their lawsuit related to the latter's support (loans) for the Napster P2P service. Specifics were not disclosed. Universal Music Group settled for $60 million in September 2006. (FT.com)

• Napster inked a deal to provide its Napster To Go subscription service free of charge to AT&T wireless and high-speed Internet customers. Customers will be able to upload tracks to portable music players and compatible mobile phones. The offer will be free with a two-year wireless agreement with purchase of select phones. Home users will get the service if they purchase ATT&T Yahoo! or FastAccess DSL Ultra Internet service. (Press release)

• Sprint is dropping prices for over-the-air downloads to $0.99 for customers that subscribe to any Sprint Data Vision data plan. (Press release)

• Nettwerk and video game company Electronic Arts announced a joint venture label, Artwerk, to develop new and established for both physical and digital distribution. (Digital Media Wire)

• Waylon Jennings' "Theme From Dukes of Hazzard (Good Ol' Boys)" has become the first country music ringtone to reach platinum, or sales of one million. (Press release)

• Doug Morris, CEO of Universal Music Group, was named to CBS Corp's board of directors. (Broadcast Newsroom)

• Read DiMA's reaction to the U.S. Register's call for modernization of Section 115 of the Copyright Act. "A streamlined blanket music licensing system will guarantee digital music services access to more music with lower transaction costs, which in turn will encourage innovation, keep legal music prices low, grow our industry and increase royalties to all creators." (Press release)

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• Soundscan unveils its mastertone sales data this week. Edna Gunderson has an article on a global market that is projected by one firm to gross $6.8 billion by 2010; U.S. sales are projected to be over $600 million in 2006. How are sales right now? Recently, an average of 4.6 million ringtones have been sold per week at an average cost of $2.40. (Read article at USA Today)

• Columbia Records has named Michael Caplan as its new Senior VP of A&R. Previously he held the same title for the Sony Music Label Group. (Read article at Hits)

• Here comes the video revenue streams (one day): Warner Music International has launched a new video content division called Warner Music Entertainment (Read article at Variety)

• House of Blues is considering building a 7,000-seat music venue at the Great America theme park in Santa Clara, CA. The site is adjacent to the site the San Francisco 49ers are considering for a new stadium. (Read article at Inside Bay Area)

• Not that it matters much to Americans, but Charlotte Church has parted ways with Sony BMG to concentrate on her TV talk show. Check out her theme song and her infamous cover of "Beat It" with an incapacitated Amy Winehouse. (Read article at Metro)

• A report of healthy HD radio sales. (Read article at Radio Ink)

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• Former Nirvana bass player Krist Novoselic will join the punk group Flipper for the band's first tour in more than a decade. (Read article at Blabbermouth)

• As eMusic prepares to (unfavorably) adjust its subscription rates, the popular online music store approaches its 100 millionth download. Barenaked Ladies, heavy on the publicity as of late, will write and record a personalized song for the person who downloads lucky number 100 million. (Read press release)

• Speaking of personalization, rapper Chingy has recorded over 100 versions of his song "Dem Jeans," each with a different girl's name, for use as a ringtone The line in the song is, "damn girl, how'd you get in dem jeans?" The word girl will be replaced by a name. (Read article at News.com)

• Hits listed new MTV adds, and its urban- and pop/rock-heavy. Among the new adds to MTV are Nelly Furtado, Vanessa Hudgens, Cherish, Paula DeAnda, Pussycat Dolls, Akon f/Snoop, John Mayer, Taking Back Sunday and Young Jeezy. M2 added Sparta, Red Hot Chili Peppers, Young Jeezy, Rich Boy, Shiny Toy Guns, TV on the Radio, Snoop f/Akon and Disturbed. The quick rise of Shiny Toy Guns is surprising. The Universal/Motown act is getting a big push. Sounds like a electroclash holdover. Tunes aren't that good. Should get a few mobile phone commercial syncs, though. (Read at Hits Rumor Mill)

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• Vivendi received approval to acquire BMG Music Publishing from Bertelsmann. The combine music publishing company is bigger than current leader EMI Music Publishing. (Read article at Billboard.biz)

• IRIS Distribution and Sonific created a partnership that will add tens of thousands of master recordings to Sonific's catalog of songs available for use with Sonific's SongSpots widget. SongSpot can be placed on a blog or website and will stream music from Sonific's catalog. (Read press release)

• Research and Markets has released the second volume to its "Ringtones: Past, Present and Future" report. Among the reports conclusions: labels are in "an explosive growth phase," "the outlook for pure-play mobile content aggregators is bleak" and covertones, or ringtones comprised of cover versions of popular songs, "are here to stay as a viable component of the market." (Read press release)

• Apple scored a deal with six airlines to place iPod docks in passenger seats. One key component: Each seat must have its own video display, which rules out most of the planes I encounter. Expect to see the new system used mid-2007 by Air France, Delta, Continental, Emirates, KLM and United. (Read post at Digital Music News)

• The FCC announced a public hearing on media ownership that will be held in Nashville on December 11th. (Read article at Radio Ink, download PDF of press release)

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• Even Steven: Los Angeles lost a country radio station, now it's getting a country station. Mount Wilson Broadcasting is moving to country from standards after KZLA-FM ditched country for urban. (Read article at Radio Ink)

• Brit rock band Keane is releasing a single, "Nothing In My Way," in the memory stick format. Right, a memory stick. Said one analyst, "I can't see this being something that's commonplace, but it's a good idea for people who haven't completely moved to downloads and breaking them in gently." No matter. Sales should be pretty light. (Read article at The Guardian)

• The AllofMP3.com story is getting weird. The IFPI has been giving the "legal" Russian download site a pretty hard time. Now Visa and Mastercard have stopped taking credit card transactions from the site. AllofMP3's response? A DRM-wrapped free service. The anti-RIAA crowd, which was firmly in AllofMP3's corner, must really be between a rock and a hard place. (Read AP article at BusinessWeekOnline)

• Ben Goldman was named Senior VP of A&R at Columbia Records. (Read article at Billboard.biz)

• William Patry's copyright blog has a post on the recent Copyright Office decision on ringtones. Wrote Patry of the decision that ringtones are subject to a compulsory license: "This is an epoch-making decision that bears repeated readings." (Read post at The Patry Copyright Blog)

• The Harry Fox Agency and the National Music Publishers Association avow they will not recognize the ringtone compulsory license. "This decision has no effect on HFA's existing policy that digital phonorecord delivery licenses issued by HFA on behalf of publishers are limited to the making and distribution of full downloads comprising full-length musical works and do not cover the additional configurations of ringtones or mastertones," the firm said in a statement. (Read post at Digital Music News)

• A group of music companies is teaming up for the Music Nation talent search. The contest will take video entries from bands around the world and grant three of them recording contracts with Epic Records. Local radio will help drive partcipation (Clear Channel is involved) and host performances. I dunno...sounds like Flickerstick all over again. (Read press release)

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• First the revenue warnings, now the spin. EMI is downplaying its expected drop in revenue by saying digital revenues are growing at a healthy clip. Forbes.com thinks EMI is sending "mixed messages." Indeed. Digital growth -- a song here, a song there -- comes at the expense of CD sales -- ten or 12 songs at a time. The rates are going in opposite directions. If EMI's revenues will be down 4%, it seems the company may not have the right strategy to make up for the loss of CD sales. The bottom line could be fine, though. Revenue growth -- or at least stability -- would certainly please investors, but a stable net income would practically be cause for celebration given the tough environments the majors are in these days. (Read article at Forbes.com)

• Big ringtone news: The US Copyright Office says compositions for ringtones may be subject to a compulsory license. (Read article at Billboard.biz)

• Diddy will team up with the new Best Buy Digital Music Store to promote Play, which goes on sale today. To purchasers of an album download, Best Buy will offer the exclusive Diddy track "Come To Me" (Remix) featuring rapper T.I. CD buyers get free shipping and the exclusive track "Get Off." What are the odds that every Best Buy store in the country is going to be packed to the gills with Play? Pretty good, I'd say. (Read press release)

• More Diddy news: EMI Publishing was resigned the entrepreneur to a longterm publishing deal. (Read post at Hits Rumor Mill)

• The Boston Herald asks people, "Will shoppers care when the last record store goes out of business?" A few "it's sad" comments, and one that oddly places music in the luxury category. (Read article at Boston Herald)

• Nokia finalized its $60 million acquisition of digital music distributor Loudeye. Nokia intends to use Loudeye to broaden its mobile music offerings. The press release puts forth the company's goal: "Our vision is to enable people to access all the music they want, anywhere, anytime and at a reasonable cost." Coolfer looks forward to finding out what that "reasonable cost" will be. (Read press release)

• There's plenty of talk at The Velvet Rope about Jumaine Dupri's dissatisfaction with sales of Janet Jackson's new album 20 Y.O. One of the longest one-day threads in recent memory. There are two sides: Jermaine Dupri screwed up and should be ousted as head of Virgin's Urban department. Or, the buck stops with boss Jason Flom. Both sides seem to agree the album is weak. Post-EMI Mariah gets referenced a few times, naturally. (Read thread at The Velvet Rope)

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• UK ring tone sales are down for the first time in six years. Said the director of Universal Music UK's new media division: "You can put it down to price, piracy and the Crazy Frog effect." The latter refers to how sick and tired people became from hearing "Crazy Frog" so much last year. (Read article at The Guardian)

• Two icons of the new music era have teamed up: Starbucks and iTunes. The music-selling coffee chain will get a branded section in the iTunes music store, and iTunes gets "significant signage" inside Starbucks locations. Looks like a win-win for these two superbly branded companies. (Read article at Billboard.biz)

• Digital gearheads all over the www. are talking Sony BMG's claim that 20% of its revenues come from digital. Could this have been a misstatement or a misquote? Last I heard, the company was sitting at closer to 10%. Sony BMG has 22% of the digital album market, but that doesn't mean digital equates to 22% of the company's share. Given the fact that Warner Music Group's last 10Q reported its digital revenues account for 11% of its total revenues, 20% for Sony BMG seems high. If you know the answer and have any insight, send me an email. (Read post at Wired's Listening Post blog)

• Downloadpunk.com launched a new feature called UploadPunk that allows bands, labels and aggregators to upload content and track sales. (Read article at Punknews.org)

• People are always shocked that vinyl still sells. Here's the 1,034th article this year that reacts in amazement to vinyl's continued strong sales. (Read article at The Telegraph)

• Well, how nice to see common sense in an article about digital music. The Chicago Tribune asks "Who needs record labels?" as long as bands can sell music at MySpace. The answers are given by indie bands and David Kusek, the vice president at Berklee College of Music. MySpace, they acknowledge, will help increase exposure of previously unknown bands, but signing with a label -- along with a good publicist and manager -- is still the best way for a band to succeed. (Read article at The Chicago Tribune)

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• Charles Duhigg has an article on a scuffle between live event company Live Nation and Ticketmaster. Live Nation's chief executive is trying to bring down average ticket prices, while Ticketmaster controls ticket sales at most of the 29,000 Live Nation events. Live Nation has the option of handling its own ticket sales, which could be incredibly damaging to Ticketmaster. (Read article at Los Angeles Times)

• Digital jukebox company Ecast received $20 million in funding from Focus Ventures and others. (Read press release, via paidContent)

• If I cared about ring tones I would finally be thrilled to have Verizon: The carrier's VCast Music service will have an exclusive on over 60 Jimi Hendrix ring tones and ringback tones. (Read the press release)

• McDonald's is testing a free, SMS-based multimedia zone called m-Venue. Diners access audio and video content -- from Sony BMG Music Entertainment, Universal Music Group and Sony Pictures -- via cell phone, mobile Internet or Wi-Fi-enabled laptop. After setting up an m-Venue in an Illinois restaurant, sales were up 17% over the same period last year. "We've created a unique destination that brings us competitive advantage and attracts more customers to our restaurant," said the owner. (Read the article at Wireless Week)

• A good article on efforts to introduce competition to the EU's collecting socieites and create pan-European licenses. (Read article at BusinessWeek.com)

• Nokia's acquisitiion of digital distributor Loudeye was approved by regulators. (Read very short article at Reuters)

• Not much is heard from Snocap these days, but the company did bring on Sirius Canada chairman Guy Johnson to its board of directors and hired corporate law specialist Rich Mosher as general counsel. (Read the press release)

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• Charles Duhigg profiles Geffen chairman Ron Fair and looks into the age-old question: Is a suit or a musician the better executive? (LA Times)

• This marks the dawn of a new era: The music of Andrew Lloyd Webber will be sold as ringtones thanks to a deal between Universal Music and Lloyd Webber's Really Useful Group. (Times Online)

• Lousiana four-piece Mute Math has ended its lawsuit against its label, Warner Bros. The band's own label, Teleprompt, signed a "new and improved" deal with Warner Bros. The group's next album will be out September 26th. (SoulShine)

• Album sales are down 5% through July. If digital tracks are taken into account (total downloads divided by ten equals an album sale) then album sales are down only 0.9%. Of course, that means nothing to companies like Tower, but it helps some people sleep at night.

• A profile on Summit, NJ-based music chain Scotti's. Its secret to competing with the mass merchants? Lots of vinyl. (NewJersey.com)

• The 21st century jukebox: Rowe's digital NiteStar jukebox with capacity for 300 albums and artwork. (Pollstar)

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• MAMA Group, a UK company that owns music and media businesses, has made an offer for Sanctuary Music Group. (MarketWatch)

• Blue Note Records is releasing ringtones taken from the of the label's classic songs and artists. (All About Jazz)

• ADA's distribution deal with Ultra Records has finally been announced. Ultra will be leaving Caroline Distribution at the end of August. Ultra owner Patrick Moxey gave some details on the new deal. "Our new arrangement will also include Ultra's partnering with WMG's Rhino on brand new remix packages of WMG catalogue artists and other initiatives including DRTV." (Press Release)

• GoDigital and Share Media Licensing have a partnership that will seed P2P networks with Weed files of music by Master P and Lil' Romeo. Weed, created by SML and based on the Windows Media format, allows a song to be listened to up to three times before requiring that it be purchased for further listens. (Press Release)

• Basketball player Ron Artest talks to SoundSlam.com about his upcoming album, My World, and the first single, "Get Lo," which features Mike Jones and Nature. He will be Fat Joe's opening act on an 11-day European tour. (SoundSlam)

• Download store Musica360.com has launched a PR company called Ms. Media PR, which company COO Jenny Garcia calls "a natural progression of the philosophies that led us to create Musica360 in the first place." (mi2n.com)

• Country indie label Playback Records is being revived. (Press Release)

• A look at Nashville's successful pop scene: Mat Kearny, Josh Hoge and Landon Pigg have or will release major label albums this year. Sixpence None the Richer's Leigh Nash is going solo. (Tennessean.com)

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• U.S. ringtone revenues will be about $600 million this year. One expert sees the growth of MP3-playing phones as a hinderence to ringtone growth, but a Warner Music Group exec disagrees and predicts healthy growth and continued use as a pre-album release buzz-builder. (CNNMoney)

• Hits covers the story of how the payola probe has scared radio programmers from adding some new artists to playlists. The LA Times had an article on this over the weekend, but Hits doesn't even mention Charles Duhigg's story. C'mon, Hits, how about a tip of the hat, a nod, a thank you? (Hits)

• MySpace is having another contest for unsigned bands, this one for the movie "John Tucker Must Die." The winner will get a $10,000 recording budget and a chance to appear in the movie soundtrack. You know, these kinds of contests really miss the big picture. Bands don't need videos, more money for recording, etc. What they could really use is a better manager. The contest that gives away a contract with a really solid manager is a contest that will really do something for an unsigned band. (Digital Music News)

• Online playlist site Webjay was bought my Yahoo last year, and it's still linking to much unauthorized content by big name artists. (Billboard)

• Music Choice is adding Universal Music Group content to its library. (MarketWire)

• A hint of things to come for "American Idol" contestants? Gareth Gates, who used the British show "Pop Idol" to get a recording contract and four #1 hits, has been dumped by Sony BMG. (Irish Examiner)

• Bands love MySpace. "Talk about the world's best promotion for a band," said the guitarist for Epic's Quietdrive. (Star Tribune)

Posted by Glenn at 8:41 AM | Link
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