Ringtones are Down, Ringbacks are Up

Image by Edward Barnieh [back in a few days!] via Flickr

Let's admit it: ringtones aren't such a hit here as it is in other parts of the world. What we want is a normal message alert and a normal ringing phone. Putting in the latest music as a ringtone isn't really that important and sometimes it just gets downright irritating, isn't it? There's been a study made by the folks from SNL Kagan showing just how much the ringtone market is shrinking:

Ringtone sales declined 24% in 2008 versus 2007, from $714 million to $541 million, causing overall U.S. mobile music revenues to post an annual decline -- a first for a U.S. mobile content category. Ringtones' share of the total U.S. mobile music market fell from 80% in 2005 to 63% in 2008.

Maybe it's the recession? I would rather find a job than subscribe to a ringtone, yes? Or maybe that people have finally gotten tired of the whole ringtone business as changing it to the latest music has become an expensive chore.

The music and mobile industry doesn't have to quake in their boots due to such an alarming reduction in profits as ringbacks, music played while you're waiting for the other party to pick up your call, has risen.

So what's the next revenue generator for mobile music? "When we ask mobile music insiders what will replace ringtone revenues, RBTs (ringback tones) are most often mentioned," said SNL Kagan wireless analyst John Fletcher. "We estimate this category grew at a 37% CAGR from 2005 to 2008, from $77 million to $199 million."

Ringbacks for ringtones? Less irritating as everyone in the room doesn't have to listen to it.

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