Ringtones are big business. It’s such big business, in fact, that MSNBC felt compelled to carry a good recap of recent developments. So big, in fact, that Billboard has a ringtone chart to go along with its singles and album chart. Sales last year in the U.S. alone were $300 million—the worldwide market is an incredible $4 billion.
Why do people pay $3 per brief ringtone when the nascent digital music market regularly hears complaints about a 99-cent price tag for an entire song? It’s a topic that should be taught in consumer behavior classes from coast to coast.
The ringtone, explains Fabrice Grinda, the founder of Zingy, is a form of self-expression. “If you‚re in high school and you have the latest Snoop Dogg or 50 Cent, it shows that you‚re in.” My guess is that it also benefits from a disassociation with online music stores and the established 99-cent price for which they’re known. Music is music, ringtones are ringtones. Different products, different prices.
Those three-dollar ringtones add up quickly, offering high margins and fast returns to companies like BlingTones, a creator of exclusive ringtone music by such well known producers as Q-Tip and Rockwilder.
The consumer gets an exclusive music snippet to show off in movie theaters and restaurants. Record labels—if they’re involved at all, since some ringtones completely circumvent the labels—get to build artist awareness. Everybody gets a new revenue stream, and one that doesn’t eat into traditional music sales. Everybody’s happy. It’s almost too good to be true.
That 5,000-song MP3 player you just bought? If you’re an average European MP3 player owner, only 2% (or 100 songs) of that disk space is being accessed on a regular basis. A study by NetImperitive concluded that MP3 players could be “reduced in size, capacity and price, but still be as popular and efficient.”
This study is sure to boost the morale of cell phone manufacturers who are hot to bring the phone/MP3 player hybrid to the masses.
Even if only 100 songs are listened to on a regular basis, those extra gigs are far from unimportant. What I’m commonly told is the owner likes the feeling of having so many songs at his/her command. Certainly not all songs are accessed; to attempt to do so would be next to impossible. For those who always use the shuffle function, though, having more songs means a better (more unpredictable) shuffle experience. If life is random, as Apple tells us, then the odds of hearing any one song should be more like 1-in-5,000, not 1-in-100.
Another way to look at it: It’s all about gluttony, and one need look no further than oversized restaurant portions, large automobiles and home-dominating garages to conclude that Americans may simply prefer to own a larger hard disc—even if it’s never used.
Digital Player Market Starting To Thin
Here’s a sign the heady, optimistic days of the MP3 boom may be giving way to the realities of an increasingly crowded market: Virgin Electronics has discontinued its wholly unimpressive line of digital music players.
A source told Digital Music News that Virgin Digital, the online music store arm of the company, will not be affected by the discontinuation.
Check Engadget’s obit on Virgin Electronics, in which is recalled the MP3 player it thought was the “most half-hearted attempts at iPod killing” they’d ever seen.
So, who will drop out next?
Glenn works in the music industry in New York City. He writes about the industry and music in general at his blog, Coolfer.