How do we revitalize mobile music?

For the past few months I've heard many content firms bemoaning the flattening of ringtone sales. Clearly ringtones couldn't sustain the high growth curve that the industry enjoyed for the past several years, but this leveling off seems to be catching some by surprise. Yankee Group says the reason for the flattening (or even decline) in ringtones is market maturity, pricing barriers (the price of a ringtone is high when you compare it to the price of a full-track download) and technology (there is software that enables consumers to make their own ringtones). Clearly the industry is in need of a mobile music renaissance.

I doubt over-the-air full-track downloads will bring the much-needed revitalization. OTA downloads have experienced lackluster growth whether priced as a subscription or a la carte. According to Yankee Group, only 3 percent of consumers download music to their mobile phones. 

Are ringbacks the next sure thing? IDC predicts 40 million worldwide will be subscribing to ringback tones in 2010. But that figure seems a bit high to me. Yankee Group estimates that only about 8 percent of U.S. subscribers have ringback tones. Of course, ringback tone vendors estimate that figure is more in the 15 percent to 20 percent range. I've written in the past [1] about how I think ringback tones lack visibility in the market. I still think that's true.

Perhaps the key to revitalizing mobile music doesn't lie in one service but instead in the entire portfolio. Instead of selling these services individually and in silos, operators need focus on merchandize music to the consumer in an easy and intuitive way. I have seen some progress in this area but it's a long way from perfect. It's time to figure out this market and drive innovation.  -Sue [2]