Music industry betting on 'ringle' format

Sun Sep 9, 2007 11:07pm ET

By Ed Christman

NEW YORK (Billboard) - As the recording industry wakes up from its summer slumber and starts thinking about what will motivate the consumer for the holiday selling season, the major labels are getting ready to launch the "ringle," which combines the mostly defunct single format with ringtones.

Each ringle is expected to contain three songs -- one hit and maybe one remix and an older track -- and one ringtone, on a CD with a slip-sleeve cover. The idea is that if consumers in the digital age can download any tracks they want individually, why not let them buy singles in the store as well? It also enables stores to get involved in the ringtone phenomenon.

Sony BMG Music Entertainment, which came up with the ringle idea, and Universal Music Group are going to be the first out of the box with ringles. The former will unleash 50 titles during October and November, while UMG will have anywhere from 10 to 20 titles ready. The Recording Industry Association of America has approved the "ringle" name, and there is an industrywide logo to help brand it. But except for Sony, each major still needs to cut a deal with a digital aggregator to allow consumers to redeem the ringtone.

Meanwhile, label profit margins for the format are considered slim. The majors are gambling that the ringle can instill in consumers the mind-set to connect to the Internet via the CD.

Sources suggest the ringle will carry either a $5.98 or $6.98 list price, while the wholesale cost to retailers will be less than $4. If it's $5.98, ringles will have a 31 percent gross margin, shy of the 35 percent profit margin that CD albums carry nowadays; if it's $6.98, that would give retail a 42.7 percent gross margin, similar to the profit margin cassette and vinyl albums enjoyed back in the day.

On the plus side, big retailers like Wal-Mart, Target, Best Buy and Amazon have agreed to support the configuration, although all of them may not be ready to do so at launch date, sources say.

Source: Reuters/Billboard

It's a damn shame and people have hit rock bottom when they associate music and telephones in the same sentence.

Record companies must be REALLY desperate.

Based on the success of itunes (and not their own savvy), at least they've re-recognized the "power" of the single ...



...Hail the return of the 45 (sort of)


tA

Tribal Disorder

http://www.soundclick.com...dID=182431

For all that I know Pringles is also involved in a deal with Universal...

Yelsiap said:

What's funny is that seldomly they are promoting things on the protective lid for little websites...

theAudience said:

I like the atco 45 label. My mother had an arthur conley 45 on the atco label.

vainandy said:

Basically what they are saying is that we screwed up when we got rid of the single in the first place now lets bring it back to artists who really only have one catchy song and instead of charging 99 cents lets charge 5.99 for it. Its funny how the labels drag retailers in, since labels drove all music retailers out of business, there are no more music retailers left.