Ringtones: Exiting as Fast as They Entered

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The ringtone is declining, that the industry knows.

But the return to Earth is happening quickly, according to the latest data.  Researcher IBISWorld pegged US-based ringtone revenues at $750 million in 2009, down from a peak of $880 million in 2007.

The company pointed to a shifting mobile landscape that now favors full-track, over-the-air downloads as ringtone substitutes.  “Mobile phones are now truly wireless internet devices and allow consumers to download full songs for ringtones rather than the 30-second versions available in the past,” said analyst Toon van Beeck.

Other factors are also in play, including the mobile side-loading of unpaid, full-track downloads.  Those can also easily be converted into ringtones, perhaps the bigger culprit.  Either way, ringtones at prices like $2.95 now sound ludicrous, though a revenue base of $750 million suggests that the party is still going.

But not for long.  IBIS suggests that the entire format will be gone in 15 years.  “Music ringtones practically boomed overnight, but with two consecutive years of decline it seems the industry is exiting just as rapidly as it entered,” van Beeck continued.