Music Industry Betting On 'Ringle' Format

[MannyGoldstein]

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.

...

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.

[Rick Myers]

1. My first thought is 'too little, too late'

This might play for some megahits and even indy bands, but I don't think it can recoup what the used to back in 'the day.'

[rucky]

2. They'll get Zero gross margin from me.

but they've got the "gross" part right.