Research firm Baskerville Informa Media have said that the profitable ringtones market is set to continue its expansion, and could account for up to 12% of total music sales by 2008. However, the analysts warn the music industry to not be too ambitious in the potential earnings they could make from ring tone sales. They say that, if record labels push for too high a royalty, the cost of legit ringtones could become too high which would help fuel a rise in ringtone piracy.
Informa Media's Steve Mayall told reporters: "As the revenues in mobile music become more compelling, arguments over revenue shares look set to increase tensions. Some labels are over-enthusiastic about the share of revenues they deserve".
On the potential for ringtone piracy the report says there are already websites selling ringtones without the necessary licences to do so. "Mobile piracy could decimate this still fragile business," Mayall adds.