Sales of mobile phone ringtones, those tinny song recordings programmed into millions of cellphones around the world, jumped 40% in the past year to $3.5 billion, according to a study released yesterday.
The worldwide sale of ringtones, which started as a marketing gimmick for music labels and mobile phone companies, is roughly equivalent to 10% of the $32.2 billion global music market.
Replacing the standard phone ring with a few bars from Elvis or a favourite TV show was first popularised by tech-savvy teenagers in the late 1990s.
The subsequent success of ringtones is a rare bit of good news for the music industry which has been stung by Internet piracy and fickle fans who would rather spend their money on video games than compact discs.
The popularity is also an important revenue generator for indebted mobile phone operators who have invested vast sums on the roll-out of 3G phone networks.
Revenues for ringtones are divided between the music labels, their artists and mobile phone operators. The average price of a ringtone is 60c, according to the study by London-based telecommunications consultancy, The Arc Group.
"It is become a very profitable area and there`s strong growth ahead," said Richard Jesty, an analyst for The Arc Group.
Ringtone prices vary widely by region, with SK Telecom, South Korea`s largest mobile carrier, charging the equivalent of 20c while Britain`s Vodafone charges roughly $2.75, Jesty said.
He forecast that sales will remain brisk through 2008 when downloads will top $5.2 billion. But as higher-power phones come on the market, consumers will turn to downloading larger files such as video games, sport highlights and short video clips.
As is the case with other forms of music, piracy is a problem with a host of small Web sites selling cheap music downloads without authorisation from music companies.
Ringtones and games still lag well behind basic text messaging, which generated $40 billion last year for mobile phone companies. That figure is expected to explode as phone users get into the habit of sending multimedia and picture-messages, Jesty said.
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