Ringtones on the decline

Thomas Husson | January 04, 2008, 05:10 AM

This is always quite funny to see how a press interview is being picked up. My colleague Mark Mulligan initially gave an interview mid-December to the International Herald Tribune / New York Times about the maturation of the ringtone business.

I found out recently many new articles on various websites, newsletters or newspapers that simply picked up partial quotes or misused numbers. The initial article mentionned that some analyst firms were even predicting the ringtone market would reach 11bn $ by 2010. Jupiter Research never ever published such a number and I think the reason why we have been quoted here is because we have been more realistic than others. I am not saying we did not over-estimated the market in the past. We did. Particularly for ring-back tones. However, our latest forecast for ringtones only in Western Europe was 917M euros in 2007 down to 910M euros in 2011.

Several players have encountered a stronger decline in 2007 (see this article in Les Echos). We will clearly take this into account for our forthcoming forecast. Noboby has a crystal ball and predictions are a tough and complex job, but please look at our competitors' bullish numbers first before saying how wrong we were.

I think we were right to identify the following trends (this is a copy and paste of our latest EUM forecast report):

"JupiterResearch has significantly tempered its ring tones projections due to the following:

• Prices have declined
• Attempts to reach relatively older demographics have been unsuccessful
• Most new content category growth occurs at the expense of growth of traditional ring tone formats: Young consumers have limited budgets
• Piracy issues and availability of free online content concern many executives, according to interviews conducted by JupiterResearch
• Third-party and pure-mobile players have relatively lower margins on real tones, tending to decrease advertising pressure that had stimulated the market as a whole

Growth will essentially come from the substitution of polyphonic ring tones for true tones and a limited increase of new formats (e.g., ring-back tones, video ring tones, screen savers). Also, mobile operators and record labels should partner with trusted third parties
to promote and advertise content based on impulse purchasing."

If you are a journalist (not a lazy one) and if you want a direct contact with our analyst, please e-mail us at presseurope (at) jupiterresearch (dot) com