Just when you thought mobile music personalization applications couldn’t get any more disruptive, along come background tones.
The latest-but surely not last-step in the evolution of such offerings, background tones play during entire conversations between mobile users. Subscribers can choose to assign songs for different calling groups, and can change music in mid-call without interrupting conversation.
While few in the United States have even heard of background tones, the application appears to have legs in India, where technology provider Cellebrum claims that more than 1 million subscribers are paying to listen to music during their conversations. Indian operator Idea Cellular Ltd. charges about 32 cents a month for a subscription, with additional charges for song downloads.
The typical user reportedly buys two or three clips a month, and some of the most popular downloads among Indian users reportedly are religious chants and faith-based messages.
“As seen with dialer (ringback) tones, music has emerged as the primary means of entertainment with mobile users,” Idea Chief Executive Officer Vikram Mehmi said earlier this year. “It would be relevant to say that it has even become the signature of the user, one that he is identified with.”
Like ringback tones-music that a caller hears instead of a traditional ring before the person being called answers the phone-background tones are network-based, allowing carriers to track usage and control content. And, like background tones, ringbacks gained early traction in India: Indian operator Airtel in 2004 said it reached 1 million subscribers within five months after launching its ringback service.
Asian carriers have reported impressive uptake of ringback tones, also, with some operators claiming increased average revenue per user of up to $2.44 a month.
Verizon Wireless became the first major U.S. operator to launch ringback tones, offering the service in a handful of markets in November 2004 and rolling it out nationwide in the next six months. T-Mobile USA Inc. quickly followed with its CallerTunes in December 2004; Cingular Wireless L.L.C. has since launched Answer Tones and Sprint Nextel Corp. finally joined the bandwagon earlier this year with Call Tones.
And while the service has yet to catch fire in the United States, it appears ringbacks are steadily gaining traction. Roughly 5.7 million U.S. subscribers used ringback tones in June, according to M:Metrics, while only 4.8 million users downloaded a mobile game the previous month.
“Ringbacks are the big sleeper in the market,” said Seamus McAteer, senior analyst for the Seattle-based mobile data consumption measurement firm. “We have yet to reach the takeoff point, but when it happens-at some stage in the next year-these will become the real focus for labels and owners.”
Of course, ringback usage pales in comparison to other applications. About half as many subscribers use ringbacks as those sending instant messages, according to M:Metrics, and users are three times more likely to purchase a ringtone than a ringback tone.
Unlike ringtones, though, ringbacks face an uphill climb when it comes to viral marketing. Countless users could be introduced to ringtones simply by being in the same room as a ringing phone, while only the caller ever hears a ringback tone. And users who hear a ringback for the first time may not recognize the application, believing a network error has occurred or that they’ve dialed the wrong number-a problem Verizon Wireless has sought to address by offering an “introduction” that tells callers to enjoy the music until the other line is answered.
From a revenue standpoint, however, ringbacks are attractive to carriers. Offerings often require a monthly subscription as well as per-song fees, and users can buy any number of songs, assigning a love song to a spouse, for instance, and a college fight song to a former classmate. And because the service is network-based-unlike ringtones, which are handset-based-operators can serve as the lone vendor for their subscribers, shutting out direct-to-consumer content providers entirely.
Most analysts agree the window for ringtone revenues is closing quickly as users learn how to make their own music clips. So operators are beginning to include ringbacks in their marketing efforts, often teaming with high-profile performance artists to promote the spectrum of mobile entertainment offerings.
And it appears consumers are responding. While ringbacks haven’t experienced the overnight success ringtones enjoyed, revenues from the application could steadily increase for years.
“Ringbacks could eventually be a more substantial moneymaker than ringtones,” M:Metrics’ McAteer said, “as they yield nice sustainable, repeatable revenue for operators and rights owners.”
