As ringtone revenues descend and full-track mobile music services spin their tires, ringback tones are quietly gaining steam. But they may not be quiet much longer.
Ringbacks-audio content that a caller hears instead of a traditional ring before the person being called answers the phone-first appeared in the United States more than three years ago, when Verizon Wireless and First Southern of Illinois began offering the clips to users.
The application has failed to duplicate the hockey-stick uptake ringtones enjoyed several years ago, due largely to the fact that only the caller hears a ringback tone, while ringtones could be introduced to a roomful of users with a single ring.
Gaining ground
The offering seems to be gaining ground, however. The number of U.S. ringback subscribers tripled last year, according to M:Metrics, and a recent study from J.D. Power and Associates found that 9% of U.S. mobile consumers used the application-slightly more than those who used instant messaging or accessed the Web from their handsets. And IDC predicts the slow-but-steady curve will continue, with 40 million worldwide users subscribing to ringback tones by 2010.
“In North America, which happens to be a really good market for us, 10.8 million people are using ringbacks today,” said John Orlando, VP of marketing for NMS Communications’ new LiveWire Mobile, which sells ringback services to carriers. “Places like Spain are north of 10% penetration, India is near 40%, and markets like Korea have stabilized around 60%.”
Proof in the pudding
The ringback space continued to gain traction last week with two new partnerships. 9 Squared, a Denver-based mobile music company, unveiled an exclusive deal to offer clips from independent music firm KOCH Entertainment. The Zed Group subsidiary said it secured rights to distribute ringbacks from KOCH’s portfolio to its carrier customers including AT&T Mobility, Alltel Corp. and Leap Wireless International Inc.’s Cricket Communications subsidiary.
And Comverse Inc. said it will team with Jamba to power an off-deck ringback service for T-Mobile Germany using its Fun Broker service, which allows content providers to sell wares directly through their portals. T-Mobile hopes to leverage Jamba’s content library and distribution channels without having to pour resources into marketing the content.
“Operators have too much to do already to successfully take on the entire burden of constant promotion of ringback tones,” said Jamba CEO Lee Fenton.
NMS earlier this month launched LiveWire in an effort to differentiate its mobile personalization services. The company powers ringbacks for Cricket, Canadian operator Rogers Wireless and several Vodafone Group plc properties, among other carriers, and hopes to build on its success by adding personalized messaging offerings such as talking avatars.
Ringback ads
But the company also plans to expand its ringback offerings to include advertisements. A subscriber could opt to force his friends to listen to a message from a soda company, for instance, instead of the traditional ring when they call. In return, that subscriber could get free minutes or discounts on mobile content, and the operator could pocket the ad revenue.
That subscriber, of course, is also likely to annoy his friends if the advertisement is seen as intrusive or is used continuously. Which is why some parameters will need to be set before carriers start deploying ringback ads, Orlando said.
“Unlike ringtones, that 20 seconds of audio (before a person answers the phone) is just sitting there. It’s very fluid, and a subscriber could choose” which messages callers would hear, Orlando explained. “It may not be that an ad is heard every time, it may be that it’s cycled in and out. Those are some of the rules that will have to be established.”
