Claudia Poepperl
Phone: +44 795 102 71 55
E-Mail: cpoepperl@qpass.com
Mon, 01.08.2005
pts20050801018 Computer/Telecommunications, Commerce/Services
Pressbox Pressbox
Ringtone Shoplifters Hitting Mobile Music Stores Could Threaten Industry
Qpass study reveals major security hole

Seattle/Vienna (pts018/01.08.2005/11:57) - More than one third of Europe's leading digital content websites are unsecured, allowing users to 'shoplift' music tracks and download them as free ringtones. The extent of the problem in Europe could have already cost the mobile and music industries an estimated Eur 50 million in 2004, and a further projected Eur 336 million in lost revenue by the end of 2007.

The Qpass study examined 100 leading ringtone download sites worldwide comprising 42 mobile carrier portals and 58 online entertainment and music stores. Researchers found that at just over a third of the web sites tested preview music clips could easily be converted into 'shoplifted' ringtones by downloading them onto PCs and transferring them directly onto mobile phones at no charge. Two thirds of web sites offered preview music files between 15 and 30 seconds, which is the perfect length for a ringtone. In some cases sites are ring tone specialists, which are inadvertently giving away their products for free.

The ringtone market currently accounts for 6-10 per cent of music industry revenues making this a significant revenue leakage problem for the industry. More than one-fifth of mobile users worldwide have downloaded content via their phone to date and this figure is expected to rise. Ringtones are amongst the fastest growing content types. For the global music industry, increasingly coming under attack from declining CD and single sales, they have provided an important revenue stream.

"This is the mobile and cyber-equivalent of test-driving a car and then not having to give it back to the garage," said Steve Shivers, Senior Vice President, Corporate Strategy and Development at Qpass. "When the trial is as good as the actual product, why should consumers spend money buying it? It's so simple to shoplift ringtones that even a 12 year old child could do it. But, consumers are not likely to be aware that this ability to gain 'free' ringtones is actually a violation of the music industry's digital rights. Meanwhile the music industry is putting its faith into the mobile industry to ensure its offerings are secured. The amount of revenue loss to both the mobile and music industries is concerning when this appears to be a complete oversight."

Qpass attributes this problem to the need for the mobile and music industries to enable users to preview music before they purchase it, an important part of the customer purchasing experience.
The study of digital rights vulnerabilities on mobile music web stores was conducted as part of the ongoing development of the Qpass Content Delivery Platform, which offers a comprehensive solution for presenting, exploring, delivering and billing mobile content. The Qpass solution enables operators and media companies to provide the important preview listening function securely through the use of Flash technology. While some secure methods require the user to download a plug-in such as Real Player or Quicktime, Macromedia Flash is already pre-installed on 98,3 per cent of computers (Source: Macromedia).

About Qpass
Qpass software powers the marketplace for digital media and services by efficiently managing the entire digital supply chain over any network and any type of device. The Qpass product line includes the Content Delivery Platform and the Service Management Platform. Today this infrastructure powers a digital services marketplace for operators reaching more than 145 million subscribers globally, generating hundreds of millions in revenues. Qpass software works as an overlay to existing business systems including provisioning, billing and CRM, speeding service innovation and providing greater flexibility for new offers.
Qpass customers include mobile operators Cingular Wireless, T-Mobile International (UK, Germany, Austria, The Netherlands and Croatia), Nextel, ALLTEL, Vodafone Ireland, and Boost Mobile; as well as leading consumer portals such as Yahoo! UK and Germany and Fantastic One. Today more than 1000 content partners and aggregators are integrated through Qpass software, providing access to more than 500,000 applications to consumers in the U.S. and Europe. Qpass global headquarters are in Seattle, Wash., with European headquarters in Vienna, Austria. For more information on the company, visit www.qpass.com.

Submitter: Qpass
Contact: Claudia Poepperl
Phone: +44 795 102 71 55
E-Mail: cpoepperl@qpass.com