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.