Ringback To America
By Mike Masnick, Wed Nov 17 01:00:00 GMT 2004

Ringback tones stormed Asia, and have been rapidly showing up in Europe. The US is next on the block, but many questions still linger about whether they're simply a fad.

Ringback tones came out of nowhere. While the world was just getting an inkling of just how big a market ringtones would be, SK Telecom started experimenting with playing a musical interlude for callers instead of the canned "ring ring" noise everyone is used to hearing while they wait for a phone to be answered. The offering caught on quickly in Korea and spread to other Asian nations rapidly. Earlier this year, it started popping up all over Europe, though with some analysts concerned about how big a market it would really become.

Ringback tones are finally jumping across oceans to the US. Last month, the first American operator to launch ringback tones was First Cellular, a regional operator in Southern Illinois. However, the big players weren't going to be kept out of the market for very long. While many thought T-Mobile would be first, moving its "Caller Tunes" offering over from Europe, some delays have held up the launch. Verizon Wireless stole T-Mobile's thunder today by beating T-Mobile to an official announcement on ringback tones.

There are, however, many questions concerning the service. Verizon's offering requires a $0.99/month subscription fee and then an additional $1.99 per song used over the course of a year. The service launches with only 2,200 songs from just two major labels -- which is quite a limited selection. More importantly, it's still not clear if consumers fully understand ringback tones. They're not the easiest thing to describe, and the people paying the money never actually gets to hear the ringback tones themselves -- which some may consider a tough sell. Adding a monthly subscription fee as the initial tollbooth, combined with prices much higher than most subscribers are used to paying for downloading a complete song, and it seems like Verizon Wireless might have an uphill battle. Subscribers aren't going to want to pay a monthly fee without understanding the benefit, and the price per song figure may make them think twice about even experimenting.

Those who believe strongly in the power of ringback tones continue to point to the success they've had in Asia. There is also something of a viral aspect to ringback tones, in that non-subscribers who call subscribers hear the tones and many are likely to ask about them. That could help to generate some buzz, which might get them over the initial fee hurdles.

The real question is whether or not any revenue from ringback tones is a sustainable business, or a flash-in-the-pan. Ringback tones are, essentially, a fashion statement. Their only real purpose is to show off to others who are calling you. The problem, then, is that fashion statements go out of fashion -- sometimes very quickly. It's tough to bet a business proposition on a fashion statement. If you're lucky, you can make a lot of money, but it's quite random as to how long that money-maker will last.