November 21, 2005
The Ringtone Riddle
How ringtones' success has led labels to the verge of a misstep on music pricing. By Jason Fry for the WSJ.
... "Both in numbers and buzz, ringtones are a big deal now. According to the Yankee Group, ringtones will probably be a $500 million business in the U.S. this year and a multibillion-dollar business globally. That makes them the third most-popular wireless application behind talk and text-messaging.
Ringtones are meant for showing off in public-- in fact, they're more for other people's benefit than for yours, allowing folks to identify you as an adherent of 50 Cent or Fall Out Boy or the whole Crazy Frog meme. And the public nature of ringtones means people are much fussier about having the right one, having it sound good and being able to change it the second they feel it no longer represents them -- all things that command a premium price. Downloaded music, on the other hand, isn't principally meant for public broadcast -- music players have headphones for a reason."
"Aside from the fact that they're built on music, they really have very little to do with one another," says Charles Golvin of Forrester Research. As the Yankee Group's Michael Goodman puts it succinctly, "ringtones are about personalization. Music downloads are about entertainment."
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