Saturday, November 29, 2008

Why do ringtones cost more than songs?

Dear Rich: I have a question. Why are ringtones the same price or even more than the cost of buying a digital download of a song? After all, you're only getting one-tenth of the song. Isn't the use of a small portion of a song a fair use?  The short answers to your questions are, "because the marketplace allows it," and "sometimes, but not in this case."
Considering that ringtones (also known as mastertones) account for about $9.4 billion in music business revenue, you can understand why digital download dispensers like iTunes are maxing the price. (And you can also see why these companies would want to prevent simple hacks that could kill the golden goose.) Also, the Copyright Office has legitimized ringtone sales -- its decision to classify ringtone downloads as "digital phonorecords," and its fee rates for ringtones (as the New York Times reported) have caused the price to rise. Statutory fees for ringtones are almost three times as much as those for songs. For example, iTunes must pay 9.1 cents to transmit each download of "Cretin Hop," while the statutory fee for transmitting a ten-second ringtone of that Ramones classic is 24 cents.
As for fair use, it's hard to claim that bothering everyone on the bus with snippets from "Hot for Teacher" amounts to "purposes of commentary and criticism." Therefore, the Dear Rich staff has concluded that the use of ringtones does not amount to fair use.