Ring tones dial up the cash

Mobile ring tones have become big business for the music publishers and mobile operators -- yet they are unlikely to be the panacea for declining revenues in both industries.

Ring tones brought in $71m for record companies in 2002, up 58 percent on the previous year, according to the latest report from Baskerville, entitled 'Mobile Music'.

While there is a large grey market of ring-tone services that does not bring in money for rights holders, the report authors are confident about what's ahead. According to the report, factors which indicate a promising future for ring tone and other music purchasing via mobiles include:

- a history of mobile music consumption, via the Walkman and CD Discman;

- a microtransaction billing infrastructure already in place;

- brands and user demography that are attractive to record companies.

The downloadable ring tone phenomenon has also benefited operators who are looking to increase non-voice services as voice average revenue per use (ARPU) figures decrease.

However, there are caveats. The report authors warn technical obstacles to future growth include the rate at which consumers buy advanced handsets, network speeds and the lack of digital rights management (DRM) implementations in the market.

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