Judge: Ringtones aren't public performances

By Eriq Gardner

Weren't cellphone ringtones supposed to rescue the music industry?

Consumers seemed willing to pay $3 or higher for a 15-second snippet of a song when, amazingly, it only cost 99 cents to purchase the full-length version on iTunes.

Ringtones, some argued, were incredibly popular because consumers saw them as fashion statements. Since cellphone users were exploiting songs this way, performance rights organizations like ASCAP and BMI came to the table demanding royalties from the "public performance" of a song. Earlier this year, Verizon challenged this assessment by filing a lawsuit in New York District Court.

Yesterday, the court quashed ASCAP's argument, ruling that "when a ringtone plays on a cellular telephone, even when that occurs in public, the user is exempt from copyright liability, and Verizon is not liable either secondarily or directly." 

Here's the decision.

If the ruling means that the price of ringtones won't be going up again, this probably is a good thing for much of the industry. The ringtone market has crashed mightily in the past year. According to Nielsen RingScan, sales of ringtones and ringbacks fell almost 23 percent last year, from more than $700 million in revenue to less than $550 million.