In the News
CTIA PREVIEW: MOBILE MUSIC BEYOND THE RINGTONE
Date:
Billboard
Headed into the year's largest wireless trade show -- |
the CTIA Wireless 2006 conference April 5-7 in Las Vegas --
the question on everybody's minds is now,"What's next?"
Ringtones -- the workhorse mobile entertainment application to date -- are beginning to show signs of age.
U.S. revenue generated from ringtones has skyrocketed in recent years, more than tripling from $68 million in 2003 to $245 million in 2004, and then doubling to $500 million in 2005. But those days are over as 2006 is expected to show a 20% growth rate to $600 million, according to projections released by BMI.
"We've hit a bit of a saturation point,"BMI VP of business development Richard Conlon says."Ringtones have done well by all of us, but we can't expect they're going to be the marquee offering in mobile entertainment going forward."
Master ringtones, while growing in popularity, are not the answer. Last June, only 25% of ringtones purchased were master recordings. That grew to 44% in December. But master ringtones are merely a format change, not a driver, and cannot sustain the growth rate of prior years alone.
"There is just a natural cap on the number of people who buy a ringtone in a given month,"says Mark Donovan of mobile tracking firm M:Metrics, citing company research that shows only 10% of U.S. wireless subscribers download a ringtone each month.
This maturing of early mobile entertainment products is not limited to ringtones either. Mobile media aggregators have cited a significant decrease in the number of wallpaper images and graphics sold in all categories, music and otherwise.
For aggregators, the fallout has already begun. Dwango, which recently changed its name to Dijji, says it is exploring selling or liquidating the company despite scoring such clients as Playboy, Rolling Stone and Napster.
For the music industry, the heat is on to support new mobile music services.
"What we need is a different product,"Conlon says, pointing to ringback tones, subscription radio services, full-song downloads and live music services."The mobile entertainment market can't be a one-trick pony, and this ringtone pony is a little tired right now."
At CTIA, several companies will be answering that call.
Sennari, focused on the mobile videogame market to date, will unveil a mobile music service called Mobile Tunes at Billboard's pre-CTIA mobile entertainment conference, MECCA. Like a mobile version of Purevolume.com -- a social networking site for artists -- Mobile Tunes allows labels, managers and artists to create mobile blogs, photos, streaming clips, tour information, video samples and to even sell content. Users can also send links to streaming clips or concert tickets via text messaging.
Motorola is expected to unveil more details about its iRadio service, potentially announcing content partnerships with more record labels. Of the four majors, only Universal Music Group and Warner Music Group have signed on. iRadio is a subscription music service operated by Motorola that uses the mobile phone to stream music through the home and the automobile.
Verizon Wireless will announce a major expansion of its full-song download music service. At launch, the company had 500,000 songs in the VCast Music library, but says it intends to build that to 1 million by spring.
Just prior to the show, U.K.-based mBlox announced plans to introduce a full-song download service independent of wireless carriers. This allows labels to directly sell music to consumers, sidestepping the carrier. Only Ministry of Sound and V2 have licensed music for the service -- limited to London's Vodafone network -- at this time. mBlox is expected to unveil further details at CTIA. ****
