Chris Brown's Run It!, the Black Eyed Peas' My Humps and Young Jeezy's Trap Star are alerting cellphone users to incoming calls, but the sound ringing in the ears of the music business is "ka-ching." Candy Shop by 50 Cent was the No. 1 downloaded ringtone last year at 1.9 million sales.
By Danny Moloshok, AP
Ringtone sales are off the hook. And while the revenue stream is only a trickle in the $12 billion industry, it's growing feverishly as CDs slump.
In 2005, tones pulled in $600 million, 20% ahead of estimates and more than double the 2004 take. The year's leader, 50 Cent's Candy Shop, sold 1.9 million downloads, more than the top-selling digital song: Gwen Stefani's Hollaback Girl, with 1.2 million.
What's Driving This Trend
- Mobile Music Consumption
- The trend of increasing mobile music consumption through ringtones and other mobile-friendly formats offers opportunities for disruptive innovation in mobile music delivery and targeted advertising.
- Digital Downloads Vs. Physical Sales
- The trend of digital downloads outperforming physical CD sales highlights opportunities for disruptive innovation for businesses that embrace digital delivery and mobile commerce.
- Emergence of New Digital Markets
- The trend of emerging digital markets, such as mobile ringtones, underscores opportunities for disruptive innovation for companies that recognize and capitalize on new digital platforms.
Who This Affects Most
- Music Industry
- The music industry has an opportunity to capitalize on the sales potential of ringtones and other mobile-friendly formats, including strategic partnerships with wireless carriers and technology providers.
- Mobile Telecommunications
- Mobile telecommunications companies have an opportunity to leverage the popularity of mobile music consumption to drive adoption of new technologies, such as high-speed data networks and advanced mobile payment platforms.
- Advertising Industry
- The advertising industry has an opportunity to partner with music and telecommunications companies to deliver targeted advertising based on consumer music preferences and mobile user behavior.
