Cell phone ringtones dial into pop culture
By Gary Strauss

Industry tracker M:Metrics says a record 24.6 million consumers downloaded at least one ringtone in April alone. About 250 million ringtones were downloaded by U.S. cell phone users in 2004, and they are expected to climb 60% to 400 million in 2005.

"They personalize your cell phone. You don't have to listen to all that bland (stuff), you can have real music instead," says industry analyst Roger Entner of Ovum Research, whose cell phone currently rings a slice of the Spin Doctors' early 1990s hit Pocketful of Kryptonite.

Though they may be the latest annoyance to the technophobic, ringtones hit a milestone of sorts this week in Britain, where the ringtone-inspired tune Crazy Frog Axel F hit No.1 on the singles charts.

Ringtones aren't a threat to standard U.S. music forms just yet. But bands and record companies are clamoring for them as revenue sources and promotional tools. Thursday, Cingular Wireless, the USA's largest wireless carrier, launches exclusive ringtones from Gwen Stefani based on four songs from her hit album Love Angel Music Baby.

Alt-rockers Coldplay used ringtones to give Cellular Wireless users an exclusive taste of the single Speed of Sound weeks ahead of its radio debut. (Surprisingly, Crazy Frog now tops Speed in Britain.)

"Artists see ringtones as a new channel for creating buzz," says Dan Mosher of Jamster, the marketer behind Crazy Frog and a leading ringtone provider. "You might only get 25 seconds, but it gives you a taste."

At up to $2.99 a download, ringtones are pricier than the full-song digital downloads bought for computers and iPods. But that's not stopping fans from cherry-picking musical snippets. "People are willing to pay because ringtones personalize who they are and let everyone know it," says Antony Bruno, digital and mobile editor at Billboard magazine, which began ranking weekly ringtones in late 2004 and bestowed its first Ringtone of the Year for rapper 50 Cent's In Da Club.

Verizon Wireless markets a popular 10-pack for $9.99. It has also begun a national rollout of ringbacks (tunes callers hear instead of a "ring"), spokesman Jeffrey Nelson says.

Ringtones originated in Japan and Korea in the mid-1990s before spreading to Europe. Their popularity in the U.S. didn't start to rise until 2003, when major carriers opened their networks to ringtone marketers and technology for better quality tunes improved.

Overall U.S. sales hit about $400 million in 2004. But that just represents 10% of the $4 billion global market. "We've just scratched the surface here," Entner says. "U.S. sales can easily jump to $1.5 billion within five years."

Revenue is typically split by carriers, music labels, artists and independent sellers. Carriers usually reap the biggest cut. "Lots of people change every few weeks, and ka-ching! It's another $1.50 for the carrier," Entner says.