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SUMMARY
It is a time change for the ringtone industry. The replacement of polyphonic
ringtones with real music ringtones amounts to far more than a format
replacement cycle: because record labels have now arrived in the market, the
very structure and operation of the ringtone industry is seeing dramatic
change.
Presented in two separate volumes, this report is focussed on identifying and
analysing the key forces that will shape the new ringtone industry and define
the winners and losers.
Volume 1: Executive Profiles
This report contains a collection of extended interviews with decision-makers
at thirteen different companies who are centrally involved in the ringtone
business at different parts of the value chain. Each of the thirteen executive
profiles is presented as a verbatim, Q&A transcript of an in-depth interview.
In order to provide a complete picture, this volume contains detailed
contributions from mobile operators, major and indie record labels, music
publishers, disruptive start-ups, venture capitalists, DRM vendors, mobile
content companies and entertainment lawyers -- all of whom have been
questioned in depth on their experience in the ringtone business.
The profiles presented in Volume 1 not only provide a highly valuable source
of information which reveals the latest thinking that is shaping the
development of the ringtone market, but they offer deep insight into
developments in the wider mobile content and mobile music arena with some
fascinating perspectives having been provided by several executives.
Volume 2: Industry Analysis
Two key themes to emerge from Volume 1 are strong, often divergent views and
conflicting commercial interests. In addition, industry incumbents are being
placed under unwelcome pressure as the value chain re-organises itself to
accommodate the record labels, who are currently pairing off with mobile
operators in a de-facto content-distribution alliance. In this report, Volume
2, these themes and others are analysed objectively to understand what the
future holds for different business models and different companies.
Because of the convergence trends under way in the mobile and online music
arenas, Volume 2 also contains in-depth analysis of how real music ringtones
relate to digital music: both formats will soon be appearing for sale
alongside each other on a range of retail platforms, both fixed and mobile.
Apart from providing a wealth of information and analysis of what is happening
at the coal face, this report will allow you to easily identify which market
and product strategies are aligned with the future direction of the market,
and which are not.
TABLE OF CONTENTS
- 1CONSUMER PROPOSITION
- 1.1UNDERLYING VALUE
- 1.1.1Differences between ringtones and songs
- 1.1.2Personalisation
- 1.2PRICING
- 1.2.1Trend 1: Erosion of the premium for mobile-based song downloads
- 1.2.2Trend 2: Increase in the mean pricing of online-based song
downloads
- 1.2.3Trend 3: Convergence of realtone and online music prices
- 2RINGTONE MARKETING
- 2.1MARKET SEGMENTATION
- 2.2SAME-CATEGORY SEGMENTATION
- 2.2.1Same-brand segmentation
- 2.2.2Generalisation to Realtones
- 2.3MUSIC MARKETING
- 2.3.1Buy-in from label marketing and promotion (M&P)
- Mindset
- Lack of infrastructure
- Unfamiliarity with format
- 2.3.2Shift from mobile-focussed to music-focussed marketing
- 2.4RINGTONE MARKETING IN THE FUTURE
- 2.4.1Role of record labels
- 2.4.2Competitive advantage
- Economies of scale
- Economies of scope
- Control of product
- 3INDUSTRY STRUCTURE AND VALUE CHAIN
- 3.1CONVERGENCE
- 3.1.1Devices
- 3.1.2Channels
- 3.1.3Markets
- 3.2RECORD LABELS
- 3.2.1Definitely not business as usual...
- 3.2.2And then a pleasant surprise: realtones
- Content ownership
- Preferential access to prime retail channels
- Leverage of existing assets
- Marketing
- 3.2.3Actions being taken by labels to assert themselves in the value
chain
- Tactic 1
- Tactic 2
- Tactic 3
- Tactic 4
- Tactic 5
- Tactic 6
- Tactic 7
- Tactic 8
- Tactic 9
- 3.3MUSIC PUBLISHERS
- 3.3.1Publishing royalty rates
- 3.3.2Unauthorised combined licenses
- 3.4MOBILE CONTENT COMPANIES
- 3.4.1Trend 1: Market consolidation
- 3.4.2Trend 2: Market fragmentation
- 3.4.3Mobile content aggregators
- 3.4.4Mobile solutions providers (MSPs)
- 3.4.5Mobile content brands
- Is a mobile content brand mainly about retailing or content?
- Analysis: royalty-free content
- 3.5MOBILE OPERATORS
- 3.5.1Off-carrier distribution
- Cost
- Portal placement
- Portal search
- Direct relationships between music sites and fans
- 3.5.2Avoidance of carrier payment mechanisms
- Example: Apple's iTunes Music Store
- Carrier blockage
- The mobile content distribution oligopoly: real or imagined, fair or
unfair?
- 4COVERTONES
- 4.1CONFLICTING INTERESTS
- 4.1.1Interest group 1: mobile content companies
- 4.1.2Interest group 2: record labels
- 4.2USE OF COVERS IN THE MUSIC INDUSTRY
- 4.2.1Original recordings
- Covers
- Re-mixes and sampling
- Other industries
- 4.2.2New recordings
- 4.3COVER VERSION RINGTONES (COVERTONES)
- 4.3.1Production process
- 4.3.2Quality and economic viability
- 4.4LEGAL POSITION: COVERTONES
- 4.4.1Copyright
- 4.4.2Passing-off
- 4.5ANALYSIS
- 5CREATE-YOUR-OWN RINGTONES
- 5.1UNAUTHORISED SERVICES
- 5.1.1Service operation
- 5.1.2Example services
- 5.1.3Threats
- Mobile operator lock-out
- DRM
- Unique content
- Authorised services
- Price erosion
- MGM-Grokster -- U.S. Supreme Court Hearing
- 5.2SELF-CREATION
- 5.3AUTHORISED SERVICES
- 5.4ANALYSIS
- 5.4.1Market size
- 5.4.2Off-carrier distribution
- Cost
- Market reach
- 6FROM REALTONES TO DIGITAL SONGS?
- 6.1EZ CHAKU-UTA FULL
- 6.1.1History
- 6.1.2Service description
- 6.1.3Consumer response
- 6.1.4Key success factors
- 6.2MOBILE INTERNET: DOCOMO I-MODE AND VODAFONE LIVE!
- 6.2.1Product quality
- Vision
- Engineering-led
- Market-focussed
- 6.2.2Market timing
- 6.2.3Summary
- 6.3IMPLICATIONS FOR MOBILE OPERATORS OUTSIDE JAPAN
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