Bell tolls for ringtones?

29 Jan 2004

The worldwide market for mobile ringtones has peaked and is set to decline by 50pc over the next four years, but digital music will continue its move to the mobile space, a new study from Juniper Research has said.

Having accounted for close to US$1bn last year, the ringtone market will be worth just US$490m by 2008, the industry watcher has forecast. Digital music on the other hand is predicted to generate revenues of close to US$560m in 2008.

Whereas the ringtone market is showing signs of “saturation and weakness”, according to Juniper, the firm said that its projections for the digital music market are conservative estimates.

Several hurdles still stand in the way of digital music truly going mobile. Juniper suggested that users will continue to download music using fast internet connections to their home PCs, updating their mobile devices locally. Issues around copyright, licensing and distribution have yet to be resolved and obstacles still remain around security and rights management.

According to Juniper’s analysis, overcoming internet pirates will be critical; encryption and digital rights management are still at the top of the agenda.

Positioning and pricing new mobile music services will hinge on understanding consumer behaviour and attitudes, the firm said. Lastly, any opportunity for the music sector is directly linked to the number of capable devices and networks available.

Paul Skeldon, senior analyst at Juniper Research, said: “The ringtone market is already showing signs of being a passing fad, and in many social groups it is already considered ‘naff’ and annoying. The use of the mobile channel to distribute master recordings of music is however one that is being eyed with considerable interest by both the mobile and music industries. While the use of the mobile channel as a top-up medium for portable MP3 players is one aspect, there is growing interest in using mobile as a way of selling music promo material to encourage the purchase of more traditional ‘hard copy’ music.”

By Gordon Smith