01/27/06

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Ringtones, Meet Startup Tones

Major computer hardware and software manufacturers are quietly re-engineering their systems to charge users for a broad range of previously free services. Features long taken for granted will soon be available only for a fee.

The move comes following mobile phone industry's unprecedented success getting users to pay for ringtones. In 2005, ringtones brought in some $600 million in revenue, more than twice the 2004 take.

"If you look at what the phone carriers have done, it's clear that computer makers are leaving mountains of cash on the table," said one executive on condition of anonymity.

This change of strategy, known as the Open Freedom Empowerment Initiative, will become apparent immediately upon starting new model computers: Users will be confronted with an option to purchase a startup tone that plays when the machine powers up. And the same will be true for other incidental sounds associated with general computer use.

Sources familiar with the plan suggest that the opportunity to sell customized versions of the beeps and bleeps associated with computing could revitalize the industry.

In anticipation of this change, a number of major label recording artists have begun recording sound bites to sell for the new market. Madonna, for instance, has recorded an innuendo-laden version of AOL's "You've Got Mail!" under the title "You've Got Male."

Most record labels, however, aim to sell computer users access to song snippets based on songs that are probably already in their CD collections. "It worked for the telecom guys, so why not for us?" said Darby Biscuitt, a VP at Sony BMG. "Just because people already own our songs doesn't mean they can't pay for them again."

For the music industry, which attributes recent poor sales to computer users and illegal copying, the shift in how PCs are monetized feels like revenge. "I know a lot of people in the business who are secretly thrilled about this," said Biscuitt.

But before this new approach takes off, users have to be conditioned to accept the more closed computing environment that comes with the Open Freedom Empowerment Initiative. Traditionally, altering the tone produced by an application was a matter of simply replacing the file. Backers of the OFEI suggest that users will benefit from the restrictions they have planned because traditional freedoms are a threat to security, not to mention revenue potential.

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