The music and ringtone business is being ripped off to the tune of £75m per year, as people grab free previews of ringtones via PCs and transfer them to their phones, says software company QPass.
The company studied 100 "leading" download sites - 42 mobile carrier portals, and 58 "online entertainment" and music stores offering full-track music downloads - and found that the preview files could be downloaded and used as ringtones at one-third of them. Two-thirds of the sites offered preview files between 15 and 30 seconds long, "the perfect length for a ringtone".
In some cases, the sites didn't have the the rights to distribute artists' ringtones, while others are ringtone specialists which are "inadvertently giving away their products for free", Qpass says.
The trouble is that many sites want customers to have the chance to listen to a ringtone before they buy. However, "this is the mobile and cyber-equivalent of test-driving a car and then not having to give it back to the garage," said Steve Shivers, a senior veep at Qpass. "When the trial is as good as the actual product, why should consumers spend money buying it? It’s so simple to shoplift ringtones that even a 12 year old child could do it."
The comment reminded us initially of the Marx Brothers; our initial efforts to find a price-free lunatic amphibian came to naught, until we recalled its origin. Bingo, an MPEG from which we could strip the soundtrack. Take that, Jamster!
Qpass points out that the ringtone market presently accounts for between 6 and 10 per cent of music industry revenues, and estimates that by the end of 2007 the "lost revenue" through this loophole - if left unsecured - could total £230m, "making this a significant revenue leakage problem".
Actually, you can dispute the significance. The worldwide music business is worth $30bn, so presently this is just 0.2 per cent, a rounding error. And research company Strategy Analytics reckons ringtones will be worth $9.4bn (£5.2bn) in 2008, which makes this level of stealing from insecure sites look trivial.
But be assured that the record labels are always looking for ways to plug such leaks, and so pull in more cash one way or another.
For an example, look no further than South Korea (OK, it is a fair way to look), where ISPs used to offer bloggers a choice of three "welcome music" songs, consisting of tracks that would greet the casual surfer on visiting the blogger's page. Those songs - picked from a wider range of big-name artists' repertoire - weren't licensed from the record companies; the ISPs just used them. Oh, and charged the bloggers for them.
Enter the record labels, which heard about this and thought that actually they'd like a cut of the action, despite South Korea's general indifference to IP law. After some considerable pressure a deal was signed: bloggers for their money now get a choice of 10 tracks that may greet the happy surfer, and the labels are getting a cut. How big a cut? Well, our source wouldn't say, but did point out that it was more than zero. "Artists might look at their royalty statements and wonder why they're getting money from Korean blogs," he said. "Well, that's why." Even if it is less than £230m.
Which brings us back to Qpass, which says unsurprisingly that the sites should secure their content, and should do it using Flash, which is pre-installed on 98.3 per cent of computers. Jamster already seems wise to this: its preview function uses Flash, and the software checks for Flash up to version 20. As we're only on version 7.2, it looks like we may have many more years of that accursed amphibian to come.