Ringtones still netting $2.1bn for music biz
Bigger than subs, small than sales
Gartner's latest figures on the digital music industry show that downloads are growing, but while subscriptions are minimal, ring and ring-back tones are still netting $2.1bn, to general surprise.
Gartner reckons online music revenue till top $6.3bn in 2011, which compares to the $15bn or so spent on physical media (CDs and LPs), but it’s the figures for "personalisation services" which have caught the eye as that pegs the ringtone, and ring-back tone, business as being worth $2.1bn in 2011, compared to downloads which topped $3.6bn and subscription services at just over half a billion.
The personalisation figure is expected to $1.4bn by 2015 as the ringtone market dries up, but the numbers have AllThings D in apoplectic shock as it tries, and fails, to imagine who would be so backward as to download a ringtone these days, while completely ignoring the fact that the vast majority of that money will be coming from ring-back tones instead.
That's because ring-back tones never made it big in America, and hardly exist at all in the UK, but Gartner's figures are global and lump together both technologies, at which point the figures start to make a lot more sense.
Ring-back tones replace the ringing tone a caller hears with a music track selected by the called party. They're perfect for the network operator that controls the experience entirely, and can charge a monthly subscription rather than relying on a one-off sale. Ring-back tones work on all models of phone, as it's just an audio stream, and fulfil the important attribute of impressing one's peers without one having to deliberately draw attention (assuming one's peers are impressed by this kind of thing).
They are hugely popular in just about all the world except Europe and the USA, and operators enhance the offerings with caller-specific ring-back tones (our tune for your loved one, "get the gimp out of the box" for one's underlings, and so forth). Some even allow one to vary the ring-back tone by time of day or status, allowing callers to hear if one is at work or home before the call is answered.
That's not to say that ringtones aren't still selling, particularly in developing markets where phones aren't so smart and desktop computers (often needed to capture and install tones) are less prevalent. And let's not forget those who just want a funny tone, and are prepared to pay less than a pound to avoid learning how to install it manually.
T-Mobile did manage a half-hearted launch of ring-back tones in the UK, but never pushed it as a service. The other operators didn't even manage that, and now point to T-Mobile's low take-up as proof that no one wants it (rather than proof of T-Mobile's inability to market the concept).
Self-made ringtones will eventually destroy the market for sales, but ring-back tones will remain as long as people have to wait for a call to be answered, and we've not even started on the unexploited potential for ring-back tones for video calls. ®