Consumers still love those mobile ringtones
This IDC report is an indication of why Wellington Financial has closed four mobile/wireless transactions (Airborne, Intrinsyc, Wmode and Bluestreak) in the past 16 months or so:
Verizon Wireless Led U.S. National Carriers in Data Services Overall for Third Quarter 2006, Says IDC
January 23, 2007
There are more than 229 million U.S. wireless subscribers who are spending an average of $6.00 per month on data services according to the latest IDC research. Customer spending on data services contributed a total of $4.1 billion in revenue for 3Q06. In terms of content types, ringtones remain the most popular type of paid content downloaded onto mobile handsets.
IDC says messaging contributed nearly half the data revenue, while business- and consumer-oriented services and content constituted about 40%, and content and simple application downloads came to about 12%. Of the top ten wireless carriers, IDC research indicates that Verizon prevails as the new leader on data spending-per-customer basis.
‘Our research found that at $7.27 spent per-customer on data services in 3Q06, Verizon Wireless became the new market leader among the national operators, eclipsing Sprint Nextel, the long-time leader in this metric at $7.15,’ says Julien Blin, research analyst for IDC’s Wireless and Mobile Communications program. ‘Among the national carriers, Verizon Wireless is today the overall leader in data services in terms of total wireless data revenue, data percentage of ARPU, and data spending, although Sprint Nextel and the other national carriers continue to lead in select services.’
Within the paid downloads category, ringtones remain the most popular type of content bought and downloaded onto mobile handsets:
IDC research shows that about 20% of U.S. subscribers currently purchase at least one ringtone every quarter, therefore making ringtones the leading contributor to paid download revenue. By 2010, more than a third of all U.S. wireless subscribers and customers are expected to purchase at least one ringtone every quarter.
In terms of ringtone types sold on a unit basis, master track tones remains the predominant type of ringtone sold today.
IDC predicts that the total volume of ringtone sales in the U.S. market will approach the 1 billion mark by 2010, up from about 430 million this year. Associated revenue will increase at a healthy compound annual growth rate (CAGR) of roughly 20% between 2005 and 2010, and top well over one and a quarter billion dollars by the end of the forecast period.
‘Master track ringtone sales continue to rise in popularity, and more than half of all ringtones sold today are of this variety. Continued support from leading record labels, media companies, and brands will remain a factor driving future sales,’ added Blin. ‘While direct-to-consumer ringtone sales are likely to continue to grow in the next few years, other innovative strategies and technologies such as superdistribution, enhanced mobile search, music recognition, and bundles are likely to become important elements in the market.’
The IDC 32-page study, ‘U.S. Wireless Carrier Data Services 3Q06-3Q07 Vendor Analysis: QView Summary and Analysis’ by Julien Blin, presents a competitive analysis and summary of the data services (SMS, MMS, IM, consumer email, and TV/video services) and content types (ringtones, graphics/wallpapers, games, and simple consumer and business applications) offered by the top 10 wireless carriers (based on subscriber/customer base) as well as an aggregated view of the rest of the market for 3Q06 through 3Q07. Standard industry operating metrics — including subscriber/customer totals, net additions, ARPU, churn, capital expenditures, service revenue, and minutes of use — for the operations of U.S. carriers are used as a framework to support IDC’s evaluations and assessments of the current state of the wireless data services market. This study is a companion to and summary of IDC’s 3Q06-3Q07 United States Wireless Data Services QView.
The IDC 35-page study, ‘Wireless Ringtone 2006-2010 Forecast and Analysis’ (Doc #204805; December 2006) by Julien Blin and Lewis Ward, examines the market for wireless ringtones in the United States. Companies covered include: 9 Squared, ABC, AG Interactive, Airborne Entertainment, Amp’d Mobile, Cingular, Cybird, Disney, EMI Music, Fox Entertainment, FunMobility, Helio, InfoSpace, INgrooves, JumTap, Kargo, Medio, Mobliss, Moderati, MTV Networks, Oasys Mobile, Ooober, RealNetworks, Sonic Brand Solutions, SONY BMG MUSIC ENTERTAINMENT, Sprint, Universal Music Group, VeriSign Inc., Verizon, Versaly Entertainment, Virgin Mobile, Virgin Mobile USA, Warner Music, WiderThan, Xingtone, Zingy, Ztango.”
As positive and optimistic a picture this report paints, it’s still monochrome compared to the technicolor future this industry has ahead of it. The best is yet to come…for Airborne and the prestigious colleagues and competitors we are mentioned among.
We are looking forward to mobile TV, which in part drove our recent Bluestreak investment.
But it is encouraging that consumers continue to download (and pay for) new songs and wallpapers. Perhaps the handset churn drives that in part, as new phones may sometimes require new/different downloads.
As my colleague’s 9 year old says: “It’s all good.”