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Skype Goes With Warner Music For Ringtones and Maybe More

Skype has entered into a deal with Warner Music Group and while the deal is announced as for Ringtones, sources say that last week at MIDEM the talk in the hallways and on the luxury ships in the harbor that it was that it's for more than simply that, with Ringbacktones as likely also as well as the announced artist images. The deal which is global in nature was struck here in the USA and led by the Skype USA team, according to Skype sources.

This is much like what Yahoo has also been planning to integrate into their Voice and IM roll out of the new Yahoo Messenger.

Music industry sources tell me that Warner Music has a strategy in place to go beyond the ringtone and break the .99 cent per download per track approach that has been established largely by Apples iTunes. One of the rumors floating around is that Skype, with their built in Video approach will be able to send snippets of music videos, interviews and live concert footage over their pipe to the end user, and hence the reported $1.50 price point will allow for that, though at the time of writing neither Skype or Warner Music were available to comment. Even the $1.50 price point, as first reported in the Wall Street Journal is only now being confirmed. Other industry sources beleive the agreement with Skype is non-exclusive (why would it be) and that more partnerships of this type are likely.

This all makes total sense as the music industry insiders have known for some time Warner Music Group wants to be in the bundling of content business, not just sell tracks or tones on the one off, as a differentiator. Steve Jobs' Apple iTunes has been viewed in that world as being too inexpensive so by offering the full catalog and in a bundle, Skype could help drive those price points up. Since the content is already in house or can be in house, the label repurposes and makes money off of digital assets that have been sitting around. Lastly, for archived content this is a boon, as it means back catalog, one of the reasons why punters download around the world, becomes more desired by the consumer, something the labels have struggled with when it comes to the digital world. Out of print tracks become more easily available.

Questions posed to Skype about what format the content will be stored in, how it will be DRM'd (digitally rights managed), if the downloads or services are user or device specific, if users can swap digital assets (now wouldn't that fit into an eBay auction model with file sharing already in Skype) remain unclear as this is being viewed as a deal announcement, so no specifics were available, but other sources very close to the relationship have intimated that Skype will use their own proprietary DRM solution, likely derived from their current Skype Voice Mail code base, which only allows for Skype messages to be played from within Skype.

If they are using their own DRM, does the world really need one more. One thing I have learned is that the digital rights are account or user based, making the concept of portability by a user more important than a single end point.

But if the above is on target, Skype as a Pipe keeps coming more and more to fruition.

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