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Ringtones


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#1 DrMarie

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Posted 04 September 2009 - 11:36 AM

Does anyone know what the legal way to sell ringtones is? Is it possible to pay royalties if we use someone's song? If so, how do you do that and how much do royalties usually run?

Can anyone point me in the right direction?

#2 Randy

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Posted 04 September 2009 - 12:12 PM

Well, there's no one place to look and certainly no single answer to the question unfortunately. It's a market I actually looked into a few years ago and decided to stay way, way away from specifically because of the royalty issues. It's confusing enough when you're talking about just in the US. It gets a lot stickier when you start talking about artists and publishers outside the US. The rules are basically different everywhere.

In the US at least there was some clarification back about a year ago. I don't have the document in front of me, but I think it was in October 2008 when a federal panel which oversees these kinds of things reaffirmed some royalty rates and for the first time established a royalty rate for ringtones. If memory serves the CD rate stayed the same as it had been of 9.1 cents per track. What they call Permanent Downloads carry the same rate.

Ringtones were set at almost 3 times that rate, at around 24 cents each for ringtones that were snipped out of an original recording. (Makes no sense to pay 3 times as much for part of a song as you do for the whole song I know, but hey, at least it's a figure!)

I'm 99% sure there was a NY Times article on the issue that I read back then with the details. Though I'm sure it's been published other places. The federal panel is called the Copyright Royalties Board, which should help you in your search for information.

Note however that this applies only to US songwriters and publishers. Once you expand outside the US borders you're going to be dealing with other entities, possibly the music publishing companies themselves.

I do remember reading a couple of articles in my Google Reader I'd set up to collect some info while doing my market research about some new lawsuit. This was just a couple months back. I want to say in the May/June/July time frame. In that one ASCAP was suing AT&T and another of the big wireless companies in the US trying to establish additional royalty payments. Again, if my memory is correct the suit was basically saying someone should have to pay additional fees because when a cell phone rings with an artists ringtone it constitutes a Public Performance. I'm not a lawyer, but to me that sounds like a pretty iffy argument to make since nobody is presumably gaining any commercial benefit from a cell phone ringing ever time it rings. And I believe the commercial benefit bit is part of the Performance Royalties standard.

Whether it's successful or not isn't really the issue as far as I'm concerned. What is the issue is that's simply the nature of the beast. And why I chose to stay as far away from ringtones as possible to make sure I didn't end up having to defend myself against a suit over something I thought I was doing exactly the right way.

My best advice? Hire yourself a very good music royalties lawyer before making any leap into the fray. Then continue paying them to stay on top of changes if you do decide to go forward. All of which costs a lot of moolah of course.




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