- Typically an artiste or record company will receive between 30% and 40% of the net revenue paid by the customer for a ringtone. However, Phone Sherpa deduct the operator fee first, then pay out 25%-50%, meaning only 14%-30% is paid out in comparable terms.
- Of most concern to EU artistes is the fact Phone Sherpa do not pay publishing and place the emphasis on to the artiste, contrary to current EU law (bare in mind Phone Sherpa are a US company where this is legal). To illustrate, let's say you record a version of a Beatles song. You upload the track to Phone Sherpa and receive a payout. However, Lennon & McCartney are also entitled to a share of your payout and if you don't pay PRS-MCPS then you could be held liable. Be cautious!!
- I'm also unsure how artiste copyright is protected since the only thing preventing people making money selling Robbie ringtones is by assuming users have read the legal terms and conditions which state the content must be owned by the person uploading it - like that's gonna work!
If these issues can be overcome then we see tremendous potential in Phone Sherpa since it puts bands and labels in direct control of their mobile content without the need for a middleman. btw, do not buy the ringtone below- it's only for demo.