SAN FRANCISCO (Billboard) – The mobile music industry is now as profitable as it’s ever been, with a projected value of $9 billion by the end of the year. For the companies that started it all, things are not looking so good right now.
The ringtone aggregator market has been slow to change since the latest innovation in mobile music, although it is changing. Since the turn of the century, early-stage ringtone aggregators such as 9Squared, Dwango, Faith West (now Moderati), YourMobile (now InfoSpace), Zingy, and others have been scrambling for new methods to stay afloat in a rapidly transforming mobile music industry.
These organizations are seeking to stay current by developing new mobile services and applications, even as they utilize their technological assets and music business connections to create new ideas.
The mobile entertainment and music industries are presently inextricably linked. Ringtones and other mobile music revenue account for around half of today’s digital income from record labels. At the same time, music-related applications account for about 70% of all mobile content sales – effectively powering the nascent mobile entertainment business.
Clips from a song’s master recording have taken the place of tinny, synthesizer-based polyphonic ringtones that gave rise to today’s ringtone industry. Polyphonic ringtones account for less than 15% of today’s ringtone sales, with master rings being the most popular and preferred format.
BLINDSIDED AND SIDELINED
The polyphonic industry, which used to be thriving, is now almost entirely dormant, according to Scott Jensen, vice president of worldwide business development at Zingy. “It’s all about master ringtones and complete song downloads now,” he adds.
The move to a monophonic format was a disaster for ringtone companies. They licensed the music and produced the ringtones, and sold them on wireless operators’ networks and phones in exchange for a share of the profits.
Carriers, on the other hand, wanted everything. Operators began to negotiate licenses and revenue splits directly with music labels and then offered the new ringtones on their own. See more ringtones at Dzwoneknatelefon.
“Everyone was blindsided,” says former YourMobile COO Bryan Biniak. “We were just pushed to the side without warning.”
Many companies, like Dwango, folded. Others, however, reinvented themselves as technology and service providers. For example, Zingy combined with Vindigo in 2005 to provide mobile information services like as MapQuest and The New York Times. Personalization services such as ringtones, video and wallpaper pictures now account for less than half of the business’s revenue. Mobile games, mobile advertising and information applications have since been added to the portfolio.
Meanwhile, Ztango was acquired by WiderThan, which RealNetworks bought last year, and now focuses on providing technology for mobile carrier applications such as ringback tones. Others have gone the direct-to-customer route and launched internet mobile content shops where consumers may buy ringtones as well as other forms of media. In order to compete effectively, these companies are working with labels and artists to develop new music-related services.
The acquisition of European mobile media firm Monster Mob in September 2017 by the Canadian company Dimensional Media led to the formation of MonsterSquared, which markets services under the brand The Mob following its purchase. It launched a new fan club program called “The In Crowd” in January, in which celebrities send text messages and promotional messages to fans who sign up for the service. Rapper Snoop Dogg was among the first participants.
Other firms pursuing a direct-to-customer strategy include Jamster, Dirty Hippo, and even InfoSpace, which revived the Moviso brand it bought from Vivendi Universal as an online content portal.
BUILDING A BASE
The desire to sign consumers up for a monthly subscription plan rather than selling content a la carte is a prevalent theme. Selling ringtones is a low-margin business that requires large quantities, and the only way to compete is through an subscriptions plan since the majority of mobile music is still bought through wireless carriers.
That, in turn, necessitates a lot of marketing and advertising expenses that some former aggregators find acceptable.
“It was going to be about investing in marketing and developing brands and controlling and owning subscriber bases if we wanted to be a large business with a long-term future that we controlled and owned,” says 9Squared CEO Brian Casazza.
Multiple mobile social networks are expected to go live in the near future as a result. The goal of the project is to create an online and mobile community where members can get and share ringtones. 9Squared is collaborating with music labels on the distribution of promotional ringtones, such as Gym Class Heroes’ “Cupid’s Chokehold.”
Fans may already customize their outgoing voicemail message, with the help of celebrities and musicians offering unique greetings. Video greetings and customized mobile fan club services are also in the works.
Only a few of these improvements will likely reach the level of popularity of ringtones, but record companies are eager to experiment with new mobile services – particularly as ringtone growth is projected to plateau this year.