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Possible Universal Music Mobile Deal


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Classic rock driving ringtone growth By Antony Bruno

Tue Oct 10, 9:48 PM ET

LOS ANGELES (Billboard) - While hip-hop acts may rule today's ringtone charts, yesterday's stars are introducing the format to a broader audience and drive tomorrow's growth.

Only about 10 percent of wireless subscribers buy ringtones today, primarily young adults purchasing hip-hop and R and B-themed content. Record labels and wireless operators are keen to expand their market, particularly as the dominant format shifts from polyphonic ringtones to master recording clips. Exploiting the vast library of catalog music, they say, is emerging as a key strategy in that effort.

Acts like Devo, the B-52's, the Ramones, the Allman Brothers Band and Jimmy Buffett are generating healthy ringtone sales, and even Pink Floyd has found its way onto the mobile deck. Lynyrd Skynyrd's "Sweet Home Alabama" is one of the best-selling catalog ringtones of all time, with more than 1.2 million units sold, and became the first licensed track to appear in a mobile videogame.

Indeed, catalog-based ringtones are now the format's fastest-growing segment. Universal Music Group (UMG), for instance, says catalog ringtones sales are up 80% from last year and now represent 10 percent of all its ringtone sales.

"There is a growing audience that is interested in content that speaks to them, and it's not hip-hop," says David Dorn, senior VP of new-media strategy for Warner Music Group's Rhino Entertainment division. Carriers "have only featured hip-hop because that's all that sold. Well, that's because it's all they've featured. The only area of incremental growth for them is catalog. If all they do is focus on hip-hop, they just end up speaking to the same audience over and over."

Catalog music has been available in mobile form since ringtones first came onto the scene. But today labels and carriers are marketing catalog-based mobile content more aggressively.

Take Universal's September 26 deal with Verizon Wireless to bring the entire Jimi Hendrix catalog to mobile for the first time. Verizon won a short-term exclusive by agreeing to promote the Hendrix content heavily in print and online campaigns, as well as prominently feature the guitarist on its ringtone sales site.

It's the first time a wireless operator has applied a significant marketing push to a long-deceased catalog artist.

"Typically, operators have been focused on promoting Shakira, or Sean Paul, or Gwen Stefani or the Pussycat Dolls," says Rio Caraeff, GM of Universal Music Mobile. "Verizon felt (Hendrix) would help grow the marketplace and expose their service to more and different people than who would have seen it otherwise."

The Hendrix deal follows a yearlong music industry initiative, led by Rhino, to include a "Songs You Know" category featuring immediately recognizable classics from all major labels on carriers' ringtone sites. Sprint, Verizon, Cingular and Boost Mobile are among the carriers that now feature such a category.

Labels have responded by putting their own marketing dollars on the line. Rhino in the coming weeks will begin airing TV commercials supported by viral Internet ads promoting mobile content from the Doors -- currently its best-selling mobile catalog act -- as well as various '80s artists and old-school hip-hop tracks.

Dorn says new catalog content is making its way into mobile formats almost weekly. However, there are several challenges. First, labels are being more careful about which songs are selected to become ringtones or ringback tones from often massive catalogs.

"We have to identify what we feel are the best songs for mobile content," Dorn says. "This is not a Long Tail approach. That's how you approach iTunes -- you make really huge swaths of your catalog available and monazite those things that have been collecting dust. The business for ringtones is all about hits and instantly recognizable songs."

Second, and more significant, many major acts -- including Led Zeppelin, Bob Marley, the Beatles, Radiohead, Prince, the Eagles, Van Halen, Black Sabbath and Frank Sinatra -- remain noticeably absent in the ringtone world.

In many cases the label doesn't own the digital rights to the artist's work. In other cases, it owns digital rights to sell full tracks, but there's a "no edit" clause that prohibits the label from condensing the song into a clip needed for a ringtone.

Labels say they are in active negotiations to bring many of these holdouts around, and are close to finalizing several deals. However, some artists and their management are demanding significant upfront advances in return, while others simply don't want their work converted into a ringtone, or any digital form.

"There are always sensitivities depending on the artist," Caraeff says. "There are always challenges. You're navigating through lots of approvals. But ultimately we work through it."

He points to pending deals for Elvis Costello and Guns N' Roses in the near future.

"It's stuff like the Jimi Hendrix deal that will hopefully open the eyes of the holdouts," Dorn says. "Sometimes they just wait to see what other artists do and then they go, 'Why aren't we doing this?"'



Not sure if they're talking Chinese Democracy stuff or some of the classics, but just thought I'd post it nonetheless.

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