The Ringtone Industry

RINGTONE INDUSTRY

Probably here in India, in 2013, ringtones may seem like a distant memory but it is far from dead. There are still many people buying ringtones, and following are the reasons why:

·        1. Smart phones are less in quantity.

·         2. People want unique and personalized ringtones

·         3. Music piracy is a criminal offence in many nations

·         4. Buying  a ringtone is easier than creating one

The ringtone business is still worth $2 billion. The ringtone industry, listed as "Personalization Services" makes up a big part of online music revenue worldwide. The ringtone companies make roughly 4x more money than subscription services like Spotify and Rhapsody.

Below figures show a few facts and projections about the ringtone industry

Source: www.MusicProductionSchools.Net

 

BUSINESS MODEL

KEY PARTNERS	KEY ACTIVITIES	VALUE PROPOSITION	CUSTOMER RELATIONSHIP	CUSTOMER SEGMENTS
Telco Operators - Music Labels - Ad Companies for pushing ads	- Building a website/software to work with all phones - Appropriate deals with Music labels - Work with Telco Operators - Creating required marketing/publicity for the website - Deals with ad companies	-- Provide an online service to push/download ringtones to a Phone - No Internet Connectivity Required on Phone (enable this for all kinds of phone) - You can upload any of your fav song and push it to your phone - Provide some standard ringtones by having a partnership with music labels/Telco operators Top of Form Bottom of Form	- Take feedback on the website to continuously improve the service	- Consumers who are interested in changing their default tone (essentially any mobile user)
	KEY RESOURCES		CHANNELS
	- Web Site and Software - Tons/Thousands of Ringtones - Contracts with Telco operators for pushing ringtones - Employees for maintaining this/support and Office setup		- Web Sites - Telco Operators - Advertising (Email, Web, TV, Radio)
COST STRUCTURE		REVENUE STREAMS
- Web Site Building/Operating Expenses - Buying ringtones from music labels - Employee/Office setup and operating expenses		Multiple Models: - First 2 ring tones to a number are free and sub sequent will be charged - Ad Based model, for every ring tone couple of Ad SMS messages will be delivered to the consumer -  Portal/Web Site Model where ringtones bought/uploaded for pushing will have advertisements as well

 

 

MARKET ANALYSIS

The ringtone market features competition between mobile phone service providers, mobile phone hardware suppliers, record labels and third parties such as Napster and Jamster. Several record companies sell ringtones of their bands on their sites.

 If we compare the ringtone market it shows drastic variations. In Europe, many mobile networks provide their own ringtone services (typically on a 'per download' basis) while the Japanese market is dominated by third party content providers and many ringtones are downloaded directly from the particular provider's site (with a fee being charged to the consumer's phone account. Japanese consumers have moved to a subscription based mechanism, with the consumer paying a set monthly fee to download ringtones on a regular basis.

In India according to Soundbuzz India, mobile music downloads in the domestic market in around 2005 was valued at Rs.160-180 crore (Rs.1.6-1.8 billion). About 400,000-500,000 ringtones were downloaded daily. Mono and polyphonic ringtones were sold at a 75/25 ratio, while the fastest-growing ringtone genre was ringback tones with about 3.5 million users.

 

The Future of Ringtone Industry

With the government regulations getting stricter for piracy, it will always be beneficial for the customers to opt for purchasing ringtones rather than creating one on their own. The accessibility for ringtones should be made on a rental basis, something similar to the business model of caller tunes. This will make ringtones available at inexpensive costs and will attract customers to go for purchasing ringtones for a specified number of days rather than paying a larger amount for buying the ringtone. Those looking for variety as well as uniqueness, will get both the values in a ringtone at easily available prices.

 

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Regards,
Vidisha Sharma,
Alumni Relationship Committee,
Institute of Management Technology - Ghaziabad,
+91 78380 12667