The major wireless carriers are said to be refusing to carry the iTunes enabled Motorola device because they want their customers to be able to download songs straight to their phones, and they want a cut of that revenue.
The mobile phone operators expectations are high and they are reported to be unsatisfied with what the Motorola phone has to offer. Already accustomed to customers paying $2 to $3 to download a ringtone, they want a cut of the download revenue. But because the Motorola phone can only be loaded with music copied from a Mac or PC the carriers are left out of the revenue stream.
Nor can the carriers justify the higher download costs they are used to, thanks to the popularity of ringtones. Macnewsworld suggests: "Comparing full-length songs to 30-second ringtones is like comparing apples (the fruit, not the company) and oranges: Just because consumers will pay $3 for a portion of a song doesn't mean they'll fork over the same amount for the whole thing."
Macnewsworld's explanation for the reason why teens will pay $3 a ringtone is personalization: "Shorthand for consumers to explain to the world within earshot who they are." The same teens are not prepared to pay more than $0.99 for a full track.
At Apple's $0.99 a track tariff, an album costs about $12. If the carriers were to charge ringtone like prices an album could cost $24 to $36 – and, says Macnewsworld "overpricing is exactly what landed the traditional music industry in such dismal financial shape."
As reported previously, Cingular Wireless' chief technology officer Kris Rhine said: "Crafting a workable revenue-sharing plan among carrier and partners remains a big hurdle. From the carrier's perspective, music is no different from the business model for other content, including ringtones and games.
"The difference is that before ringtones or mobile games were introduced, users had no price history for them."