Beyonce, “Baby Boy”
By the end of 2003, the music industry was up against the ropes. After years of explosive growth, the business was in a steep contraction. In the U.S., sales of compact discs-a $13.2 billion business in 2000-would finish the year generating just $11.2 billion in revenue, a 15% drop, and the format’s third straight year of shrinking sales.
But there was one positive note: sales of ringtones and ring masters. Though the RIAA didn’t start tracking these “mobile” music sales until 2005, by the end of 2003, ringtones-snippets of songs that are downloaded to mobile handsets at about $2 a pop-were fast becoming a big business. For Beyonce, who was riding the success of her debut album Dangerously In Love, ringtones were becoming a really big business. Her second single, “Baby Boy,” spent nine weeks at the top of Billboard’s Hot 100 list and, by our calculations, was the first song to sell more than one million ringtones. (The RIAA didn’t officially certify any ringtones until 2006.)
By the end of 2005, the so-called mobile business was bringing in $422 million in the U.S. alone, and hip hop represented the lion’s share of the business. Rappers such as 50 Cent, (who won Billboard’s first “Ringtone of the Year” award in 2004), Chamillionaire, Lil Flip and Young Jeezy were all among the early platinum ringtone sellers. One of the rare non-rappers in the top tier: AC/DC, whose “Back in Black,” the title song from the band’s 1980 album, achieved platinum status in 2006.
But for all of the wild projections for the ringtone business-one early forecast predicted global ringtone revenue would $4 billion in 2004-there are clear signs that it is cooling off. After posting an 84 percent increase in U.S. sales in 2006, mobile music revenue was up only 14 percent in 2007, to $879 million. Stars like Beyonce will now need to find new outlets to ring in the dollars.