After years of double-digit growth rates, the global ringtone market appears to have come to the end of its crescendo, according to a variety of measures. In some parts of the world, ringtone sales are actually declining, and the former ringtone kings, such as Jamba of Germany and Musiwave of France, are refocusing their businesses on other ways to personalize cell phones.
A couple of years ago, there seemed to be no upper limit to the sale — for a couple of euros, or $3 to $4 — of snippets of music that blast out of cell phones. Billboard magazine created a “hot ringtones” chart in 2004 to track their popularity, and at one point in 2005 analysts predicted an $11 billion ringtone business by 2010.But the market changed in unexpected ways. For one, more mobile phones were being made with the ability to create or record their own tunes. For another, record labels promoted so-called master ringtones — excerpts from the original pop recordings — for about the same price as the knockoffs but with higher royalty fees.
And digital music stores such as iTunes began packaging and selling ringtones alongside their 99-cent singles. All three trends lessened the profitability of ringtone aggregators, such as Jamba, the Berlin-based marketer behind the popular “Crazy Frog” melody. Jamba, known as Jamster in the United States, is still selling ringtones, but it has expanded into music, video and information services as well as graphics and games. The company was bought for $273 million in 2004 by VeriSign, which subsequently sold a controlling stake to the News Corp.
