Music to our ears?

Personalising ringtones is increasingly becoming popular among people of all ages. However, with technology making it easy for people to download the actual recording of a song and use it as a ringtone, there is significant abuse of the system. Lara Haidar of The Rights Lawyers sheds light on the issue.

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By  Lara Haidar Published  September 4, 2005

I|~|larabig.jpg|~|Lara Haidar of The Rights Lawyers|~|In recent years, there has been a massive increase in the use of mobile phone technology in the Middle East and included within that has been the arrival of several operators offering ringtones. Up until now in the Middle East, most of what has been on offer are polytones and monotones with truetones only just now beginning to break into the marketplace. Whereas polytones and monotones are reproductions of a recording involving a publishing royalty, a truetone uses the actual recording of a song. For the music industry and the providers of truetones alike, this means that the new technologies are making it possible to wring even more profit from the music industry’s vast song libraries. Cell phones have become as important as CD and MP3 players, radio, and music videos with ringtones driving most of the mobile-music business today. The replication of songs into a series of tones costs customers between US $1 and US $3 apiece on average. Ringtones are all about personalisation of mobile phones with the user’s favourite songs. They are used to differentiate a user’s phone from those of other nearby users, and in relation to each individual user, they are also used to differentiate one caller from another. Think about using Mission Impossible as the ring for your office number, or Sinatra’s New York, New York for a friend in Manhattan for example. Assigning a tune to a caller is very popular as it is an expressive way to make a statement about a person or a relationship (it can also help users screen calls). Etisalat is reported to have 1.7 million GSM users. If you multiply that number by the potentiality of ringtone personalisation, the figures (and potential revenues) would be substantial. Add to that the fact that mobile users, especially teenagers, tend to change their ringtones more frequently to match the music chart choices — especially with the advent of things such as the 20 Hot Ringtones charts — and we clearly see why this is a market segment worth capitalising on. In the past, it is probably fair to say that there has been some uncertainty as to exactly where the publishing rights sit in the context of monotone and polytone ringtones. As a result, there has been quite a lot of apparently infringing use where royalties have not been paid and limited action to stop such infringement taken. The lack of belief in a successful infringement action was probably reinforced by the lack of any collective licensing regime within the Middle East, but things are about to change on this front (so watch this space!). ||**||II|~||~||~|Today, there is no longer an uncertainty as to who owns the master rights to songs and it is clear to whom a recording royalty should be payable, namely the record companies in this region. Companies such as EMI and (currently) BMG have physical operations within the region (including in the UAE) and with large Arabic record companies such as Rotana with huge catalogues of Arabic repertoire, there is bound to be a flurry of activity to ensure that any company offering truetone content pays the appropriate royalty. Without this, truetones would infringe the copyright in the sound recording. Under Law No. 7 of 2002, the UAE’s Federal Copyright Law, the penalty for each infringing song would amount to a fine of not less than US $2,800, with imprisonment for the infringer of not less than two months, or both. For repeated offences, the minimum fine goes up to US $14,000 and imprisonment will be for a period of not less than six months. There are a number of fairly well known providers who are very visible in terms of what they offer and how they offer it (with frequent advertisements appearing in the press here laying out the musical and visual content available for mobile use download). With the sanctions imposed on copyright infringement in the new Copyright Law, there is a course of action available to record companies to stop the infringing sale of truetones by content providers and/or to regularise such sale. The way to avoid such sanctions is for the truetone content providers to enter into proper licensing arrangements with the record companies. Another factor that needs to be addressed in the region is the average royalty that should be paid for truetone usage. The industry in the Middle East has come quite a long way over the last few years in terms of standardising the licence fees to be paid for this. However, this is an issue that merits further assessment and discussion in another article. More information on The Rights Lawyers is available on the web site, www.therightslawyers.com.||**||

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