Whatever happened to the ringtone?
Mobile audio products brought in only $167M last year
Rebecca May couldn't resist.
When she got her first cellphone about a decade ago, one of the first things she did was go to her service provider's website and stock up on ringtones.
"I think I downloaded about 10 of them, and at that point they were $5 or $6 each," May, now 22, recalls of her adolescent shopping spree. "And then my dad got the phone bill."
At the time, the expense seemed worth it to have access to fresh music on her phone.
"When new songs came out, I would download them ... whatever was popular at the time," she told CNN. And yet, "the majority of the ones I downloaded, I never really used. I remember listening to them, but I don't remember using them, because most of the time I was in school or work."
But by about 2009, May lost interest in buying ringtones altogether. And she wasn't the only one. May's personal experience mirrors what has been a sharp decline in ringtone sales over the last half-decade.
In the early- to mid-2000s, the ability to play a customized sound for incoming calls -- usually a blaring few seconds of a favorite song called a "mastertone" -- was a fun novelty for people buying their first cellphones. Ringtones became an aural fashion accessory, as people scrambled to personalize their phones with the newest or coolest tunes.
Mastertones mimicked the clarity of what one could hear on the radio, making the ringtone an easy and addictive way to hear snippets of one's favorite music. People also could assign different ringtones to different callers -- say, "Take This Job and Shove It" when your boss calls, ha ha -- as a sonic form of Caller ID.
At the same time, much was made of the millions of dollars ringtone sales brought to a grateful music industry that was struggling to adapt to the digital age.
"It's the evolution of the consumption of music ... I remember looking at forecasts back in 2005 and 2006 that kind of touted ringtones as the savior of the industry, because it was revenue that was really growing from nothing," said David Bakula, senior vice president of client relations and analytics for Nielsen Entertainment.
"It was a great barometer of how people were starting to live around entertainment on their phones," he said. "Ringtones were a really big part of that."
Ringtones were popular in part because they were one of the first audio products you could access over your mobile phone, said Richard Conlon, senior vice president of corporate strategy, communications and new media for Broadcast Music Inc., the music-licensing organization.
"There was an enormous novelty phase associated with ringtones, and our hope was in the '04, '05, '06 period, when things were still climbing, that we would see (ringtones) be a gateway product," he said. "We saw the market grow from $68 million retail in the U.S. in '03 to about $600 million in '06."
In 2006, the RIAA instituted the first awards system for ringtone sales. Lil Wayne's "Lollipop" earned the distinction of being the biggest-selling ringtone ever in 2009, going five times platinum.
But then the sales dipped. Despite the enormous growth of smartphones, mobile audio products such as ringtones and ringbacks (which is a song that plays while a caller's waiting for an answer) brought in only $167 million last year.
So what happened?
Two things: The novelty of the musical snippets wore off. And we learned how to make custom ringtones for free.
Musical ringtones could be costly. Consumers who wanted to both own a song in its entirety and have the song play as their ringtone had to make two separate purchases. Costs for ringtones varied, but the 20- to 30-second snippets were often pricier than buying the whole song. Someone who updated their ringtones frequently could easily pay $20 a month or more.
But with the rise of audio-editing software and free Web programs dedicated to making ringtones, users could easily manipulate sound files to create their own custom ringtones from songs they already owned.
And as smartphones evolved, with their enticing menu of video, games, music and Facebooking, suddenly ringtones didn't seem so exciting anymore.
"The availability of so many other things on your phone takes the focus a little bit away from some of the things that were big before," said Bakula of Nielsen. "These different ways consumers want instant, on-demand access to an unlimited number of titles has really changed the model in nearly every entertainment category that we track. What you see one day, or one year, might be completely opposite the next year. And that was the thing with ringtones."
There's another factor at play, too. Surveys have shown that as text-messaging has grown in popularity, especially among younger users, people don't make calls as often. So ringtones are less of a priority.
Cellphone users may not think about them as much, but the gradual decline of the once-lucrative ringtone has been bittersweet for people in the music industry.
"Admittedly, it was a little sad," said BMI's Conlon. "In BMI's early digital days, we made more money from ringtones than anything else; it accounted for more than half of our income stream. And now when you think about it, it's basically zero."
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