Xellular Identity - All About Mobile Content & Marketing

Ringback Tones Promotions

Hi all,

Xmas is right around the corner with its creative ringback tone mass media campaigns... But before that, I didn't want to leave without acknowledgment a few RBT campaigns from the last two months.

First campaign is brought to you from Colombia. The Colombian mobile operator Tigo has partnered Sony BMG to promote its content in a leaflet inside CDs and DVDs. Now Colombian CD\DVD buyers can simply send the short code that appears on the leaflet via SMS and get their own Backtone (Tigo's service name for ringback tones). The most crucial factor in this campaign is the offered playlist -- it would be very clever to offer music of the same type as the bought CD\DVD.

The second campaign is brought to you from the US. American mobile operator Cingular the mew AT&T launched a huge "Win a trip for 2 to meet Fall Out Boy, 50 Cents or Taylor Swift" campaign. AT&T users are encouraged to "Find Your Tone-ality to Fit Your Personality" and download an Answer Tone (AT&T's service name for ringback tones) and apply. Then, "if the artist calls you and hears his or her own song, you've won!"

And I can't wait to see this year's ringback tones Xmas campaigns... now that's a treat :)

Pricing: THE "Make or Break" Factor

We've been asked many times - what is the right price for ringback tones? Should it be related to the price of ringtones? What parameters should be taken into consideration while determining the price? Those are great questions that I'll try to answer here, based on the experience and data that has been gathered from many operators worldwide.

In general, the ringback tones pricing model is based on a combination of these revenue streams:

• Content fee - the price that is paid for each selected tune.
• Monthly/daily fee - the price that is paid for operating/enabling the ringback tones service.
• Registration fee - a one time fee that is paid upon joining the service.
• Content expiration - some operators have a tune expiration date, which means that after X days the activated tune expires. If the subscriber won't buy a new tune after the old tune expires, the default "ring ring" will be assigned to his/her account. Usually operators notify the subscriber that his/her selected ringback tone is about to expire and will offer a new tune (for a full/reduced price).

These four streams join up to 3 common pricing models:

1) Content fee + Monthly/daily fee:
An AT&T user (for example) is charged $1.99 per tune + additional $0.99 of monthly fee for the Answer Tones service. The monthly fee is charged regardless of the number of Answer Tones ordered.

The benefits of this model are the constant revenue stream & quick return of investment (ROI) coming from the monthly fee. However, setting the right monthly fee is crucial; overcharging will lead to high churn rates.

2) Content fee + Content expiration:
An AMC user (for example) is charged 120 lekë ($1.41 USD) for content fee and the Fun Tune expires after 6 months.

The benefit of this model is the lower user resistance due to the lower (perceived) price for ringback tones. Content expiration increases awareness of the service (subscribers don't hear their own tune and many times they actually forget that they are subscribed to the service) and aims to generate more usage. When the tune expires, users are offered to purchase a new tune. At this point users are actually reminded that they have been subscribed to the ringback tones service which leads to 2 scenarios: a) users choose to opt-in and buy a new tune (i.e. pay the content fee) or b) users are reminded that they have been subscribed to a service that they no longer want and they opt-out. Unfortunately, many users choose to opt out, causing higher service churn rates.

Operators that use this pricing model are strongly recommended to have a good renewal system which offers the user a new tune upon the expiration date and provide an easy and intuitive purchasing experience (usually via SMS with deep linking). The importance of the renewal system is greater as the tune's "shelf life" is shorter. Also, it should be based on intuitive call for action.

3) Content fee + Registration fee:
A Kyivstar user (for example) is charged 7,30 UAH ($1.45 USD) upon joining the D-Jingle service (one time payment for activating the service) + additional 7,30 UAH ($1.45 USD) for each tune. All tunes expire after 3 months.

This model is less popular among operators as it generates lower revenue stream for the operator. Also, at the first purchase, subscriber is charged for two payments (content fee and registration fee) at once, making the perceived price relatively high.

To summarize, each of these models has it advantages and disadvantages but there is no correlation between the pricing model & the ringback tones service take-up; however, there is correlation between price & service take-up, the price is THE "make or break" factor, as you can see in the following diagram:

Effective Pricing - Guidelines:

While there is no single winning recipe for ringback tones pricing, we do have some recommendations and guidelines for effective pricing. First and most important, the ringback tones price should be:

• Affordable - based on subscribers' capabilities
• Perceived as fair - compared with other operators & services

How can you make sure the price is affordable and perceived as fair?

Factor	Recommendation
Competitors	Lower or equal to competitors' price
Ringtones	<monthly fee + content fee> should be 30% below or above ringtones price
Monthly ARPU	<monthly fee + content fee> should be lower than 20% of ARPU
Average Prepaid card	Users should be able to pay monthly fee & purchase ringback tones along with their other voice & data expenses

And one last tip: if you don't have it already - create and promote a "promotion" category with a lower price. The promotion items can include the new single the music label is currently promoting, music covers, a discount for the first purchase etc'.

Coming Soon: Multimadia Ringback Tones

Real announced at the CTIA conference it will supply wireless operators with multimedia ringback tones. The Multimedia ringback tone takes the very popular musical ringback tone service to a whole different dimension, from the audio space to the visual video clip arena. It allows you to set a video clip to entertain your callers while waiting you answer their call.

"Building upon Real’s pioneering success in Ringback Tones (RBTs), Real is making Multimedia Ringback (MRB) Services available to mobile operators around the world.  This new 3G mobile service—first launched with Korea’s SK Telecom earlier this year—ushers in a new level of personalization in RBTs, allowing subscribers to incorporate audio, images and video to deliver a unique, customized experience to callers before they are connected."

[via press release]

Related stories: A Jump Into the Future - Multimedia Ringback Tones

The Fun Dial Marketing Seminar - First Coverage

Back in 2002 was the first introduction of customized ringback tones, made by the South Korean operator SK Telecom with its 'Color Ring' ringback tones service. SK Telecom generated over €80 million (US$100 million) in Q2 2002 and has reached 54% of SK Telecom's 18 million subscribers in penetration.

Despite of the cold welcoming of operators in Europe and America, today Ringback Tones is becoming one of the biggest mobile entertainment revenue generators. In some operators Ringback tones are overtaking ringtones sales. In Europe and North America there’s a 60%-80% of Ringback Tone potential end-user-coverage, at least one operator in each Western European country and almost all in North America has already launched the service. Also analysts forecast a substantial ringback tones market growth in the upcoming years.

 

At present, most of the operators are facing various challenges in the way to increase Ringback Tones service penetration, create on going usage of content, increase the awareness and in general turn Ringback tones into a more successful service. Understanding operators' needs and challenges Comverse Fun Dial (Comverse’s Ringback Tone brand) team came up with the idea to hold the second ever marketing seminar focusing the European market. The Fun Dial Seminar brought together leading industry experts, mobile operators, (some that have already launched the service and some which are on the process of launching), as well as content providers, music labels and managed services providers to facilitate an environment of knowledge sharing and to create an open forum to discuss burning issues related to Ringback Tones.

For those of you who weren't able to attent the Seminar, I will cover here some of the study cases presented at the Seminar:

• How to turn the Ringback Tone into a successful service generating significant revenue?
•Case studies of successful Ringback Tone marketing strategies led by mobile operators
• Opening the ringback tones service to 3rd party content providers.

You're welcome to tune in every Tuesday for a part of this series!

Back in 2002 was the first introduction of customized ringback tones, made by the South Korean operator SK Telecom with its 'Color Ring' ringback tones service. SK Telecom generated over €80 million (US$100 million) in Q2 2002 and has reached 54% of SK Telecom's 18 million subscribers in penetration.

Despite of the cold welcoming of operators in Europe and America, today Ringback Tones is becoming one of the biggest mobile entertainment revenue generators. In some operators Ringback tones are overtaking ringtones sales. In Europe and North America there’s a 60%-80% of Ringback Tone potential end-user-coverage, at least one operator in each Western European country and almost all in North America has already launched the service. Also analysts forecast a substantial ringback tones market growth in the upcoming years.

 

At present, most of the operators are facing various challenges in the way to increase Ringback Tones service penetration, create on going usage of content, increase the awareness and in general turn Ringback tones into a more successful service. Understanding operators' needs and challenges Comverse Fun Dial (Comverse’s Ringback Tone brand) team came up with the idea to hold the second ever marketing seminar focusing the European market. The Fun Dial Seminar brought together leading industry experts, mobile operators, (some that have already launched the service and some which are on the process of launching), as well as content providers, music labels and managed services providers to facilitate an environment of knowledge sharing and to create an open forum to discuss burning issues related to Ringback Tones.

For those of you who weren't able to attent the Seminar, I will cover here some of the study cases presented at the Seminar:

• How to turn the Ringback Tone into a successful service generating significant revenue?
•Case studies of successful Ringback Tone marketing strategies led by mobile operators
• Opening the ringback tones service to 3rd party content providers.

You're welcome to tune in every Tuesday for a part of this series!

Reminder: The Webinar is Today

Just a quick post to remind you that our webinar is happenning today. If you'd like to join - you're only one click away.

Enjoy!

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Learn how can operators gain significant revenues from ringback tones by leaving the marketing to third party experts to promote the concept of RBTs successfully.

• Ringback Tones - The Next Wave
  Mr. Meidad Sharon, Director of Product Marketing, Fun Dial^TM Comverse
• The First Ever Off-deck Ringback Tones Case Study in the Western Hemisphere
  Mr. Andrew Rippon, Vice President Sales Central Europe, Jamba
• Q&A

one of the leading global mobile entertainment D2C companies, is the first off-deck player in the western world to carry out a mass-communication campaign promoting its ringback tones in 2 operators in Germany, generating substantial revenues for both mobile operators and Jamba.

Comverse Fun Broker takes the ringback tone service out of the “walled garden” by enabling ringback tones to be sold off-deck by third-party players, using the successful model used for ringtones. By that, Fun Broker enables operators and content providers to exploit the huge off-deck potential.

Come and have a taste of the next BIG THING for ringback tones!
September 20, 2007 at 15:30 GMT; 11:30 EST; 17:30 Israel time;

You're Invited to a Webinar

Hi all,

As you know, at my day job I work in Product Marketing at Comverse. I wanted to share something I've been working on lately:

Next week we're having a webinar which will cover the off-portal new market for ringback tones. (You're probably raising an eyebrow and wondering what am I talking about...) Here is a short overview and some background information:

As you know, a ringtone is a music file that is installed on your mobile device. After downloading the file (from your operator's portal or from other providers) the file is yours to keep. A personalized ringback tone is a tune heard while your callers call you which replaces the default "ring ring" tune. as opposed to the ringtone, your ringback tone is at the operator's system. This is why the operator has been the only player who could offer this service.

The upcoming webinar will present the first case study of two German mobile operators who have opened their system to a content provider who has been successfully promoting their ringback tones services.

Attached is the invitation to the fun dial webinar, feel free to join! :)

--------------------------------------------------------------------------

Learn how can operators gain significant revenues from ringback tones by leaving the marketing to third party experts to promote the concept of RBTs successfully.

• Ringback Tones - The Next Wave
  Mr. Meidad Sharon, Director of Product Marketing, Fun Dial^TM Comverse
• The First Ever Off-deck Ringback Tones Case Study in the Western Hemisphere
  Mr. Andrew Rippon, Vice President Sales Central Europe, Jamba
• Q&A

one of the leading global mobile entertainment D2C companies, is the first off-deck player in the western world to carry out a mass-communication campaign promoting its ringback tones in 2 operators in Germany, generating substantial revenues for both mobile operators and Jamba.

Comverse Fun Broker takes the ringback tone service out of the “walled garden” by enabling ringback tones to be sold off-deck by third-party players, using the successful model used for ringtones. By that, Fun Broker enables operators and content providers to exploit the huge off-deck potential.

Come and have a taste of the next BIG THING for ringback tones!
September 20, 2007 at 15:30 GMT; 11:30 EST; 17:30 Israel time;

Usability Rules!

The common goal of all usability professionals, no matter if they specialize in cooking utensils, clothing or developing mobile applications and services, is to develop products from the end-user needs’ perspective, so they could use them easily and intuitively. Developing products should not be based only on technical possibilities and/or limitations. why? Simply, when it's easy to use, more people will use it and the more revenues the product\service generates. Unfortunately, many products fall at the "technical trap" and leave behind the goal of intuitive usage.

That is why I was very impressed with Hutch (India) “Copy Callertune” feature:

So simple. So elegant. So intuitive. All you need to do is press the * key when the ringback tone is playing. Who wouldn't press * if he\she hears a cool Callertune?

At Hutch’s website I’ve found the following directions:

“How to copy Callertunes Like your friend’s Callertune? Now you can set it on your own Hutch phone - it’s easy! Just call your friend, and while the Callertune is playing, simply press the * key on your Hutch phone. That’s it - the Callertune will automatically be copied and set on your Hutch phone.”

Way to go! And if you come across more cool examples - don't be shy and send me a word about it. Thanks :)

Your Help Is Needed

Hi,

I'm back from a short vacation (I moved to a new apartment) and found this ringback tones commercial of Hutch in my inbox. The problem is that I don't know Hindi... so if any of my dear readers can help with the translation, it will be very much appreciated. Thanks :)

Ringback Tones - some figures

"Personalization is what is really driving the mobile phone market right now," said Laura Merritt, spokeswoman for Verizon Wireless. "The cell phone has become an extension of people's personalities with ringtones, ringback tones and other customizable options."

"Verizon wouldn't give exact figures on how much money the company makes off of extras like ringtones. However, in the first quarter of this year alone, Verizon customers downloaded 106 million ringtones, ringbacks, songs, games and applications, Merritt said. Each one of these customizations costs anywhere from $1 to $10."Ringtones and ringback tones are certainly among our more popular offerings," Merritt said."

[via The news Herald]

Frank Dickson of iSuppli: Strong Long Term Growth Lies in the Mobile Full-Track-Downloads

Hi all,

Welcome to the second part of the mobile content coverage.

Today, Frank Dickson from iSuppli will be visiting here. Frank is Principal Analyst, Multimedia Content Services. He covers markets for digital video and home entertainment, with focus areas including IPTV, video on demand, home networking and broadband video.

Hi Frank. How are you today?
Life is good. Thanks for asking.

What has been successful to date and what promises to sell in the future?
In addition to premium content, messaging continues to grow strongly worldwide but with significant regional variation. The mature country markets of Western Europe and Asia saw growth, but the growth in the Americas almost astounding. Growth is strongest among the US operators, several of which saw revenue associated with messaging double in 2006 compared to 2005. Messaging growth is being driven by both increased p2p messaging usage as well as increased premium SMS associated with mobile content purchases and participative TV.

What are the key drivers for market growth for different types of mobile content and entertainment?
The future is all about video! The mobile video market continues to develop, but remains highly fragmented on nearly all fronts. Business models are uncertain. Technology standards are uncertain.  Consumer usage models are uncertain. Content rights need to be resolved. Geographic differences are significant in both content consumption and regulatory environment. As a result, the mobile video market will take time to develop, but offers the biggest potential upside. Competitors across the value chain should participate early to learn and develop a position in the market. Competitors should set expectations appropriately for a highly volatile market with high uncertainty in the short term. Agility will be key to adapt to rapid change.

Many state that widespread consumer demand has lagged after a rapid penetration rate. Why? What are the barriers for market growth of market for mobile content?
The major barrier to growth of mobile content is leakage, as in revenue leakage. Approximately, 5% to 10% of transactions turn out as bad transactions due to fraud, lack of funds on a prepaid card or delivery problems. Another 5% to 15% of good transactions result in refunds due to shady marketing practices, overly protective wireless operators not wanting a customer to have a bad content experience or a lack of transaction visibility for customer service. Wait, did I mention the customer service support call costs? There is money leaking everywhere.

One of the problems is that the wireless operators want to be in the center of the purchase experience.  The billing systems however are built to service reoccurring wireless subscription customers. Wireless operators making themselves the nexus of mobile commerce transactions creates a problem as they are now providing high volume transaction clearing services like those provided by Visa, PayPal and others.  Frankly, processing financial transactions is not at the heart of their distinctive competencies.

How will the services evolve over time?
The mobile music market is among the most dynamic content categories worldwide. Polyphonic ringtones are receding with a transition to realtones. However, on a worldwide basis, the overall ringtone category appears to be slowing. 

Ringback tones continue to gain strength in Asia, but haven't migrated significantly to other geographic regions yet. Video ringtones are among the newest services positioned as a next-generation ringtone.
The emergence of full track download music services continues, with operators worldwide deploying services. Dramatic growth of these services remains mixed regionally and by operator. Consumers are still slow to build awareness, while operators have significant challenges to put together a cohesive and easy-to-use full track music storefront. Overall, in the emerging battle between music phones and mp3/pmp players, the music store and music delivery platform still significantly favors mp3-oriented services. 

What applications will drive the market in the next few years?
We believe that there is strong long term growth in the mobile full-track-download market. However, outside of Asia, the inflection point for dramatic growth is still developing. Overall, iSuppli reduced it’s full track download forecast in this quarters tracker, while increasing our outlook for mobile music streaming services. Full track downloads will continue to be among the strongest mobile content markets, while streaming music services will segment the market somewhat and take advantage the subscription-based business model which aligns ideally with mobile operator business models.

For example, we did end-user primary research to provide more insight into consumer demand.  Approximately two-third so respondents listened to music on they PMP; however, only 10% listened on their phones. This suggests their may be some struggle converting individuals from a usage specific device mentality to unbiquitious device mentality.

A big thanks to Frank Dickson for this great interview! :)

Enriched Ringback Tones Offering With Non-Music Content

When you think of ringback tone, the first thing that probably pops into your mind is a personalized music played when you wait for the person called to answer. Last week I came across creative thinking of what can be nice to hear while waiting:

The Indian mobile operator Hutch enriched its ringback tone portfolio with a few creative non-music content categories (apart of the natural/default music category):

• One of the categories offered by Hutch is playing cricket scores for callers. Once Cricket Callertunes are enabled, it will play cricket scores on match days, and even carries a stadium jingle followed by the match details. When the day's play is over, Cricket Callertunes will automatically get disabled and the default Callertunes will be activated. On the next match day, Cricket Callertunes will automatically be re-activated and so on. [No need for me to spell it out how these so frequent updates generate $$, right? ;)]
• The second category offered by Hutch is called “Busy Callertunes”. Once it is enabled, callers will know that you are unable to take their calls. You can set an appropriate Busy Callertunes to tell when you are in a meeting, at the movies, have low battery, or on a holiday, without answering the phone (activation is made by sending SMS).

This is a great example how “thinking out of the box” can help operators build a creative and wider offering which attracts many more users to the service. And I’ll end this post with the TV commercial of the Cricket Callertunes - enjoy!

You Asked, We Answered

Today we have a an interview with Comverse Fun Dial marketing experts, Audelia Boker and Inbal Rosenberg, and Scott Manthey of JabberTones will be asking the questions!

Scott: Why have ringback tones in general been the red headed step child in the content mobile industry? I have felt that the hype in the industry after real tone/master tone debate and the never found app skipped right onto video when ringbacks were today and video is still tomorrow. Is it the carriers (b/c there is no competition= no marketing?) The content producers (figured the carriers would advertise for them?)
Audelia: For a long time, the only players that were able to market ringback tones were the operators since it's a network service. Therefore, B2C players such as content aggregators couldn't take part in the business and promote the service. This is about to change, with content mobile players stepping in.

Scott: Why haven't the enterprise sector jumped into ringback space - branding their company cell phones without spending on a pbx?
Inbal: I think it all depends on how aggressively the operator is marketing the service to this segment. We know of operators that 20% out of their ringback tones users are corporate users.
Xen: There are some mobile operators that have realized that the business is a relevant segment for ringback tones. For example, Orange IL targeted its business customers and provided a suiting offering -- to turn the ringback tone into a channel to communicate with wide audience. Many big sized companies use the corporate ringback tone as another channel of advertising (and play their advertising campaign), small and medium sized businesses, which have smaller budgets for advertising, use their company’s ringback tones to position themselves as creative, dynamic, cool and promising companies.

Scott: In terms of trends of ringback tones purchasing, is there a correlation with handsets or computer usage or any customer habits outside the mobile arena?
Audelia: Not that we know of. We are more aware of a correlation with other mobile types of usage (SMS usage, games, etc…).

Scott: I have heard that the beast selling ringback tones are movie themes - is this consistent with your data? How is the content different than the top selling ringtones? More voice tones? More music? I really care more about the content that is not being driven by a marketing campaign - A team theme song for instance.
Audelia: It very much depends on the country specificities. Overall, we know that most successful ringback tones are music related. But in some countries (e.g. Turkey, China) jokes are very successful too.

Scott: Can we compare the adoption curve in the US to Asia with the overall marketing budgets and educational campaigns?
Audelia: No. In Asia, more or less from day1, all operators and content providers invested in the service. Therefore awareness grew almost over night and service adoption was much faster.

Scott: Do you think there is a correlation between the age of ringback tones users and the fact that ringback tones are only for post paid? Whereas ringtone sales are for both pre and post paid?
Audelia: RBT are not only for post paid in most countries in the world. If that's the case in the US, it certainly has an impact on the average age of RBT users.
Xen: We run into a great example of Hutch, the Indian mobile operator, which sells ringback tones for prepaid with Fun Cards. Here is the TV ad:

Scott: How many telcos have a pre paid ringback tones service? I know Telefonica launched with Comverse but are there any elsewhere in the world?
Inbal: yes. Most operators in APAC & Eastern Europe have prepaid ringback tones service as in most cases over 80% of their users are prepaid.

Scott: Overall is the ringback tone service a less developed service than sms b/c essentially it is a voicemail technology and carriers have little faith in old technology?
Audelia: What do you mean by voicemail technology? Ringback tones is less developed mostly because it has no functional benefit, whereas SMS obviously do. Moreover, ringback tones require constant marketing efforts, whereas it's not the case for SMS. So it's less a matter of faith and more a matter of efforts required in order to promote the service and generate revenues.

Thank you Scott, Audelia and Inbal for this spontaneous interview! :) If you have further questions, feel free to send them over.

Seamus McAteer of M:Metrics on the Ringback Tones Market (Part III)

Welcome to the third part of the ringback tones coverage. Today, Seamus McAteer will be visiting here. Seamus is a co-founder, chief product architect and senior analyst at M:Metrics. Seamus has covered the wireless industry since the early 1990s and has earned a reputation as one of the most respected and credible analysts in the industry. He held director and research fellow positions in several corporations analyzing internet and communications technology before founding his own wireless and telecommunications advisory services firm. He is frequently sought by the media for expert commentary on wireless, Internet and related technologies.

If you missed the previous two part here are the links: the first part and second part.

Seamus, the stage is yours:

Hi Seamus. Thank you for visiting Xellular Identity :) How are you?
Great, thanks :)

What kind of business models exist today in the ringback tones market?
Pricing for Ringbacks can vary quite considerably. Most operators charge a monthly fee of between 99 cents for Cingular and Verizon and $1.49 for T-Mobile. Sprint charges $2.50 for use of a tone for a 90 day period. Some operators such as Boost charge a monthly subscription fee for use of a song. Again, like the issue with lots of different names, lots of different pricing schemes has got to create some confusion.

Labels like Ringback tones because it yields a nice recurring revenue stream and they get a nice royalty payment as operators will use a label-owned recording by the artist, this is not the case for poly tones for example. As a result labels can expect so share north of 30% of the retail revenue in most major markets.

Do you see correlation between market adoption and churn for ringback tones?
Comparing adoption rates and churn across markets it is evident that as adoption climbs churn falls. For example Spain has the highest level of adoption among the markets with track with about 10% of Spanish mobile subscribers over 13 reportedly using the service and it has the lowest churn rate of about 12% in a month. Italy has the highest churn of over 20% monthly and the lowest rate of adoption after the UK at about 3%.

Any examples of marketing best practices?
Verizon has the highest level of awareness and lowest churn for ringback services in the US. Its packaging of the services has been effective – it uses an introductory notification to tell the caller that their party is being reached. It’s launch was also effective, it worked closely with Warner Music on a mutual campaign.

Anything else to add to this interview?
Nothing, except that it was nice to hang out with you and the Comverse team at your customer event in Miami to talk about theories of social networking and the ringback market!

A big thanks to Seamus for his willingness to put the time and effort to convert his presentation given at the Fun Dial marketing Seminar (April 2007, Miami) into an interview and share with us all. :)

Seamus McAteer of M:Metrics on the Ringback Tones' Market

Welcome to the second part of the ringback tones coverage. Today, Seamus McAteer will be visiting here. Seamus is a co-founder, chief product architect and senior analyst at M:Metrics. Seamus has covered the wireless industry since the early 1990s and has earned a reputation as one of the most respected and credible analysts in the industry. He held director and research fellow positions in several corporations analyzing internet and communications technology before founding his own wireless and telecommunications advisory services firm. He is frequently sought by the media for expert commentary on wireless, Internet and related technologies.

If you missed the first part, just follow this link.

Well, let's welcome Seamus:

Hi Seamus. Thank you for visiting Xellular Identity :) How are you?
Great, thanks :)

What are the market size estimates for ringback tones?
M:Metrics tracks use by end-users not revenues. In terms of overall usage we are talking about a service that was being used by about 9 million or so subscribers in the US in April, which is a doubling over the prior year.

How significant contributors to the overall revenue are the ringback tones to be in the future?
If adoption creeps up to about 20% in five years -- which is feasible --  then we are talking about a market with 50 million users spending about $3.50 per month if we account for increased switching and purchase of new songs etc. as people get more used to the service. Then we are talking about a market worth $2.1 billion just in the US. Not bad but still only 1% of all revenue. Ringbacks will be one component of the mobile music market which will include full tracks, music videos, video tones, and master tones. Music is a strategic priority for operators along with video, games, mobile Web, and advertising.

What are the barriers for market growth of ringback tones?
I think that the big barrier for growth in the market is marketing and education. We are getting beyond the early adopter stage where there is really significant social risk associated with use of ringbacks and people are confused when they hear a ringback and hang up. This is particularly the case among subscribers under 35 years of age. To get beyond the early adopter group there needs to be clearer marketing of the service and simplified pricing. The fact that there is no accepted consumer friendly generic name for the category is a real breather of confusion. The term Ringback is actually used as a brand name by Verizon and other operators have shied from using it.

Who are the major players?
Among operators in the US Verizon and T-Mobile, which launched services towards the end of 2004, have a lead in the market with adoption among their base of about 7%. Verizon leads on a market share basis given its substantially larger base of subscribers. Sprint is next in the market in terms of conversion with about 5% of its base.

The major players among vendors are RealNetworks through its acquisition of WiderThan and Comverse. NMS would be another major vendor in the market.

Thank you Seamus :)
Seamus will be here next Tuesday with more of M:Metrics insights about the American market of ringback tones -- so don't forget tune in!

Seamus McAteer of M:Metrics on the Ringback Tones' Consumer

Hi all,

Today I have the honor to host Mr. Seamus McAteer at Xellular Identity. Seamus is a co-founder, chief product architect and senior analyst at M:Metrics. Seamus McAteer has covered the wireless industry since the early 1990s and has earned a reputation as one of the most respected and credible analysts in the industry. He held director and research fellow positions in several corporations analyzing internet and communications technology before founding his own wireless and telecommunications advisory services firm. He is frequently sought by the media for expert commentary on wireless, Internet and related technologies.

First time our paths crossed was when M:metrics published their report about the ringback tones market titled "Ringing(back) into the year":

According to M:Metrics, the mobile market authority, while ringtone purchasing declined in Europe and leveled out in the U.S. market, a new star was rising: the ringback tone.

The mobile measurement firm found that ringbacks have grown most aggressively in the United States, at a rate of 225 percent from the quarter ended January to the quarter ended November. Ringback subscriptions grew across Europe, at a rate of 150 percent Germany and 146 percent in the U.K. during the same period. Between July and November, ringbacks grew 12.8 percent in France and 11 percent in Spain.

“The rise in ringbacks indicates that personalization remains an important motivation for mobile content purchases,” said Jen Wu, entertainment analyst at M:Metrics. “While we see a decrease in ringtone purchases, we do see an increase in user-created ringtones. Since it’s impossible to hack a ringback tone, this growing market is not threatened by piracy and end-user savvy.”

[via M:metrics]

After reading the report I really wanted to interview Seamus about it; then I was very lucky to actually meet Seamus in person and hear his presentation about the ringback tones market in the USA at the Fun Dial Marketing Seminar. His presentation was very interesting and I really appreciate Seamus' willingness to put the time and effort to convert it into an interview and share with all of my readers.

Getting to Know Seamus

Hi Seamus. Thank you for visiting Xellular Identity :) How are you?
Good… jetlagged after a trip to China, but otherwise all is well.

What brought you to the world of mobile?
I covered the mobile sector as an analyst since the mid-90s when I was with SRI International, a big technology think tank. I wound up picking up coverage of mobile data and handheld computing for a number of syndicated services which were offered by the Business Intelligence Center. I was more of a generalist technology forecaster at the Center before I fell into a specialization in mobile.

What takes up your time other than mobile?
Since I founded M:Metrics in 2004 I have had limited time for a lot of things that I enjoy outside of work. Time with friends and family are a big priority. I love to run trails in the Bay Area, enjoy studying history, and love live Jazz.

Something interesting to share with the world about you?
I have 8 sisters and 2 brothers. We are all close, like an Irish clan, and family gatherings are a lot of fun.

The ringback tones' Consumers

What is offered in this market today?
M:Metrics tracks the market for mobile content and applications in the US and leading markets in Europe. In the US about 10 operators offer ringbacks branded using various monikers such as Calling Tones from Sprint, or Answer Tones from AT&T, and Calling Tunes for T-Mobile. All of these names for the same generic category have got to be confusing for customers.

How users become aware of the ringback tones service?
Ringbacks have built in viral adoption appeal. I think that most people learn about ringbacks when they hear it when they call a friend. Awareness differs significantly by operator which shows that marketing must also have something to do with building awareness.

Who buys ringback tones?
Subscription to ringback services is gender neutral almost 50:50 male to female adoption in the US. Consumption skews young with a median age of about 28 but it is older compared with ringtone purchase, which has a median age of under 27, or listening to music loaded over the air which has a median age of close to 24. African Americans are more than 2.5 times more likely than the market average to subscribe to ringback tones.

Thank you Seamus :)
Seamus will be here next Tuesday with more of M:Metrics insights about the American market of ringback tones -- so don't forget tune in!

Ringback Tones: The Future Digital Music Distribution Channel?

"The overall value of the worldwide music industry has been in decline for several years, falling from a high-point of $39.7 billion USD in 2000 to just $32.1 billion USD in 2006." This is the main drive for the music labels to look for new outlets. One of them is the mobile music market. Lately, we have been witnessing a new marketing approach on behalf of the music labels; the ringtone and ringback tone have started to replace the old single played at the radio stations. Music labels now have been providing exclusivity for new singles mobile operators for a limited time, many times before the album has been even released.

What are the benefits of using this method?

• For the users - users are attracted to the exclusive and hot ringback tone and want to have the latest and hottest new song;
• For the operators - operators create more awareness to the ringback tones service, they generate more usage and hopefully more penetration of the ringback tones service. Also they are perceived as innovative, cool, updated with the current music… And, let's not forget that later on, after the exclusive ringback tone expires, they will notify the users and offer a new ringback tone and so on…
• For the music labels - music labels get the public to spread the word about and play the new release, i.e. increase awareness to the new song and drive sales later on when the album is out.

In Malaysia,

"pop singer Misha Omar released 2 singles as a digital single/truetone, some three months before the scheduled full album release. "This is the way the industry is moving. It looks like we will be doing it for all of our artistes," said Sony BMG managing director for Malaysia, Adrian Lim. Warner Music's new media development manager Wong Mei Chen said the company is also walking down the same path. "That's the trend that the business is going into. You'll be seeing more of that. You'll hear it as a ringtone before you hear it on radio." Wong cited examples like Linkin Park where the ringtone for the What I've Done single, which was released two months before the Minutes to Midnight album in May."

[via The Star Online, Thanks Gabi!]

However, this trend is not limited only to the more advanced Asian markets; some popular international acts are even beginning to sell more ringtones than albums: The Pussycat Dolls, for example, sold close to 80,000 ringtones of songs like "Don't Cha and Beep" while their album only sold about 50,000 copies."
[via The Star Online]

Also, In the past, I presented here another 2 international examples:

• American operator Sprint has used this marketing strategy when it offered, EXCLUSIVELY, Pearl Jam's "World Wide Suicide" single both as ringback tone (Caller Tone) and ringtone.

• And Orange France offered Johnny Hallyday's new ringback tone (Fun Tone) "La loi du silence" exclusively to its users. And here's the clip:

Seems like ringback tones might be the future digital music distribution channel. Any comments? :)

Ringback Tones: The APAC Operators Cash Cow

The Ringback tone service has been highly successful ever since its early launching days back in 2002. The first introduction of customized ringback tones was made by the South Korean operator SK Telecom with its 'Color Ring' ringback tones service. SK Telecom generated over €80 million (US$100 million) in Q2 2002 and has reached 54% of SK Telecom's 18 million subscribers in penetration. In the Asian market in general, the ringback tones service has maintained an average of 20% service penetration across the board, with some operators reporting up to 50% penetration.

Ongoing content usage is a key success factor to the strong ringback tone business case, and content consumption is also very high in Asia. Operators in the region report that customers frequently change their content to fit their mood, style, musical taste and just for fun. Nevertheless, it is amazing to witness the amazing ongoing uptake of ringback tones in APAC today:

"A leading wireless internet company in China recently published its results for Q1 2007, among them its Colour Ringback Tones service results:

Out of total revenues of US$35.14 million in 1Q 07, the Colour Ringback Tones Service’s revenues were US$3.35 M, which are 10.5% of the total wireless Internet service revenues in the quarter. This figure is an up of 45.6% quarter over quarter and up 36.2% year over year. Colour Ringback Tones revenues made up.

The company also states that the Colour Ringback Tones business “continued to increase quarter over quarter due to Chinese New Year related and other event driven promotional activities with mobile operator partners. While Colour Ringback Tones revenues increased year over year due to our expanding relationship with China Mobile's centralized music platform and continued declines in the average unit price of Colour Ringback Tones, stimulating end-user demand."

[via Sys-con Media]

As you can see, the ringback tones service has been and still is a “cash cow” for APAC operators. Hopefully will see more European and American operators reaching these great numbers as well.

Sprint: Leveraging Email Communication for A Successful Campaign

Hi everyone,

Getting back from the Fun Dial Marketing Seminar provides so many new topics to share with you :)

Today, I will review a very interesting and effective marketing campaign that basically don’t cost operators so much as above the line marketing activities (like mass advertising). The American mobile operator Sprint was facing a situation by which it had low ringback tones content downloads by existing subscribers, low awareness of people to the service and limited marketing budget.

Accordingly, the campaign’s objectives were
• To increase ringback tones downloads
• To increase number of ringback tones service users
• To increase awareness to ringback tones service

Sprint sent an email to a targeted group of 500K subscribers which constitute the ‘power users’\ heavy content services users. The reason for targeting only a certain group (and not the entire install base) was to intention to reach a critical mass of users - including “opinion leaders” – in a short period of time and leverage the viral nature of the ringback tone service. Having a core of users is what is needed to create a buzz.

This group of heavy users was offered James Blunts’ famous “You’re Beautiful” ringback tone (Call Tone) for free. The rational was to choose a famous musical track which is known to most people and “fit” wide range of ages and cultures. The drive to action was a click on link - “Try it - click on the “Download” link below” relying on impulsive buying behavior [see the image of the email]:

This simple button automatically activated the ringback tones service for those users.

The impulsive drive to action didn’t fail Sprint. In a matter of days it got an 8% of conversion rate out of the targeted recipients\population; meaning, Sprint pin pointed the “right people”. Also, Sprint witnessed an over 30% growth in weekly downloads.

In conclusion, choosing the right content and targeting to the right segment are key success factors. Also, with minor marketing investments substantial revenue can be generated.

Ringback Tone Current Market Overview

Back in 2002 was the first introduction of customized ringback tones, made by the South Korean operator SK Telecom with its 'Color Ring' ringback tones service. SK Telecom generated over €80 million (US$100 million) in Q2 2002 and has reached 54% of SK Telecom's 18 million subscribers in penetration.

In spite of the rapid growth and high penetration of ringback tones in South Korea, western operators decided to take an approach of “we will wait and see” towards the new app on the block. Having a lesson learnt about different markets behaving differently through the i-mode experience, western operators realized that not every "killer app" in Asia would necessarily stick in the USA and European markets.

Despite of the cold welcoming, today Ringback Tones is becoming one of the biggest mobile entertainment revenue generators. In some operators Ringback tones are overtaking ringtones sales. In Europe and North America there’s a 60%-80% of Ringback Tone potential end-user-coverage, 80%-90% wireless operators are expected to launch the service by end 2007, and at least one operator in each Western European countries and almost all in North America has already launched the service. Also analysts forecast a substantial ringback tones market growth in the upcoming years.

At present, most of the operators are facing various challenges in the way to increase Ringback Tones service penetration, create on going usage of content, increase the awareness and in general turn Ringback tones into a more successful service. Understanding operators' needs and challenges Comverse Fun Dial (Comverse’s Ringback Tone brand) team came up with the idea to hold the first ever marketing seminar focusing the American and Latin American markets. The Fun Dial Seminar brought together leading industry experts, Fun Dial customers and operators, (some that have already launched the service and some which are on the process of launching), as well as content providers, music labels and managed services providers to facilitate an environment of knowledge sharing and to create an open forum to discuss burning issues related to Ringback Tones.

Opening the second day, Seth Schachner, VP Latin Americas Markets at Sony BMG, presented the role of content in the success of mobile music. “Music and content are ever seeking creative new distribution channels. The wide adoption of cellular by a wider range of demographics, younger segments, music savvy’s etc’ has opened new avenues of revenue for both mobile companies as well as the music industry” He Said.

For those of you who weren't able to attent the Seminar, I will cover here some of the study cases presented at the Seminar:

• How to turn the Ringback Tone into a successful service generating significant revenue?
• Two case studies of successful Ringback Tone marketing strategies led by mobile operators
• The Comverse Fun Dial's vision on the future of the Ringback Tones service
• The current market of ringback tones according to M:metrics

You're welcome to tune in every Tuesday for a part of this series!

The B-tones Are Coming...

"Oh, did you mean Cingular's Answer Tones, 3's Dialtunes, Francetelecome's Fun Tones, or Cosmote's Calling Tunes...? And in Israel, is it Funtone (Orange) or Pleasant Waiting (Cellcom); in the UK, is it Calling Tunes (Orange) or Caller Tunes (T-Mobile)? "

-Confused?
-It's clear. There's a name problem!

To put an end to this, as well as increase consumer's awareness to the ringback tones service, we were looking for a generic name and you helped a lot by voting on our suggestions. As promissed, here are the results of the pole:

B-tone wins with 54.3% of the votes! Now our mission would be integrate the new name in our daily vocabulary. Hey, if Nokia managed to exchange "mobile phone" with “multimedia computers”, the sky is the limit!

BMI: Ringback Tone Market Streaming Up

Another player of the ringback tones eco-system reinforces the forecasts of a substantial growth for the entire ringback tones market:

“Broadcast Music, Inc. (BMI), the leading U.S. performing right organization representing more than 6.5 million musical works from more than 300,000 songwriters, composers and music publishers, today released its annual projection for U.S. ringtone sales and for the first time released a U.S. ringback tone market projection for 2007.

BMI projects that ringbacks will generate approximately $65 million (U.S.) in retail content revenues in 2007. This is BMI's first market estimate of the long-awaited rollout of the ringback tone market. A ringback tone is a musical work that is performed to the caller when they place a call to a participating mobile subscriber.

BMI's estimates are based on more than 520 million individual, detailed ringtone transactions analyzed by the organization over the past 12 consecutive quarters. BMI tracks census sales data on more than 325 outlets for the sale of mobile entertainment in the U.S.

"As we forecasted last year, the ringtone market matured in 2006. The slowdown in ringtone growth, however, was partially offset by the first wave of promising U.S. growth in ringback tones," said BMI Vice President of New Media and Strategic Development, Richard Conlon. "We believe that the ringtone market's growth has leveled off and the novelty phase has ended. We envision increased revenue opportunity in the streaming sectors of the mobile entertainment market, ranging from ringtones to audiovisual cellular phone TV-style offerings."

[via Yahoo News]

You're Invited!

Hi everyone,

I'm very happy to share a huge project that took a lot of my time for the last couple of months, and is ready for the premiere!

You're all invited to participate in our upcoming Comverse's Fun Dial Marketing Seminar at the Wyndham Miami Beach Spa & Resort in Florida on April 18-19, 2007. The one and a half day event will kick-off at 11:00 AM Wednesday and wrap up following lunch on Thursday.

The program has been designed to specifically address marketing issues faced by operators in regard to their Ring Back Tone services. Over the course of two days we will review Ringback Tones and content market trends, exchange global marketing best practices, focus on how to achieve high potential service growth and discuss 3rd party content providers management. In addition, we are excited to bring you speakers from Orange UK, Jamba, T-Mobile, Sony BMG, M:metrics and the esteemed Professor Brian Uzzi who will bring a wealth of knowledge to share.

As space is limited, please register for this event online to reserve a place until April 5th.

We believe this seminar will be of real professional value and provide an opportunity to exchange idea and information with colleagues from around the world.

Here is a preliminary seminar agenda for your review.

Celebrating Early Steps of Openness to 3rd Parties

One of the most promising strategies to increase mobile subscribers’ exposure and awareness to the ringback tones service is opening it to the content off-deck market; i.e. to enable 3rd party retailers and content providers to offer ringback tones content at their portals. This way, there will be more places for users to acquire ringback tones, they could buy them both at operators’ portals and at the content aggregators’ own websites.

Telenor just launched a few days ago its new ringback tone service called Ventetoner which has been enabled for roll out by Telenor’s 12 operating companies across Europe and Asia. The novelty in the current launch is the new technology which lets third parties sell ringback tones that work on the Telenor network. As far as I know (and feel free to comment and correct me if I'm wrong), the precedent of this kind of cooperation belongs to Jamba, a mobile content aggregator, which started a few months ago to promote T-mobile’s and Vodafone’s ringback tones in its German website; but still, at this early stage, every mobile operator that aquires the technology to enable 3rd parties promoting ringback tones is a cause for celebration.

If you're curious to now just how powerful this strategy is and how it helped Jamba and T-mobile to increase their penetration numbers, both T-mobile and Jamba are going to present their success stories at the upcoming Ringback Tones Marketing Seminar in Miami at the 18-19th of April. For online registration to the Seminar, follow the link. Also you can contact me for more information and agenda.

Tell Me Where You Are With Your Ringback Tone!

Usually, when you think of ringback tones you think of music played while waiting for the other side to pick up the phone and answer the call. But there's more to ringback tones than that! I have already covered in the past some study cases of operators who took the ringback tone to the next level with very creative types of content which are not necessarily music. What I haven’t thought of before is using the ringback tone to let your caller know your location!

The Broadband in India blog brings the following story of the Telecom Regulatory Authority of India (TRAI) which “has also told the mobile companies to provide a special ring back tone to the calling party when a person is on roaming. This would benefit them as the caller would realize that the person he/she is calling is not in his hometown. TRAI said in its statement: “Mobile users can activate this facility before going abroad. This will enable minimizing calls when on international roaming, if the calling party exercises restraint.”"

[via Broadband in India : India Broadband and Telecom Blog]

I really hope to see more creative ways to leverage ringback tones to provide better services for the ringback tones users. Nice work!

A Jump Into the Future - Multimedia Ringback Tones

Hi everyone,

Today I wanted to share with you a new and sexy service that according to one of the Product Managers at Comverse will be the natural evolution of the ringback tones. To do things right, I'll begin at the top :)

Once, there was no choice but to hear a dull ‘ring ring’ when you waited for your friend to answer the phone. Now, follow this carefully: Tomorrow, you place a video call to your friend. Suddenly the amazing top hit by the new hip-hop group The Beatz will fill your mobile screen. You are enjoying a great top 10 video clip until your friend answers the phone. Wouldn't that be a better way to wait?

The Multimedia ringback tone takes the very popular musical ringback tone service to a whole different dimension, from the audio space to the visual video clip arena. It allows you to enjoy watching a video clip while placing calls, as well as to entertain your callers with video clips to watch while calling you.

Sounds great? I haven't said the final word yet, which is content. There are 3 types of optional content:

• Users' content - music clips, Klonies customizable avatars, self generated content, corporate content... All depending on the segment.
• Operator content - branding (logo), promotion info, operator prompts.
• Advertisement - advertisers fund phone bills in return to placing ads at the multimedia ringback tones space. Less desirable for the callers, but it's an option.

We all know that personalization is a key growth engine to mobile services and applications and it will probably keep being a key factor in the future. Having said that, the multimedia ringback tone leverages the ringback tones' success and promotes the video arena\ tusage of 3G. It harnesses the human need to self express and provides a new and creative outlet for that. Smart!

What are your reactions?

Ringback Tones TV Commercials

Hi everyone,

Today I decided to address another aspect of marketing, a mass communication marketing activity, i.e.TV commercials. To me, it is very interesting to see commercials from different mobile operators from around the world and look which aspects of the ringback tones service each one chooses to present.

For your convenience and fun, I'm adding here each commercial as I cover it, so you're welcome to read, watch and enjoy :)

The first commercial comes from Orange Israel:

What I liked here is that Orange presents how an ordinary and dull 'ring ring' sound can be replaced with a much more fun tone (which is actually Orange Israel's name for the service). The commercial doesn't take us to the mobile arena literally, rather displays a metaphoric example of anther dull 'ring ring' situation of a young guy pressing the door's buzzer and waiting to be answered.

The second commercial comes from T-Mobile Czech Republic:

Here, T-Mobile empowers the ringback tones subscriber - he can change the caller's mood by playing a fun dial tone...

The third commercial comes from Hutch, India.

Here, Hutch emphasized personalization. As a ringback tones subscriber (or Caller Tunes) I can set different tunes for each of my friends, so they all enjoy while waiting for me to answer. Like the first example of Orange, Hutch doesn't place the commercial at the mobile arena and we get to link the metaphoric example to the Caller Tunes service later on.

The fourth commercial comes from Cosmote Greece:

[For some odd reason, at YouTube there's no sound, so you can download the video from here as well]. What I liked here is the suspense the commercial puts you in. Everyone calls Yargo - but why? This commercial also empowers the ringback tones subscriber, he\she becomes popular since everyone wants to dial his\her number...

Well, I hope you enjoyed it. If you come across other commercials, feel free to send over the links or post them here as a comment :)

Ringback Tone Marketing: Make RBT a Top Revenue Generator

Today, the ringback tone is becoming one of the biggest mobile entertainment revenue generators. In some operators Ringback tones are overtaking ringtones sales. In Europe and North America there’s a 60%-80% of ringback tone potential end-user-coverage, 80%-90% wireless operators are expected to launch the service by end 2007, and at least one operator in each Western European countries and almost all in North America has already launched the service. Also analysts forecast a substantial RBT market growth in the upcoming years.

At present, most of the operators are facing various challenges in the way to increase Ringback Tone service penetration, create on going usage of content, increase the awareness and in general turn ringback tones into a more successful service.

Understanding operators' needs and challenges and after the great success of the first Fun Dial Marketing Seminar in Budapest last year, we, the Comverse Fun Dial (Comverse’s Ringback Tone brand) team, will hold the first ever public seminar in Miami USA on April 18th-19th, solely focused on marketing. The Seminar is targeted for all players in the ringback tone eco-system, i.e. mobile carriers, record labels and content providers. TThe main focus of the seminar is sharing best practices, success stories and key success factors with the RBT community.

If you're interested in taking part in this event or sponsor, please contact me.

Enlarging The Pie

According to Cellular News, the mobile content and services market will continue to grow dramatically as services and applications reach maturity and new services begin to gain traction, and the value of the mobile entertainment market, including music, games, TV, sports and infotainment, gambling and adult content is forecast to increase from $17.3 billion in 2006 to nearly $77 billion by 2011, while content aggregators are fleeing the ringtone dance floor and struggling to look for new ways to increase mobile content consumption.

The latest vendor is Moderati, a Santa Monica, California-based ringtone provider. The company has announced that it has been acquired by Bellrock Media, a content company with operations in the in the United States and Japan.

Content Providers should work together with the operators so they could have a better offering for the consumer. What I mean by this is, for example to offer bundle of a ringtone, ringback tone, a video clip and a wallpaper of the hottest music artist on the neighborhood. This enlarges the pie and each player's share of the pie. So everyone wins eventually.

Let Your Voice Be Heard - Vote!

"Oh, did you mean Cingular's Answer Tones, 3's Dialtunes, Francetelecome's Fun Tones, or Cosmote's Calling Tunes...? And in Israel, is it Funtone (Orange) or Pleasant Waiting (Cellcom); in the UK, is it Calling Tunes (Orange) or Caller Tunes (T-Mobile)? "

-Confused?
-It's clear. There's a name problem!

To put an end to this, as well as increase consumer's awareness to the ringback tones service, there's a new search for a generic name. We hope one of the following will replace all the operator-related attempts to create a brand name for the service -- but we want YOU to make your stand!

Please vote:

I'll run this pole until the end of February and then publish here the results. Thank you for your participation! :)

Also - if you have other ideas for a name - please write a comment.

Prepaid Ringback Tones

Today I want to present a very creative strategy for marketing ringback tones and ringtones: the Fun cards.

Hutch is advertising new Fun cards for ringtones, Caller Tunes and a card for Caller Tunes Shuffle. These cards have a 16-digit code which users can buy in shops. There is a wide selection of cards with different tones. After taking the time to choose, users scratch the Fun card for the code and SMS it to 123. Within seconds, they will receive the ringtones or the caller tune they had requested to play on their Hutch phone.

What's in it for the mobile operator you ask?

First, and most important, the Fun cards marketing strategy enables impulsive purchase of ringback tones (i.e. short decision making and leveraging the need for immediate gratifications). Second, it increases ringback tones’ visibility in points of sale. Third, it positions Hutch as an innovative, creative, dynamic and cool mobile operator.

Also, this form of buying ringback tones enables a subscriber to purchase a Fun card for any other mobile subscriber, friend or family and give it as a present. And you can always use it yourself :)

To view Hutch's ad click here

Interviewing John White on Digital Music (Part I)

I'm happy to welcome John White from Portio Research Ltd to review the market of mobile music here at Xellular Identity.

John White is Business Development Director for Portio Research and has over 17 years experience in the technical publishing industry. Working in the IT sector previously and in the telecoms industry for the last 9 or 10 years, John has extensive experience in the mobile sector. John has been Editor and contributing author for the newly-released Digital Music Futures 2007-2011 report. 

So first, let's meet John:

XM: Hi John. Thank you for visiting Xellular Identity :) How are you?
JW: Hi Xen, thanks a lot, I’m doing great thanks, I hope you are too?

XM: I'm great thanks, great things are happening lately! What brought you to the world of mobile?
JW: I spent a lot of time working in IT and publishing, and I came into the world of mobile through that route about 10 years ago, as a publisher.

XM: What takes up your time other than mobile?
JW: Mostly my three kids, but also my wife, my dog, running, kung-fu, a lot of reading, a bit of rock climbing, fixing up the house, trying to keep my family as ‘green’ and environmentally friendly as possible, enjoying watching lots of movies and many more interests besides…when my children allow me time for them!

XM: Well, heading going to the music market, what are the estimates for mobile music market for the next years?
JW: Overall, we forecast 5 or 6 years of healthy growth for the entire digital music market. How much of that market is mobile will depend on a number of key factors, not least price.

XM: The guys at Mobhappy predict that: “Full-track music downloads over mobile will largely fail, leading operators and content providers to finally realize there are other aspects to mobile music”. What do you think?
JW: Reading that article, I can only agree that IF price and user-friendliness are not sorted out, full-track OTA downloads will never take off as a mass market service. Operators and record companies need to work together to set the price at the right competitive level to stimulate demand. OTA downloads cannot command much of a premium over wireline downloads, as the value-add is pretty minimal. Maybe some teenagers may think that downloading the latest music track from a certain artist is an essential activity that cannot wait a few hours, and so those few may be prepared to pay a substantial premium for the service. But, for the majority of people, if an OTA download is twice the price or five times the price of the same track bought online using a wireline connection, then most people will be happy to wait until they are at home and can download the track for much less. With iTunes setting the $0.99 USD / £0.79 GBP price point as an industry benchmark, we believe that MNOs will be limited to pricing OTA downloads in the $1 to $2 Dollar (approx £1.50 GBP) range in order to remain competitive. MNOs may think this sounds low, but if it successfully stimulates high demand and the MNOs then manage to win considerable market share, establishing themselves as a major route to market for record companies, then the prices should lead to a solid boost to ARPU through growing volumes of downloads.

XM: Lately, I hear many speak about the decline in the ringtones market, is this correct? What is the reason for this trend? What about ringback tones?
JW: Yes, we believe so - let’s face it, if full track downloads are priced at only 1 or 2 dollars, who will want to pay $5 bucks for a ringtone? Of course, we do not forecast instant overnight destruction of the ringtone industry, no, as there will still be huge (and growing) demand in markets where music download services are not yet available. Ringtones and ringback tones will continue to grow in the huge Asian markets (China, India, Thailand, Bangladesh, Pakistan, Indonesia, etc) and in other regions, but in 3G markets such as Western Europe, as OTA music download services proliferate, ringtone prices will surely collapse. Demand for ringtones will diminish in these regions over the coming years.

XM: How does the mobile music industry affect the global music market?
JW: The overall value of the worldwide music industry has been in decline for several years, falling from a high-point of $39.7 billion USD in 2000 to just $32.1 billion USD in
2006. However, we believe that the value of the global music market is set to reverse and grow again back to $38.8 billion USD by 2011. The reason for the growth in the market is the increased consumption of digital music. Revenue from physical sales of music (CD singles and albums) will continue to decline, but the value of digital music will grow over the coming years. Mobile will contribute to this growth, but as mentioned previously, it all depends on getting the price and marketing right.

John White will be here next Thursday for more talkin' about the music market. If you can't wait, you can read more info regarding the report on Digital Music Future by Portio Research, you can follow the link.

Thank you John and see you next week! :)

Creating New Outlets For Mobile Music

Music labels and content providers are looking for new outlets to offer mobile content like ringtones, video clips, download full tracks etc'. Last week I read about two new business partnerships:

1. "Sony BMG Music Entertainment and Warner Music Group have partnered with a joint venture operating in China that develops technology for distributing music downloads and other content to mobile phones, the record companies said Tuesday. The [Chinese] company makes software through which mobile phone users can dial up digital content such as ringtones, listen to streams of audio like podcasts, or download full-length songs. [...] Those are the platforms we're hoping to launch with some of the operator partners," said Thomas Hesse, president of global digital business for Sony BMG. "The fact that you've got the music companies supporting this, we believe, is going to strengthen the chance of those platforms being successful."

   [via Cellular News]

2. Groove Mobile has announced a partnership with Universal Music UK to build and operate an "off-portal" mobile music store. Through this partnership, UK mobile phone users on any UK wireless carrier will have instant access to full track downloads from Universal Music UK's extensive catalogue via SMS short codes from their mobile phones. [...] Universal Music U.K. is leveraging the Groove Mobile platform which runs on a majority of the world's music phones in order to provide consumers with the robust downloads they have come to expect when using today's 3G networks," stated Adam Sexton, Chief Marketing Officer of Groove Mobile."

[via Cellular News]

Mobile operators should wake up and seize the opportunity as well! And this is how

Orange UK: Ringing Up Xmas Tunes

Orange UK made a special Christmas campaign and was the first campaign for its Calling Tunes service since the service was launched in November 2005.

The campaign was launched during December, and offered the free Christmas Calling Tune to all of Orange UK users. Customers were sent either an SMS or an MMS promoting the offer, which could be adopted by either visiting the Christmas Grotto section on Orange World or by dialing a given number.

If you missed it (or you live elsewhere) here is the campaign's text:

Hi from Orange. Calling Tunes are snippets of music accompanying the usual ring-ring callers listen to while they wait for you to answer the phone. As it’s Christmas we’re giving away the Calling Tune ‘Merry Christmas Everyone’ for FREE. Just go to the Christmas Grotto on Orange World or call 477 (10p/call) and type in the quick code 20550 Keep togetherness going. Terms at orange.co.uk/xmastune

And here is the given Calling Tune.

Orange UK saw amazing results which crowned this campaign to one of its best campaigns. This makes you think - how does it work?

The medium of SMS\ MMS encourages spontaneous decision making on behalf of the users; it takes them only a few seconds after reading an SMS\ MMS to decide whether to delete it or to act accordingly. Campaigns of this kind need to cope with the implosive decision making upon receiving the SMS\ MMS notification, so in order to raise the amount of joining users - the offer should be irresistible. You’d have to agree that receiving a free Calling Tune is definitely of such nature for most users. Also, to increase success the message needs to be tied to the basic need for instant gratification; in this campaign it was the Christmas spirit and the need to celebrate and belong.

And a final note about impulsive buying: impulse buying can also occur when potential users spots something related to a product that stirs a particular passion in them, such as favorite sports teams, music artists etc’, and there are great examples of this kind as well.

Do’s and Don’ts To Promote VAS On The Web

Today everyone is talking about viral marketing methods and the importance of a good PR agency... I was going through a few operators' websites and realized that while there are many good examples of web marketing, many operators don't really use their websites to build users' awareness to VAS. So here is my list of 'Do's and Dont's' to promote your ringback tones on the web (you can use it for other VAS as well):

1. Think of your users in everything you do

Some users probably don't know what a ringback tone (Caller Tone/ Caller Tune/ Answer Tone/ Funtone) is, while others never have set it before and need a simple and clear explanation how and where to set it. Some users were looking for something else at the operators' websites and made an impulsive decision to buy while others know what a ringback tones is and entered the website with a planned purchase. Keep in mind that you need to address all these different scenarios and more.

When Verizon Wireless’ users enter Verizon Wireless’ website they see a menu containing a list of features (Music & Tones/ Video/ Wallpaper etc). Also they see a short description of the ringback tones service.

There is a high correlation between content rank and number of selections. So being taken to the “Top 10” lists when pressing on the “Music & Tones” section is smart.

Also note the “What’s Hot” section - there are featured artists like Justin Timberlake and Christina Aguilera which leads me to the next tip:

2. Leverage existing consumer behavior

Justin Timberlake's or Christina Aguilera’s fans would be driven to press the link and look for any available content, whether it is a truetone, a ringback tone, a wallpaper or a video clip. Operators should leverage the emotional involvement with the artist and the existing user behavior to drive the need and drive the impulsive purchasing to download new content.

3. Bundle ringtones, ringback tones & other services together

When a user selects one of Christina Aguilera's ringtones offer (pop-up window or other way) her ringback tone as well. Other ideas for bundling content: 2 for 1, ringtone + ringback tone + wallpaper etc'.

4. Use of existing communities’ assets to promote services

Emotional involvement with the Manchester United soccer team for example, drives the fans' need to download. It also acts as a trigger for impulsive buying. Look for existing communities’ assets to promote your service.

5. Keep it short and simple

T-Mobile's users need to go through a lot of web pages to get to T-Mobile's mobile content.

Also, T-Mobile's users need to go through a lot of text to understand what a CallerTune (ringback tone) is and click through many web pages to get to the song catalogue.

I hope you find the insights I’ve shared here of value... :) Also you're MOST welcome to share your reactions/ thoughts/ ideas/ experience...

Get Yourself An Exclusive Ringback Tone

Many people just stick to the old (and beloved)… You probably know many people that rarely change their ringback tone. This can be very annoying especially if they are friends that you call very often. But it can be also annoying for the mobile operators :) and that is, apart from being users who don’t download and pay for new content…  The consequence of sticking to the old ringback tones (for the operator) is having a long tail of old content that each item has so very few subscribers. Obviously operators want to keep their ringback tone catalogue (and ringtones catalogue) fresh, under constant updates and have many subscribers for each item.

One of the ways to improve the described situation is exclusivity. Music labels give mobile operators exclusivity for new singles for a limited time. Users are attracted to the exclusive and hot ringback tones and happily leave behind the old (and unpopular) ringback tone. Thus they enable the operator to take the old songs from the system and make room for new content. Later on, after the exlusive ringback tone will expire, the most probable (and desirable) is that the users will get a new ringback tone and so on.

Implementing this strategy, American operator Sprint received the exclusivity for the first single "World Wide Suicide“of PEARL JAM's self-titled album to be offered both as a ringtone (Call Tone) and as a ringback tone. Sprint also offered their users a contest for live show and handsets that include PEARL JAM's special fans content. Also Orange France has used this marketing strategy and offered Johnny Hallyday's new Funtone "La loi du silence" exclusively to its users. For a snip check this video.

Jamba: 3rd Party Players Promoting Ringback Tones

Last week I was talking about the need to increase mobile subscribers’ exposure and awareness to the ringback tones service by opening it to the content off-deck market; i.e. to enable 3rd party retailers and content providers to offer ringback tones content at their portals. The outcome will be more places for users to acquire a ringback tone (both at operators’ portals and at the content providers’ own websites).

When the ringback tones service was launched for the first time ever in South Korea back in 2002, both operators and 3rd Party players made their own heavy promotion. This was one of the main reasons for the high user penetration rates the ringback tones service hit in those regions.

Today we have a great example of first steps taken in this direction. Jamba, a mobile content provider, has started to promote T-mobile’s and Vodafone’s ringback tones check out this video). For now, the figures are very promising and if this cooperation will succeed, this model will be implemented in other markets as well.

Let’s hope this will encourage more operators and content providers to join hands and work together to promote the ringback tones market.

   

Ringback Tone Market Challenges (Part II)

Last Tuesday I was reviewing the challenges which the ringback tones market has been coping with. If you missed it, here's the link, and in short:

On one hand:

• After a tremendous success in Asian markets, ringback tones are starting to have wide availability in other regions of the world.
• Most operators already offer a ringback tones service.
• Analysts are forecasting ringback tones market growth.

On the other hand:

• Ringback tones subscribers forget to re-purchase content.
• Operators can’t afford to promote the service on the long run.
• Ringtones’ success hasn't been leveraged.
• There is no ringback tones generic brand.
• Content providers are not “incentivised” to push ringback tones.

At Comverse we believe that this can and needs to be changed. Comverse's vision is to open the ringback tones service to the content off-deck market, i.e. content aggregators (like Jamster,Blinko, Moderati etc'), content providers (like MTV, Warner Brothers etc') and music Labels, regardless of platform vendors. The Cross network openness will enable 3rd party retailers and content providers to offer ringback tones content at their portals. The outcome will be users' ability to register and purchase content both from the operator and the content providers own portals.

By doing so, it increases mobile subscribers’ exposure and hence awareness to the ringback tones service and contributes to generate substantial additional revenues for both operators and content B2C players, thanks to more ringback tones users and more ringback tones downloads. In other words, all players need to join hands to promote the ringback tones content.

Ringback Tones Market Challenges (Part I)

After a tremendous success in Asian markets, Ringback Tones are starting to have wide availability in other regions of the world, such as Europe and North America. The ringback tones market is also driven by the disposable incomes rising in China, India and Indonesia. Overall, today, most operators already have a ringback tones service and main mobile industry’s analysts are forecasting that ringback tones global demand will continue to increase in the coming 5 years.

However, Mobile operators, persistently looking for new sources of revenues and ways to increase their subscribers’ loyalty, are constantly launching new services and applications. As a result, in many cases, after launching new applications, operators are finding it challenging to focus on the promotion of the service in the long run. Therefore, operators might face scenarios in which the service reaches stagnation penetration wise but also and especially in terms of usage.

On the same time, with an increasing amount of the Value Added Services (VAS) markets moving off portal, different players in the content value chain (content aggregators, content providers and music labels) have taken over both, the responsibility of marketing services to users and as a consequence, part of the revenues they generate. So far, due to technological constrains, this has not been the case in the ringback tones market.

Taking a look at the ringback tones users, there is relatively low consumer awareness to the ringback tones service, partly because there is no ringback tone generic brand. Many subscribers forget to re-purchase content and need to be constantly reminded about their ringback tones since they never hear it. The more ringback tones will be advertised and its access simplified, the more the number of users registering to the service will grow and the more purchasing ringback tones will become a frequent habit. But operators can’t afford to promote the service on the long run.

Taking a look on its older brother, the ringtone market has had a huge success but so far this success hasn't been leveraged to push the ringback tones service. Unlike the ringtones market, content providers are not “incentivised” to push ringback tones.

Comverse's vision for the future of the ringback tones market is to implement the lesson of the ringtones market success, to promote the ringback tones market. I'm sure you're all curious about what it really means and how it can be done - so tune in next Tuesday for that :)

Holiday’s Specials (part II) - Special Events to Promote Ringback Tones

the iPod, accompanied by portable music devices and music accessories were and still are among the most popular Christmas presents. No wonder why Microsoft chose this timing to launch its new Zune

Other players in the music industry have realized that the holiday season in the best timing to increase users’ usage -- You got that one right -- mobile operators. Many mobile operators offer one of my favorite ringback tones features which is the ringback tone gift. This feature enables a subscriber to purchase a content item for any other subscriber and send it as a gift. The gift content item will be included in the personal play list (gallery) of the recipient subscriber and an appropriate notification will be sent to both the sender and the recipient announcing the successful delivery of the gift. If the receiver of the gift hasn’t been subscribed to the ringback tone service he\she will need to activate his\her subscription to the service in order to use the given ringback tone.

At Comverse, we know that about 45% of ringback tone gifts recipients choose to receive the ringback tone gift and activate the service. One of the strongest motivations of this behavior is the trust users have in their friends. In other words, the difference between accepting a gift from a friend and accepting a gift from a commercial entity is confidence.

Having said that, there is one challenge for operators (after acquiring the ringback tone gift feature). The challenge is to educate their users to buy and send ringback tones as gifts, since this feature increases users’ usage of the ringback tones service.

Phil Taylor on The Mobile Music Market

After getting a few email inquiries I decided that the Mobile Content arena could be a great topic for December's coverage. Searching for industry experts I got to know Phil Taylor, a director at Strategy Analytics, an analyst and a regular speaker at industry conferences. Phil will be visiting Xellular Identity and will talk about the mobile content market every Thursday during December (each week on a different service). You don't want to miss it!

Let's welcome Phil :)

Hi Phil, thank you for visiting Xellular Identity :) How are you?
I’m great thanks. Too busy to feel very festive yet, but certainly looking forward to the Christmas break ;)

What got you interested in mobile?
I started off in general telecoms research and gravitated towards the area with the coolest gadgets! Even though a lot of analysis is very technical and/ or business oriented, almost everyone is interested in mobile phones, what they can do and how much they are paying. I like being in a field of research where developments are taking place so rapidly. Although keeping ontop of it all can be a major challenge.

What takes up your time other than mobile?
I like to spend time in the great outdoors. Not always easy when you’re living in central London. I particularly like rock climbing and mountaineering and wish I had more time for them.

Something interesting to share with the world about you?I share my name with the World’s best darts player, Phil ‘The Power’ Taylor. I’m thinking of changing my middle name to ‘The Power’ as well. I kind of like it!

Mobile Music

What are the market size estimates for mobile music?
We think that the market for music services that are distributed over the cell network will be worth roughly $2.6 billion globally in 2010. This doesn’t include personalization products like ringtones or ringback tones however.

A lot of 3G music services have come to market that focus on over the air delivery. Although there are a few exceptions, most of these are struggling to drive sales volumes due to the price differential with online music stores and poor relative usability.

What are the latest developments in the mobile music market?
A couple of developments are taking place. Price competition is taking place, with operator stores starting to drop track prices from €1.50 down to €0.99, or bundling tracks into music oriented subscription packs. At these kinds of track prices, over the air (OTA) music delivery is a zero profit margin service and many carriers are accepting that offering music is less about profit than about branding, providing a use case for 3G, providing value to customers and (hopefully) attracting some customers from other networks.

Who are the mobile music consumers? What is their buying motivation?
People that buy music OTA are certainly not price sensitive, or if they are then their sensitivity is being overridden by a must have now element to their purchase. We think that OTA track downloads are primarily a substitute for spend on CD singles with sales being driven by younger age groups.

What are they dissatisfied with?
Usability of services remains a problem, particularly for services that have not taken a client based UI approach to delivery. High prices, relatively low on-board memory of phones relative to dedicated MP3 players and restrictive DRM are other problems that we hear consumers mention a lot.

What is the future of the mobile music market?
We think that mobile phones are increasingly well positioned to act as media/ music players but that the cell network is not necessarily going to be the mechanism of choice for getting tracks onto the device. Operators need to add allow users the choice of OTA or delivery to the PC and then upload to their mobile from there. This is what Verizon Wireless is now doing with its V Cast Music service in the US and we believe that this approach positions operators best to drive sales volumes and ultimately give consumers what they want.

What are the challenges operators need to face with in this market?

Mobility is not going to command the premium that operators are asking for. Users don’t appreciate that the transport costs and premium charges are tied together in these price points of €1.50 plus per track, they just compare it with the €0.99 they know they can buy the track for on iTunes or from other online music retailers. I think that operators will ultimately have to separate the transport and premium charges again and use this as a means of up selling users onto flat rate price plans or transport plans that are priced specifically for use with music services. In Canada for example, Rogers Wireless is making a podcasting service available. No premium charges are imposed but a $5 per month flat transport charge is required to consume this bandwidth hungry application. The X-Series announcement from 3 last week is a similar example of operators trying to set flat rate transport plans against specific services. Minimizing their exposure to potentially high backhaul/ bandwidth costs then becomes the challenge.

Any examples of marketing best practices?
I’ve already mentioned that we think that V Cast Music is a good example of an operator that’s taking a different distribution and pricing approach to the majority of carrier music download services. It provides choice for its consumers, who can upload tracks from the V Cast catalog to their mobile via PC or via the cell network. What is just as important is that the price for access via PC is competitive with other online retailers, with tracks sold at $0.99. Over the air delivery is more expensive, and rightly so.

Thank you Phil for being here today!

Don't forget to tune in next Thursday for the second part of the mobile content coverage. Have a great weekend!

Holiday’s Specials (part I) - Holidays' Offers

With the holiday’s season in sight, this month I’m going to cover a few case studies of mobile operators’ success in leveraging the holiday season to promote their ringback tones services.

The holiday season has always been a great time for operators to promote their mobile services and mass activate them. Today, I want to bring 3 examples of ‘holiday’s special ringback tones offers’ which leverage the holiday spirit to promote the ringback tone service.

This Christmas, the American operator Cingular gave its users 3 free Christmas ringback tones (Answer Tones). Giving a free trial is one of the best ways to expose users to new services; However, Cingular provided its users with 3 ringback tones. -Why 3 ringback tones? -First because 3 different ringback tones made sure that users would find at least one suitable ringback tone for then and adopt the new service. Second, because Cingular hopes that users will download the 3 items and later on, after the holiday season is over, the need to change the ringback tone will become relevant for all the subscribers and all 3 items(!).

Amena (Orange Spain) distributed cards at points of sale and hot spots which promote local theme tones during special events and public holidays (like Fallas in Valencia, Feria de Abril in Sevilla etc’). Users just needed to send an SMS to get the free ringback tone (DiverTONO). You can see the pics here.

 

And, in order to get the New Years Eve special holidays’ ringback tone (of 2006), T-mobile Slovakia’s users were asked to send an SMS to the number ‘2006’. That was a very easy number to remember!

All three operators mentioned here understood the importance of timing, i.e. the holiday’s season, to massively promote their ringback tone service with a suiting holiday tune (which later will be needed to replace hastly).

Turkcell: Enriched Ringback Tones Offering With Non-Music Content

When you think of ringback tone, the first thing that probably pops into your mind is a personalized music played when you wait for the person called to answer. However, Turkcell (Turkey) has widen its ringback tone offering thanks to a creative thinking of what can be nice to hear while waiting.

But first - some details about Turkcell:
Turkcell is the 3rd largest mobile operator in Europe in terms of number of subscribers. Turkcell is the market leader with 62% Turkish market share, which are 29.8 million users. Turkcell has launched its ringback tones service in March 2005, based on Ericsson hardware and ECT software.

Turkcell’s ringback tone service, “ÇalarkenDinlet”, or in English - “make them listen while ringing” is the biggest ringback tone service in Europe, with more than 2 million active subscribers(!). It is also the most popular and most successful value added service of Turkcell.

Turkcell enriched its ringback tone portfolio with many creative non-music content categories (apart to a wide selection of music); one of the categories offered by Turkcell is the Status ringback tones with 20 different situations of the called person (in a restaurant, taking a shower, in a meeting, watching a movie, driving a car, etc’ - influenced by the IM??). Other category is the Horoscope ringback tones allowing your caller to hear their horoscope while waiting. Other kind of ringback tone offered by Turkcell is the famous football matches moments (what do you think about that, boys?). Last, for its launch, Turkcell used its most powerful content category of Funny Quotes and its viral effect (you can see the ads here). As for its advertising strategy, Turkcell uses new content as the reason/cause to advertise and promote the ringback tone service.

Turkcell is a great example how “thinking out of the box” can help operators build a creative and wider offering which attracts many more users to the service. And I’ll end this post with a very nice inside story from the Worldwide Ringback Tone Marketing Seminar initiated by Comverse. During the Marketing Seminar, operators were asked to present their ringback tone services as study cases of successful marketing strategies. One of them was Turkcell’s presentation of the reasons for its ringback tone service’s success. Today we know that one of executives participating at the Seminar liked so much some of Turkcell's insights that he went back home and persuaded his management to implement them! This is a sure proof that the Comverse Seminar brought real value to the operators who attended.

Leveraging Ringback Tone's Coolness

When we ask ringback tones users why they like the service, the most frequent answer by far is because "it's cool". So, I tried to understand what “cool” is and how operators can leverage this quality. According to Wikipedia:

“Cool is in popular culture, it is an aesthetic of attitude, behaviour, comportment, appearance and style. Because of the varied and changing connotations of cool, as well its subjective nature, the word has no one meaning. It is very frequently used as an expression of admiration or approval. A great deal of literature has been committed to understanding the concept of cool in societies.”
[via Wikipedia]

Being cool is the goal of almost every teenager around the globe because being cool, deep down, means belonging to a peer group. Music usually goes a long with ‘cool’, since it is also a very powerful social tool, especially for teenagers - or in Jan Kuczynski’s own words (in an interview a few days ago): “music gives them something to talk about, social status from knowing about the newest and coolest bands and the type of music you listen to can even define which social group you belong to. Firstly, youth can only use music as a social tool if it’s up-to-date, so unless youth constantly put feelers out to explore new music, they get left behind. Secondly, teens like to display their music tastes - whether it’s through their CD rack, their Coldplay t-shirt or simply by turning up their headphones so everyone can hear. Thirdly, youth like sharing music as it earns them social currency and reinforces peer bonds - that’s why teenagers spend time and effort burning compilation CDs for their friends.”

Marketers, on their behalf, try to promote their product\service as cool and as THE source for coolness to its owner, i.e. owning X makes you cool in the eyes of others. Also, many mobile operators, such as TRE Sweden or T-Mobile Czech Republic for example, have realized that music is something that everyone, and especially youth, can relate to and is considered as cool. Thus, they have defined music as a strategic asset they want to leverage, which allows them  to promote – among other music services - their ringback tone services.

Hopefully, in the future ringback tones will be part of a total music/entertainment experience: users will pay a subscription fee and will be able to download in one click a package or X packages a month, that will include a true-tone, a ringback tone, and even a video clip of their favorite song or artist.

This naturally leads me to THE question "what is the future business model of the music industry" and more about that next Tuesday so don't forget to tune in…

Ringing Up Business - Orange Israel Case Study

The second case study of successful Ringback Tone marketing strategies led by mobile operators will be the example of Orange Israel with its successful practice of smart segmentation.

Orange IL is one of four mobile operators in Israel, having 32% of market share which are ~2.58M users out of population of 6.98M. In Israel, the total of mobile subscribers is 7.9M, which are 113% of the total population.

Orange has launched its Funtone service (Orange’s commercial name for ringback tones on the Comverse Fun Dial Platform) back in August 2003, being the first operator to launch the ringback tone service out of Asia. Having a strong believe in the service’s potential and being a major service in the company’s portfolio, Orange relaunched the service in September 2005 in order to gain higher users’ awareness and more penetration.

One of the brilliant ideas Orange had, and which I want to focus on, is to look for defined segments that have the higher value and the most effective viral influence. Orange has managed to increase its revenues by leveraging its current ringback platform and by providing a wider offering. Orange spotted the business segment as a higher value segment and provided its business customers with a suiting offering. Orange’s business customers are invited to change the normal dial tone with a corporate ringback tone. This simple idea turned the ringback tone to be another channel to reach a wide audience for big advertising campaigns. While big sized companies use the corporate ringback tone as another channel of advertising, small and medium sized businesses, which have smaller budgets for advertising, use their company’s ringback tones to position themselves as creative, dynamic, cool and promising companies. To get an example of what I’m talking about here, you can check Orange’s online business ringback portal and try some of the ringback tones.

To summarize, a simple approach like market segmentation together with creativity are very effective. Also, they made Orange’s business ringback tone offering into a successful service.

A special issue focusing on ‘how to turn a mobile service into cool’, with examples from the ringback tone market, will be published here next week so don't forget to tune in next Tuesday!

And to leave a good taste in your mouth, here is a cool ad of the Funtone, courtesy of Orange Israel. View Orange.mpeg

Don't Let Your Private Life Hang Up By Your Career

These tips for job applicants concerning your mobile self expression were caught in one of my news alerts:

"Your cell phone is ringing. If you are job hunting, the person calling may be your future employer. If it is, you have obviously impressed them with your application or stellar resume -- you don't want to ruin your chances by handling the call unprofessionally.

"In recent years we have found a majority of applicants list only their cell phone number for direct contact. However, some applicants are too casual when using their cell phones. Often, recruiters are greeted with voice mail messages that should never be heard by a prospective employer."

"While the latest trend is to personalize your ringback tone with the hottest music download, usually it does not reflect a professional image. Your friends and family may enjoy listening to your favorite song before you answer, but a prospective employer may not."

"Select an appropriate voice mail message. Keep it short and include your full name so the prospective employer knows they have reached the correct applicant."

[via KOTA]

The article describes the inevitable encounter of the professional and private spheres. While it advices to pretend that we don't have a private life, I think that if someone calls my personal mobile phone, it is only natural for the caller to be exposed to private aspects of my life\personality.

Very popular online news narrative is the story of applicants who weren’t hired due to facts\personal opinionswritten in their personal blogs\mySpace profiles etc'. Also, many experts advice us to be very careful with what we put online. While I agree that we should think before publishing personal content online -- if someone knocks on my door in the middle of the night, why would he\she be surprised to find me in my polka doted pajamas?! Should I deny having one or quickly change to my business suit? -- I hope you all agee that this is ridiculous; Likewise, if someone calls my private mobile phone, he\she have to realize that he\she is stepping into my personal world and that he\she will hear my personal greeting or my personalized ringback tone. We all have a professional persona and a private one at the same time. By no means it should disqualify an applicant from getting hired for the job.

Having said that, if this still bothers you, you don't have to get rid of your ringback tone. Today, you can have multiple ringback tones and multiple voice mail greetings set according to the person calling you. So you can set up “How I wish you were here” for your girl\boyfriend and “Work All Day” for your prospective employer. There's no need to hide.

Leveraging Ringback Tones Success - Content Best Practice

The first case study of successful Ringback Tone marketing strategies led by mobile operators will be the example of Cosmote Greece with its successful practice of mobile content offering.

Cosmote is the biggest mobile operator in Greece, having 1st Q 2006 customer base of ~8.8m out of total addressable population of ~45.6m. On January 2005, Cosmote introduced the Greek market a service for personalizing the standard ring-back tone, for the very first time.

Cosmote’s main objective was to offer its subscribers a new powerful and cost-effective way for personalizing their mobile. With Calling Tunes, Cosmote’s subscribers can replace the standard ringing tone with music, jokes, or sound bites that callers can hear while waiting to be answered. This feature is part of Cosmote’s voice music portal called ‘Beat Box 1414’ which includes: Calling Tunes (Cosmote’s commercial name for ringback tones on the Comverse Fun Dial Platform), song dedications, song listening and ringtones. Cosmote also offers true tones, ring tones, music video clips, music wallpapers, music news, music alerts, IFPI top10, artists’ voice messages, music quiz and information about music events.

Cosmote’s main focus was given primarily to youth segment (15-25) that enjoy using value added services. Secondary focus was given to attracting the 25-35 year olds that look for a way to personalize their phone. And, with the right content and the proper marketing campaign, Cosmote believed that ringback tones can attract all the different age groups.

Another major effort was to provide different options for greater personalization. Cosmote realized it should give the tools to make user’s mobile unique so it allows users the ability to set a Calling Tune as default to all users, the ability to select different Calling Tune per user and the ability to select different Calling Tune per time of day.

To accomplish its goals, Cosmote’s efforts were focused on getting the right content to the right people at the right time, by carefully selecting content to appeal the targeted segments. Cosmote’s strategy was to offer exclusive music content related to major events (Eurovision, FIFA World Cup, Mundobasket) and special dates (Valentines Day) only to its subscribers. Also, Cosmote promotes its entire mobile content services offering as a whole; realizing Eurovision fans, for example, would want to see video clips and to set up their ringback tone with their favourite song. This is a great example of leveraging successful content services to promote new ones.

Effective market segmentation, pricing policy (offer high value for money) together with exclusive and relevant music offering, and different options to personalize the service further more, is what made Cosmote’s ‘Beat Box’ a content success story.

And, I have a special treat for my readers! I managed to lay my hands on Cosmote’s Calling Tunes and mobile streaming ads using Cosmote’s exclusive Eurovision content. Enjoy! :)

View Cosmote Live Streaming.mpg (1948K)

View Cosmote Calling Tunes.mpg (1946K)

For the second case study and more insights about the ringback tone market - don't forget to tune in next Tuesday!

Ringback Tone Current Market Overview

Back in 2002 was the first introduction of customized ringback tones, made by the South Korean operator SK Telecom with its 'Color Ring' ringback tones service. SK Telecom generated over €80 million (US$100 million) in Q2 2002 and has reached 54% of SK Telecom's 18 million subscribers in penetration.

In spite of the rapid growth and high penetration of ringback tones in South Korea, western operators decided to take an approach of “we will wait and see” towards the new app on the block. Having a lesson learnt about different markets behaving differently through the i-mode experience, western operators realized that not every "killer app" in Asia would necessarily stick in the USA and European markets.

Despite of the cold welcoming, today Ringback Tone is becoming one of the biggest mobile entertainment revenue generators. In some operators Ringback tones are overtaking ringtones sales. In Europe and North America there’s a 60%-80% of Ringback Tone potential end-user-coverage, 80%-90% wireless operators are expected to launch the service by end 2006, and at least one operator in each Western European countries and almost all in North America has already launched the service. Also analysts forecast a substantial RBT market growth in the upcoming years.

At present, most of the operators are facing various challenges in the way to increase Ringback Tone service penetration, create on going usage of content, increase the awareness and in general turn Ringback tones into a more successful service. Understanding operators' needs and challenges Comverse Fun Dial (Comverse’s Ringback Tone brand) team came up with the idea to hold a global marketing seminar. The Fun Dial Marketing Seminar was the first ever industry conference that was dedicated to the Ringback tone market. The Fun Dial Seminar brought together leading industry experts, Fun Dial customers and operators with Ringback Tone service from other vendors, as well as content providers and managed services providers to facilitate an environment of knowledge sharing and to create an open forum to discuss burning issues related to Ringback Tones.

At the opening seat, Richard Abdalian, VP Developing Markets, Universal Music Group International Digital presented the role of content in the success of mobile music. “Music and content are ever seeking creative new distribution channels. The wide adoption of cellular by a wider range of demographics, younger segments, music savvy’s etc’ has opened new avenues of revenue for both cellular companies as well as the music industry” He Said.

• How to turn the Ringback Tone into a successful service generating significant revenue?
• Two case studies of successful Ringback Tone marketing strategies led by mobile operators
• The Comverse Fun Dial's vision on the future of the Ringback Tones service
• These and more are among the many issues that will be reviewed here, at Xellular Identity, in a series of posts during November. I welcome you to tune in on Tuesday for the first case study!

Mobile Music Market Review

As many of you know, not so long ago I joined the Comverse Fun Dial business unit - who brings you the ringback tones service. One of the first things I did in order to learn the material was to review the services available on the mobile music market today. Thinking it mught be interesting and handy for some of my readers, I’m sharing this brief review - so here we go :)

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The mobile music market is presenting a substantial growth, with key players like handset vendors and operators offering customers communication and entertainment. The mobile music value chain represents key telecommunication companies, mobile operators and handset vendors partnering with record labels to offer music content to the users.

Mobile Handsets

Today, many mobile handsets are able to play MP3 or WMA music files, so the mobile HS is practically an iPod or a MP3 music player together with the “regular” mobile features (voice, SMS, etc'). The dedicated music phones, like the Sony Ericsson’s series of Walkmans handsets, provide up to 4G (~4000 tracks!). Whereas most of the "plain" handsets provide up to 64MB of storage space, which are about 15 tracks.

Operator services

Most of the mobile operators offer music content such as ringtones, real-tones, ringback tones, full-track music download, and music videos through the operator’s portal. To get your music, all you have to do is browse the portal and search through a list of artists\songs, select your favorite and download it straight to your HS.

To enlarge sales and revenues, operators also need to invest in developing different mechanisms to expose users to new music and entice them to download.

Non-operator services

As mobile music is a thriving market, many want to take piece of the pie. Not only operators offer mobile music content, but also many ‘off-portal’ companies like Jamster, Blinko and Moderati, hold a share of the market. By simply sending a short code through an SMS, users download ringtones and other mobile cintent, unaware of the provider's identity.

Mobile Radio

Maybe a little underestimated but still living among us - the radio! A rising number of handsets have an FM radio built in. A cool example of integrating radio streaming with the mobile is Vodaphone's Radio DJ app. It is practically the mobile version of Pandora, that let’s you

“create your own music channels by rating tracks as you listen to them. Then the more you listen and rate, the more personalized the music channels become”.

[via Gizmodo]

As the industry for mobile music content and services keeps growing, network operators and content providers are looking for new ways to maintain connections with music oriented users. For the talented and creative mobile users, one new area is interactive mobile music services such as phone ringtone "remixers". A ringtone remixer is an app enabling users to compose or arrange a piece of music and save the "remix" as a ringtone.

Make your own music

As the industry for mobile music content and services keeps growing, network operators and content providers are looking for new ways to maintain connections with music oriented users. For the talented and creative mobile users, one new area is interactive mobile music services such as phone ringtone "remixers". A ringtone remixer is an app enabling users to compose or arrange a piece of music and save the "remix" as a ringtone.

Music Is Out, Reality Is In

After Lukas Rossi was crowned as the winner of a music talent reality contest and is now the lead singer of Rock Star Supernova I’m pretty sure that we will see more of this mixture of reality and music in the future of the entertainment and mobile industry.

A short brief for the non U.S. among my readers:
Rock Star Supernova is a CBS reality TV show where in its second season drum player Tommy Lee (Mötley Crüe), bass player Jason Newsted (ex-Metallica) and guitarist Gilby Clarke (ex-Guns N' Roses) were gathered together on the search for a rock\metal lead singer. To find their rising star, they had a big contest with all the reality sh*t (sorry) of: accommodating all contestants in the same huge mansion so they can fight each other, eliminating a contestant after a live show every week, decision making done by a combination of viewers' voting and the band's decisions. And, of course, a big prize to the winner - to record an album with the band and go on a tour. On first impression - it’s pretty much like the hard rock version of “American Idol”. Wait.

Entertainment in the last few years is more and more about process and less about content. Being a little nostalgic here I would say that in the past, bands were about the music they made (content). They had to struggle for public recognition and success. If we examine Rock Star Supernova for a moment, the band is practically a weird bunch of musicians scraped together. They wouldn’t have joint together under any other circumstances; and they could never succeed without the show because their music is meaningless and uninteresting from a musical point of view. Yet, in reality, Rock Star Supernova was a success even before it had a single song or even a lead singer…! Nobody really cares about the future band or even worse - about their music. While the process in which people compete, fight, excite, stimulate, win and lose is much more interesting and traffic generating. It’s all about elimination, who gets voted off, who hates whom. Furthermore, even the band itself doesn’t make artistic\musical decisions but economical ones: if a talented contestant wouldn’t generate enough traffic, the band will eliminate him\her, even if he\she is favorited by the band. Why? Because eventually, they all need to sell and attract the masses later down the road. Decision making comes down to plain economics of benefit vs. cost. The money maker isn’t necessarily the outcome (music, tour, album) but the process (rating, SMS traffic). So I can sum it all up to this: Music is out, reality is in.

How this has happened? The "reality" concept which was integrated into the music industry has changed the way music is made. Instead of “the making” being hidden and the music being public, it has become the other way around. It's more profitable. This generates buzz about the band when there is no real content yet. Also it produces emotional attachment and huge interest before there’s a music product to sell to the masses. And most important - it enlarges sales: now we consume the process of “the making” and we consume the power to keep or eliminate contestants. We do it by voting by SMS and by consuming mobile content like ringtones, ringbacks, wallpapers and clips all by Verizon, before there's an album or a concert... The outcome: the mobile and entertainment industry make more $$. So, who’s gonna give up on another season of the show?!

What's in a Name?

"Oh, did you mean Cingular's Answer Tones, 3's Dialtunes, Francetelecome's Fun Tones, or Cosmote's Calling Tunes...? And in Israel, is it Funtone (Orange) or Pleasant Waiting (Cellcom); in the UK, is it Calling Tunes (Orange) or Caller Tunes (T-Mobile)? "

-Confused?
-After many inspiring introductory meetings with some VERY interesting marketing co-workers at the Fun Dial business unit, it's clear. There's a name problem :)

While you can buy and download ringtones practically anywhere, no matter who's your operator (or who's your content provider), when it comes to the ringback tones - it's a totally different story. Each operator wanted to have a unique brand name that will distinguish it from other operators. Sounds logic.

But is it really? Let's examine the outcome: when it comes to users' awareness to the service, operators meet mostly confused users. A situation which turns to be one of the obstacles to the ringback tones'  penetration to the market.

So... if Nokia has realized that a product's name is a key factor to success, operators should realize it too.