Ring tones ring up big sales in Atlanta.
By Robert Luke
A ringing phone has become a
Not just any phone, but a wireless one with the latest ring tones, ring tunes
and ring backs.
"It's another way to show your personality to people," says Mark Frieser, a
mobile entertainment analyst. "People love to personalize their phones and freak
their friends out."
And that has wireless carriers and the recording industry groovin' all the way
to the bank.
Helped by Atlantans such as Michael Anderson and Megan Merriman, ring tone sales
this year could approach $600 million, double last year's receipts, according to
Frieser, who is chief executive of Consect, a New York-based mobile
entertainment research and consulting firm.
The figure doesn't include sales of ring tunes or ring backs.
For the uninitiated, a ring tone is the sound that a phone makes when it rings.
In the wireless world, there are monophonic (one-note) and polyphonic (up to 40
notes) ring tones. The music is synthesized.
Ring tunes -- a.k.a. master tones, true tones or real tones -- are snippets of
an actual recording formatted for a 10-to-30-second ring tone. You hear the song
and the lyrics, just like a downloaded MP3 tune.
"It's the actual artist singing," says Michael Johnson, regional vice president
of sales and distribution at wireless carrier MetroPCS, which last month
introduced ring tunes to its customers in metro Atlanta. Ring backs will follow
Feb. 1, and music streaming later this year.
A ring back service allows mobile-phone subscribers to select audio clips that
callers will hear before the phone is answered.
Unlike ring tones and ring tunes that are downloaded and stored in the handset,
ring back content is played from the wireless network itself.
Wireless carriers are spending billions of dollars to upgrade their networks
with next-generation technologies to allow for faster mobile Internet access.
That, in turn, will bring new and expanded services, such as streaming audio and
video, thus converting communication devices into entertainment ones as well.
"It is clear that wireless is the next frontier of music distribution," says
attorney Bobby Rosenbloum of Greenberg Traurig in Atlanta. He's one of the
nation's top entertainment lawyers.
Last month, for example, Sprint launched its streaming music file service that
includes video snippets of performances and artist interviews for $5.99 a month.
"We think this type of service will become 10 percent-plus of the user base
within three to four years," predicts analyst Albert Lin of American Technology
Several major phone makers already have the MP3 software for ring tones embedded
in phones, Lin says.
"Larger storage will create a music storing/playing phone market in a year,"
according to Lin. "When matched by high-speed networks, carriers get another
opportunity to address a market often characterized by spontaneous purchasing
That spontaneity may be one reason consumers apparently are willing to pay more
for a ring tone than to download an MP3 song in its entirety.
For example, Apple Computer's iTunes online digital jukebox charges 99 cents to
download "Drop It Like It's Hot" by Snoop Dogg and Pharrell Williams.
A snippet of that same hip-hop song, as a ring tone, costs as much as $3 to
download, plus the air time it takes to do so.
That can translate into big bucks. "Drop It Like It's Hot" has been the No. 1
ring tone for the past seven weeks, according to Geoff Mayfield, director of
charts and senior analyst at Billboard, the bible of the music industry. The
publication last fall began tracking ring tone sales with data supplied by
Consect. Sometime this year, Billboard plans to chart ring tune and ring back
sales as well.
"In six of those seven weeks, 'Drop It Like It's Hot' sold over 100,000 units,"
Mayfield says. "In its biggest week, it sold 171,000 at $2.50 to $3 per
To compare, there were a peak 37,000 downloads in a week of U2's "Vertigo," the
most sought-after MP3 track since Billboard began monitoring those sales in
The record companies and the wireless carriers split ring tone revenue roughly
50-50, according to Rosenbloum. From that take, the record companies pay the
artists, songwriters and so on, while the carriers pay companies that provide
the actual ring tone service, such as Ztango.
"We are the engine behind those services," says Adrian McAloon, Ztango's
executive director of content.
But that formula is changing, according to Rosenbloum.
"More and more carriers are ultimately going to do all of this on their own,"
building their own relationships with record companies and publishers, he says.
"You're going to see this over the next 12 to 18 months," he says. "This
includes games, video clips and all types of other content as well."
Michael Anderson, a 28-year-old hydraulic mechanic who resides in Douglasville,
is a MetroPCS customer who's already downloaded 10 ring tones in the two months
he's been a customer of the carrier. He says he plans to get two or three new
ring tones each month.
Anderson knows when his wife, Tyra Richardson, is on the line. When she calls,
U2's "Beautiful Day" rings on his LG phone. When a buddy, Marvin, calls, it's
OutKast's "Bombs Over Baghdad."
Similarly, Megan Merriman knows when her boyfriend, Steven, is calling. Her LG
phone, which she got about three months ago, blares OutKast's "So Fresh, So
Clean." When her three closest friends call, she hears Coldplay's "Clocks." And
when her parents tried to reach her over the holidays, she heard "We Wish You a
Merriman, a 20-year-old junior in industrial engineering at Georgia Tech, plans
to download one or two ring tones each month. The Verizon Wireless subscriber
pays for four at a time.
"One is $1.99; four is $4.99," Merriman says. "Whenever I use up the four, I buy
credits for four more."
The biggest users of ring tones are adults from 18 to 24, followed by teens,
according to analyst Linda Barrabee of the Yankee Group, a Boston-based
communications research and consulting firm.
"College-age students or young professionals make their own purchase decisions,"
Larrabee says. Teen use of mobile phones is largely governed by their parents,
Even so, the youth market is a lucrative one for phone companies. It's estimated
U.S. teens spent $170 billion in 2002, or $101 each per week, according to
Teenage Research Unlimited, a market research firm.
"In addition, teenagers and young adults tend to make more calls to friends, and
may be more likely than older adults to use wireless data services and the
Internet," says Standard & Poor's analyst Kenneth Leon.