Submitted by Mike Grenville on Tue, 18 Nov 2003 21:36

The unregulated ringtones market is holding back growth of MMS, undermining consumer confidence and impacting on revenue streams says Fonedream. They call on the mobile content and music/film industries to work together to create consumer recognition of authorised, licensed products

In 2002 the global market for ringtones was estimated to be worth between $700 million and $1 billion, according to music industry sources. However, if the music and film industries fail to work with content creators to deliver official mobile content, using digital rights management technology, then the market will be overrun by unauthorised products, affecting brand values as well as revenue streams for all parties, states Graham Baines, managing director of mobile content provider, Fonedream.

To date, the cost associated with unofficial/unlicensed ringtones has yet to be assessed - but while the Mechanical-Copyright Protection Society (MCPS) vehemently denies the 'urban myth' of $1million a day being lost through unlicensed ringtone operations, the figure is significant for the music industry, which is already suffering as a result of a 10% drop in world music sales during the first half of 2003.

Baines explains, "Many artists and music publishers are currently disenchanted with the market and are therefore opting to eschew the whole digital content issue. By turning their backs on this huge mobile market, they are effectively cutting off an enormous potential revenue stream and leaving the field wide open for unauthorised, often poor quality, products that will simply undermine brand value."

He continues, "In order to encourage artists and publishers to actually want a part in this market, content creators need to take more responsibility and play by the rules, regulations and licensing obligations in order to make it an attractive proposition from the outset. This is where MCPS licensing has a key role, not only in protecting the industry's credibility but also in providing consumers with greater product understanding and purchasing confidence which will restore the support of artists and music publishers."

Furthermore, Baines believes that the music industry needs to step forward and proactively cooperate with content providers to deliver authorised products to the market - and soon - or opportunities will be lost. Given an infrastructure that incorporates Digital Rights Management and an understanding of the new media business model, the potential revenue streams are compelling. But realising this opportunity will require the music industry to be less protective of their brands and allow easier access to 'official' mobile content.

Baines comments, "If music companies embrace the mobile market and work either with the MCPS or direct with specific content providers to develop products, then the result will be high quality content, clearly stamped as authorised, that will provide customers with a reference point and quality mark. Consumers want ringtones, they increasingly want polyphonic ringtones and they want real mobile music - the right business model will give them exactly that."

www.fonedream.com