Online Cash

New 'ringle' format

By Ed Christman

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.

Ringtones   Ringtones   Verizon Ringback Tones    Ringtones   Ringtones   Ringtones

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.

Burn DVD   DVD Burning   Burn DVD

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.

On the plus side, big retailers like Wal-Mart, Target, Best Buy and Amazon have agreed to support the configuration, although all of them may not be ready to do so at launch date, sources say.