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April 3, 2006 at 1:23 PM

Ringtone sales growth will slow

Despite some forecasts, ringtone sales will continue to grow in 2006 — just more slowly, according to BMI, a performing rights organization that represents more than 6.5 million musical works from more than 300,000 songwriters.

BMI, which released its annual report for U.S. ringtone sales today, says that the ringtone market will total more than $600 million in retail sales this year.

In 2005, the market totaled $500 million, up sharply from $245 million in 2004 and the prior year’s $68 million.

Although there is still growth on the horizon, the estimates do show that the market is maturing. The estimates for 2006 show the growth rate will slow to about 20 percent year-over-year growth, where in years past it has more than doubled.

This can be attributed to a number of factors, including an increase in the number of savvy phone owners who have learned how to manipulate MP3s into a ringtone without having to buy one. As this occurs, companies that sell many ringtones will have to adjust. Check out the speculation as to why Dijji, a Seattle-based ringtone seller, may be closing its doors here.

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