Just had to let off some steam after yet another embarrassing statement from a so called industry expert.
An article about how full length music is overtaking ringtones. In it we read that.. “[w]ith some operators now offering full track downloads at a comparable price to iTunes, there is little justification for a ringtone retail price point that is in many cases two or even three times this level”. The person mentioning this is Windsor Holden at Juniper Research. I beg to differ and I welcome a comment from Windsor on this.
I think this is the most common mistake made by people who might need to take a step back and look at the industry they are analyzing once more. And this time from the point of view of the consumer.
I say it only once: A ringtone is not competing with a full length music track. A full length track song is not an enhanced ringtone. We buy ringtones and music tracks for different reasons. Ringtones are about expression. Music is about personal entertainment most often in a pair of stereo headphones not broadcast in public to our peers. Let’s stick to the facts ladies and gentlemen!
Anyway, most of you knew this already. I just don’t like the risk of if something erroneous being repeated enough times until will be classified as a truth.
While I agree they are different what I am not seeing in your argument is a justification for the price point for a ringtone being 3* the price of the full track.
Falling revenue from ringtones is undeniable and I suspect that the real reason for the current pricing difference is that ringtone deals are legacy agreements and the parties involved have not been able to agree their split at a new price.
When pricing a ringtone I suspect you need to find the sweetspot between price of a song and the effort a user is willing to go through to generate (or source from a friend) a ringtone for a song. In this calculation you also need to take into account that often the ringtone is not the portion of the song the user would have chosen and if the song can be used as the ringtone without any conversion being required.
I cannot see a value proposition to end users at any more than the same as the current price for a full song download but would be interested to hear your thoughts.