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Moneymaking Realtones
Posted: 08-Aug-2006 [Source: Telephia]

[Ringtone purchases continue to be popular but continue losing ground to realtones and ringback tones.]

San Francisco -- Realtones account for more than three-fourths of consumer spending on music ringtones to personalize their phones, according to Telephia, the leading provider of performance measurement information to the mobile industry. Telephia's latest quarterly Mobile Ringtone Report shows that mono and polyphonic ringtones now account for only 12 percent of consumer spending on music personalization products, down from nearly 30 percent in Q3 2005 (see Table 1). Ringback tones, which were launched in late 2004, now account for 11.5 percent of consumer spending in this category, an increase of almost 50 percent since last year.

According to Telephia, the number of mobile consumers purchasing a ringtone increased to more than 24.6 million in Q2 2006. While the overall market is growing, mono and polyphonic ringtones are losing market share to realtones and ringback tones.

"It's no surprise that mono and polyphonic ringtones have fallen out of favor with mobile consumers as realtones are a far superior format, much like how CDs replaced cassette tapes. This is all part of the broader shift toward consumers expecting their mobile devices to deliver a high-quality portable music experience," said Kanishka Agarwal, Vice President of New Products, Telephia.

Table 1: Revenue Share by Ringtone Type (U.S.) Qarterly Revenue Share

Ring Type Q305 Q405 Q106 Q206 %Growth

Realtone 62.4% 68.3% 76.2% 76.4% 22.4%

Ringtone 29.6% 22.8% 13.8% 12.0% -59.4%

Ringback 7.7% 8.9% 10.0% 11.5% 49.5%

Source: Telephia Mobile Ringtone Report, Q3 05 - Q2 06

-- Note: The Mobile Ringtone Report represents on-portal ringtone activity data from the top four carriers,including Sprint Nextel, T-Mobile, Verizon and Cingular. Data excludes pre-paid and corporate liable activity.

Popularity on the Rise for Ringback Tones

Ringback tones offer mobile consumers a way to personalize what their callers hear and the service has grown in popularity over the past year. Chamillionaire's Ridin' was the top revenue-generating ringback title during the second quarter, securing 3.1 percent of the total ringback revenues (see Table 2). What You Know by T.I. came in second, securing a 1.8 percent share. Hips Don't Lie by Shakira & Wyclef Jean, Mary J. Blige's hit single Be Without You, and Me & You by Cassie rounded out the top five ringback tones.

Table 2: Top Ringback Titles by Revenue Share (U.S.)

Title Artist Genre Revenue Share %

1. Ridin' - Chamillionaire - Rap/Hip-Hop - 3.1%

2. What You Know - T.I. - Rap/Hip-Hop - 1.8%

3. Hips Don't Lie - Shakira & Wyclef Jean - Pop - 1.5%

4. Be Without You - Mary J. Blige - Soul/R&B - 1.4%

5. Me & U - Cassie - Soul/R&B - 1.3%

Source: Telephia Mobile Ringtone Report, Q2 06

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