Telephia: Realtones Account for More Than 76 Percent of Mobile Consumer Spending on Music Personalization

According to Telephia, "realtones account for more than three-fourths of consumer spending on music ringtones to personalize their phones." The firm's latest Mobile Ringtone Report showed 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. 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. 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."

Kanishka Agarwal at Telephia said, "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."

Table 1: Revenue Share by Ringtone Type (U.S.)
              Quarterly Revenue Share
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Ring Type   Q3 05  Q4 05  Q1 06   Q2 06  Percent Growth (Q3 05-Q2 06)
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. 

Telephia found that "ringback tones offer mobile consumers a way to personalize what their callers hear and the service has grown in popularity over the past year."

Table 2: Top Ringback Titles by Revenue Share (U.S.)
                                                            Revenue
                                                             Share
    Title                Artist                Genre           (%)
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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