IDC Sees Carriers Dancing in the Streets Over Ringtone Revenue Opportunity

FRAMINGHAM, MA – June 4, 2003 – Although the U.S. ringtone market is small in 2003, a combination of several key trends will drive the revenue opportunity for this market to more than $1 billion by 2007. In mid-2003, ringtones top the list of U.S. carriers' wireless data service offerings. These 15-second snippets of songs and sound effects fill the rosters of carrier wireless content catalogs — everything from Missy Elliott's “Get Ur Freak On” to the Ben Hur theme song to bird-chirping sound effects.

"Moving from ringtones to a fuller mobile music services industry will be a critical evolution in reaching the strategically important youth market," said Dana Thorat, senior research analyst in IDC's Wireless and Mobile Communications program. "This progression will involve carriers' teaming with device manufacturers, content providers, and entertainment media industry leaders to execute innovative marketing and branding campaigns to differentiate their competitive content offerings while serving to build stronger marketing relationships between entertainment artists and their mobile fans."

The U.S. market for ringtones is still in a formative stage. IDC believes momentum in this market will be driven by the increased availability of polyphonic-capable devices and polyphonic ringtone content during the next 12 to 18 months. By late 2004 and early 2005, the U.S. market will be headed toward higher-quality music content delivered through premium wireless audio services to niche markets, phasing out standard monophonic ringtones.

IDC's recently released report, Ringing in the Revenue: U.S. Wireless Ringtone Forecast, 2002-2007 (IDC #29438), examines U.S. wireless ringtone subscribers and revenue associated with those subscribers, ringtone users by age and gender, U.S. monophonic versus polyphonic ringtone purchasers, and U.S. monophonic versus polyphonic ringtone revenue share. In addition, this study describes the current ringtone offerings of the major U.S. wireless carriers and service providers.

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