Two of the major labels and several independents are in talks to supply content to new mobile-music service provider Muzicall. The U.K.-based start-up, which launched yesterday (Feb. 10), is led by CEO Mark Collins, whose telecommunications background includes stints at BT, Marconi and Sprint International.
Muzicall is discussing possible deals with Warner Music, Sony Music and the U.K.’s Assn. of Independent Music.
Independent label V2 Records has agreed to make its catalog available for services developed by Muzicall for cell-phone operators and is in the process of signing a deal, according to Beth Appleton, V2 head of new media.
Muzicall’s key service will be music ringback tones: clips of original sound recordings that are heard by the caller, instead of the standard ringing sound, before the phone is answered. Ringback customers (the ones receiving the call) pay the mobile-phone operator to play clips of master recordings.
Ringbacks are an emerging trend in Asia. Muzicall, which has yet to announce deals with operators, believes it can tap into that popularity and boost the sector for the rest of the world.
“If we look at ringtones and how the model is moving from polyphonic tones to real tunes, it is already beginning to take off and I think ringback tones [are] going to be an interesting area to watch,” Appleton says.
Steve Johnston, head of licensing at MusicIndie, AIM’S new-media arm, says, “The labels are supporting Muzicall’s efforts, and we have been discussing terms for a license when a deal with operators fall into place.”
The ringback clip is created by taking the original recording and editing it down into a synopsis, instead of a sample of any part of the song. The use of master recordings for ringback tones is expected to boost revenues for labels. Conventional ringtones, which are merely reproductions of a song, benefit music publishers.
“The record companies and the telecom companies missed the boat on ringtones because the creators didn’t have to pay them anything,” says Nick Price, Muzicall’s director of music content. “But because we use original tracks, the labels can make money.”
Muzicall was inspired by the success of ringback tones in the pioneering South Korean market, where more than 16 million users are expected to spend $200 million on ringbacks this year, according to Muzicall figures. The service is also growing in China, Hong Kong and Japan.
Muzicall quotes projections by U.K. research company Datamonitor, which predicts that the ringtone maket will be worth $4 billion globally by 2008. It also cites U.K.-based ARC Group, which forecasts that there will be 700 million regular mobile-music subscribers worldwide by 2006.
Muzicall is partially owned by CH2M HILL, a $2.5 billion global engineering company headquartered in Colorado with offices in 44 countries. “This guarantees we can provide our telecoms clients a global infrastructure,” Collins says.
Moreover, Price owns a music-publishing company, Wasted, and co-owns three recording studios (two in the U.K. and one in Dallas) for re-mixing tracks into ringback clips. The clips are watermarked and are embedded with all the necessary data, such as the artist’s name and song title, to ensure they can be traced when distributed.
Muzicall says each ringback tone could cost £1.50 (U.S. $2.80) for each new tune, plus a £1 ($1.85) a month. This is based on a model offered for Caller Tunes, a ringback tone service offered by operator T-Mobile in the U.K. and one of the few in Europe.
Under Muzicall’s plan, the operator, the label and Muzicall would each take one-third of the net price. The label will pay the artist from its share, while Muzicall will pay the collection societies from its share.
