Ringtones Sales Coming To End Of Their Crescendo
Global ringtone sales have peaked (well, they had to some time) but within that there are bigger winners and losers than everyone simply stopping growing across the board. In general, Jupiter Research puts the ringtone share of the overall mobile content market in Europe at 29 percent, down from 33 percent last year…the European ringtone market is expected to be about $1.1 billion this year, a 10 percent increase on 2006. In emerging markets ringtone sales are still growing, but in mature markets they’re falling off. M:Metrics reports that in Britain, France, Germany, Spain and Italy “the percentage of mobile phone subscribers buying a ringtone in an average month has fallen consistently over the past 12 months, to a low of 3.4 percent in Britain in October. In the United States, it was 9.3 percent, higher than the 9.0 percent of last October but below its January 2007 peak of 10.0 percent” reports the International Herald Tribune.
More dramatically, the structure of the ringtone market is changing to be less amenable to ringtone aggregators. The IHT cites reasons such as the rise of handsets and services which lets people create ringtones out of the songs they’ve purchased, digital music stores selling ringtones and the rise of video ringtones and mastertones, which sell for the same price but requires royalties to the record labels. It misses one of the biggest — moves by the industry to stamp out irresponsible subscription practices. Even if ringtone sales do fall off over the next few years, but there’ll always be a group of people who regularly buy ringtones, either to change the one they have or to link different ringtones to different people in their address book.
The outcome of this research can hardly be a surprise to anyone with some knowledge of the mobile industry.
My personal opinion.
Since the rather destructive and expensive (yet high margin) subscription model entered the mobile market, it was nothing more than a matter of time untill too many consumers with a bad user experience would turn there backs on ringtone providers. You can fool some people sometime, but you can't fool all the people all the time.
For sure the growing market share of mp3 phones have speed up the process. But the process has been in motion for a while now. And with the process I mean the marketing tactics to "over promise", "over charge" and "under deliver", leading to disillusioned consumers who never buy a ringtone again.
Nevertheless the ringtone industry remains a large industry with a lot of potential. If only those who have to power to change are open to look for other fair ways to let consumers enjoy ringtones on their mobile phones.
Len
note: my comment is nothing more (nor less) than a personal view on the situation in the industry.
To judge my comment, I do want you to know that I am currently working for NAKKO a online service that offers free mobile content.
I agree with the view that the ringtone industry still has a lot of potential. But if I may make (very respectfully) one comment/question to Len on NAKKO: Free content is, well, not a new concept for sure . Is your 'business model' based on advertising? If so, I have one basic question, how many impressions and at what CPM do you need to sell to make the equivalent of ONE download sold at $1.99 (minus a – say 40 % carrier fee)? Quite a lot, isn't it? More than you will ever get from even your most frequent user.
Sure, let's give for free what people are willing to pay for.
MR