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March 15, 2005
Carriers do not want be left out of iTunes revenue split
Karen Haslam has written a great overview article for MacWorld UK regarding the carriers' take on mobile iTunes and their recent stoppage of Motorola unveiling the first iTunes-enabled phone.
"It seems likely that the carriers are expecting to make more of a cut. Subscribers have grown used to paying up to $3 for a ring-tone and the ring-tone market is worth $11 billion worldwide. Cingular Wireless' chief technology officer Kris Rhine explains: "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."
Quite simply, the carriers do not want to be left out of the revenue stream. Haslam mentions the "imaging" point, where carriers are not making very much revenue off camera phones, and that this is the reason they do not want to be left out the iTunes pie. this will be an ongoing tug-of-war, since the carriers hold so many of the cards, yet they cannot function without handset manufacturers, content providers and what could be considered a value-add service like iTunes.
Posted by Michael Amin at March 15, 2005 11:26 AM
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