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Billboard reports that the major recording labels are getting ready to launch the “ringle” which combines the (mostly defunct) CD single format with ringtones for mobile phones. Each ringle is expected to contain three songs - one hit and maybe one remix and an older track - and one ringtone, on a standard CD with a slip-sleeve cover.  This marketing idea enables music retailers to get involved in the ringtone phenomenon. The Recording Industry Association of America (RIAA) has approved the “ringle” name, and there is an industry-wide logo to help brand it.

Sony BMG Music Entertainment, which came up with the ringle idea, and Universal Music Group are going to be the first out with ringles. The former will unleash 50 titles during October and November, while UMG will have anywhere from 10 to 20 titles ready. 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 sub $4. If it’s $5.98, ringles will have a 31% gross margin, shy of the 35% profit margin that CD albums carry nowadays; if it’s $6.98, that would give retail a 42.7% gross margin, similar to the profit margin cassette and vinyl albums enjoyed back in the day. Some major US retailers, including Amazon, have agreed to support the configuration.

[your heard it first on UlsterTunes.mobi - ed]

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