Ring, ring, Cha-ching!

Did you know that next to texting, ringtones have been the second most popular data service among cel phone users?

It's one kind of music downloading that the Music Industry is highly in favour of, and what's not to love? In 2006 alone, the revenues from ring tones were nearly $5 billion dollars, with people paying anywhere up to $3 for what is usually a 15 second clip of music.

According to Martin Bandier, CEO of EMI Music Publishing, his company collects about 10% of the retail price of ringtones. The songwriter gets paid a royalty from that.

Ironically, the increasing popularity of texting has seen the ring tone business decline in recent years. It seems people are phoning each other less and texting each other more- if your phone doesn't ring so often, it stands to reason that hearing a snippet of one's fave tune might decline in importance.

Ringtone revenues reached in $881 million in 2007, and peaked at $1 billion in 2008... but by 2010 had declined to about $750 million. Some feel that the market will have dropped to $0 by 2016.

Fortunately, just as the earnings from ringtones were declining, along came the ringback. A ringback tone is a song, voice message or a series of digitized sounds heard by callers as they wait for the call to be answered.

Ba da bing!

The ringback is a real upgrade on the original ringtone - unlike ringtones, which 'live' on your phone, ringbacks are delivered over the phone network, which makes ringback music much harder to pirate.

Ringback revenue has more than doubled since 2005, and it brought in almost $200 million for music labels in 2009. It's the kind of easy new money that the Music Industry usually fails to mention when they talk about how dire their situation is these days...
Here's BMI's perspective:
Ringback tones are sold by all major carriers and retail at prices between $1.99 and $2.50 per tone with the vast majority of tones selling at $1.99. The fee allows the subscriber to use the tone for anywhere from 90 days to 12 months. With only one exception, all major carriers require a monthly recurring subscription fee to the service, which is required before a subscriber can purchase a tone. The monthly recurring charge ranges from $.99 to $5.00. Carriers representing more than 75% of U.S. wireless subscribers offer the monthly subscription services at $.99 or less.

FYI - here are the most popular ringtones of 2010

1)   Run This Town ~ Jay-Z, Kanye and Rihanna
2)   One ~ Metallica
3)   Stickwitu ~ Pussycat Dolls
4)   Way of Life ~ Lil Wayne
5)   Fast and Furious (Theme Song) ~ BT
6)   Party Like a Rockstar ~ Shop Boyz
7)   Miss Independent ~ Ne-Yo
8)   I'm Yours ~ Jason Mraz
9)   Ride ~ Ace Hood
10) Remix of 007 Theme
11) Nokia Dying Ringtone
12) My Heart Will Go On - Remixed
13) Waka Waka ~ Shakira
14) Theme of Harry Potter
15) You're Beautiful ~ James Blunt
16) Airplanes ~ B.O.B
17) Not Afraid ~ Eminem
18) Find Your Love ~ Drake
19) OMG ~ Usher
20) I Like It ~ Enrique Iglesias


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