At least, that’s what industry watcher Mark Mulligan suggests. He explains:
A key (though not the only) reason for ring tone providers like Jamster (the home of Crazy Frog) churning out the likes of Cray Frog, Nessie and Sweety is because of the size of the license fees being commanded by record labels for true tones. The result is that mobile content providers seek out content which they can own and therefore take a much larger share of the pie. Hence the great irony that the net result of this process is that the labels end up paying for the rights to ring tone content.
Will the labels start being less demanding with their license fees? There is a risk that if they don’t, what was a booming revenue stream for them will become the near exclusive domain of animated crooning animals.