KPMG sees problems ahead for ringtone market

Stuart Corner
Saturday, 10 September 2005 16:28

IT Industry - Deals

A paper prepared by KPMG for its clients warns that revenue leakage - where systems fail to capture the number of downloads at some point of the delivery chain - is a major issue for the rapidly growing, multimillion dollar ringtone market. "Our experience in Australia and overseas indicates that roughly 75 percent of all self-reported statements from content and platform owners are incorrect, with errors of up to 15 percent of reported values," KPMG says, adding that "corporate governance requirements need to be kept in mind and processes need to be strengthened before there is a major dispute between the various players in this space over the revenue sharing arrangements."

The paper says that, in 2003, the Australian ringtone market was worth approximately $50 million but local providers estimate it will be worth $120 million in 2005 as a result of demand which is growing at 18 percent, month on month.