We All Knew Ringtone Sales Were Falling, But Drop Is Getting Bigger

U.S. ringtone sales dropped so much last year it caused the entire mobile music category to record its first ever decline.

Considering that mobile is still a relatively new industry, music is now the first mobile content category to have ever experienced an annual decline, according to research firm SNL Kagan, which also tracks video and games. In 2008, ringtone sales shrank 24 percent to $541 million from $714 million in the year ago period. Now ringtones make up only 63 percent of the overall mobile music market, whereas in 2007, ringtone sales made up to 80 percent of the market.

However, not all is lost as full-track downloads and ringback tones continue to grow. SNL Kagan estimated that revenues from ringback tones totaled $199 million in 2008, increasing from $176 million in 2007.