Ringing Up Big Music Sales
By Yuki Noguchi
The first album from punk-pop band Yellowcard became a hit through conventional
radio and CD sales. But the group only broke into the big time when it launched
songs from its second album exclusively on a new stage: the cellphone.
Pictures of the quintet were blown up into 40-foot Verizon Wireless signs draped
off the side of buildings in Manhattan. Their title song, "Lights and Sounds,"
became the centerpiece soundtrack for 30-second commercials promoting the
cellphone company's music download service. In total, Yellowcard benefited from
$5 million to $10 million in advertising, something the band's label, Capitol
Records, couldn't have afforded, said Deborah Klein, the band's manager.
The cellphone business is retuning the music business. As radio's power to
create big stars fades, artists and music labels increasingly look at cellphones
as a new way of distributing and promoting music. It's not merely about the
20-second clips called ringtones and ring-back tones, which have blossomed into
a huge business generating more than $12 billion globally last year, according
to the Yankee Group. The focus now runs to the heart of the music market:
full-song downloads, music videos and a host of other music promotions around
rock concerts, behind-the-scenes interviews and sneak peaks into future
"Telecommunications and wireless companies are the future's most promising
distributors of music-based content," Warner Music Group chief executive Edgar
Bronfman Jr. said at a conference this week in Hong Kong. "How we affiliate with
artists . . . the deals we strike, the services we provide, all these . . . are
This week, T-Mobile USA struck a deal to make Atlantic Records' rap artist Lupe
Fiasco's new songs, "Kick Push" and "Just Might Be OK," available for download
on the carrier's latest Samsung T509 phone, more than a month before the launch
of the album in stores June 27. The same label's multi-platinum rap artist T.I.
agreed in March to put songs from his new album, "King," exclusively over Sprint
Nextel Corp.'s wireless network before the album sold anywhere else.
Sony Urban Music and Epic Records yesterday released R&B superstar Omarion's new
single, "Entourage," but only as a ringtone from BET Mobile.
Madonna's techno-dance song "Hung Up" was heard first on cellphone commercials
and as a ringtone before the tune even hit radio, said Michael Nash, a senior
vice president for Warner Music Group, prompting some desperate French radio
stations to try to play the song off of a cellphone for eager listeners.
Those types of deals mark a sea change in the way music is promoted and sold.
Record companies used to release songs to radio stations to popularize the songs
before albums would be on sale, and no retailers got special treatment. All
stores received their inventory and promotional posters, and the album was for
sale on a given date.
Just in the past year or so, music labels have started breaking with that
tradition, and looking at music promotion in a different way, Nash said.
"There's a buzz-building effect of going to market on mobile," he said.
Cellphone carriers also closely monitor content that travels over their
networks, which alleviates' record companies' concerns over piracy of early
releases, he said.
"The last year has shown how important the cellphone is for the music business,"
said Thomas Hesse, president of the global digital business for Sony BMG Music
Entertainment, which struck marketing deals for international stars such as
Shakira, whose song with Wyclef Jean, "Hips Don't Lie," first aired as a Verizon
Wireless commercial. Two-thirds of all music downloads in Italy come from
cellphones, and in Japan and South Korea, mobile represents a majority of
downloads, he said. Some artists, like rap star T-Pain, sell more songs in the
form of ringtones than as singles or albums.
A growing number of cellphones now come with speakers, memory, high-speed
Internet connections and battery life that make them capable of downloading and
playing full songs. Although it may not be as easy to navigate as a retail or
online store, the mobile phone is a highly personalized device used by more than
200 million people in the United States. Moreover, the phone is already a
communications device, making it an ideal way for people to share favorite
Cellphone companies are keenly aware of their growing importance in the music
business. A year or two ago, they were in a weaker bargaining position, asking
for permission to use songs as ringtones; now they find labels and artists
coming to them with new ideas. Some artists are even cutting recordings in the
studio designed as ringtones.
"There's much better coordination now than there has been in the past," said
David Garver, executive director of marketing for Cingular Wireless, which
struck an exclusive deal with "American Idol" allowing fans to download
performances as ringtones. Two years ago, when cellphone music was an
insignificant market, the major music labels paid little attention to carriers
like Cingular, which got access only to a limited library of tunes, he said.
"Now they have digital divisions that work with the carriers," and the companies
work in tandem to develop products designed exclusively for the carriers, he
"I used to go down there to the record store, and there was a social aspect to
it," said Michael McGuire, an analyst with research firm Gartner Inc. "You could
just hang around and get recommendations."
Now, in place of that, some companies are betting that people will use their
phones to share music with their friends.
This year, a Tennessee company, PassAlong Networks, plans to launch a service
that allows people to send text messages containing links to online music store
selections, where recipients of the message will be able to click, sample, and
buy music off their phone, a service the company already offers through e-mail
and instant message.
Last week, Verizon Wireless announced the winner of its online
battle-of-the-bands contest on MySpace.com, the social site where thousands of
homegrown acts have uploaded their songs.
The winner, an unsigned five-man rock band called the Parlour Boys, will produce
a music video, and its winning song, "Lovers," is available for download through
Verizon Wireless, its first commercial distributor.
"It's a huge opportunity to get our music out," said Clay Kennedy, a guitarist
for the band. "If we do well, it's gonna bode well for the technology."