A number of industry experts in the UK have said that the until recently booming ringtone market is slowly going into decline, citing competition from full track mobile download platforms, consumer concern about certain ringtone operators' practices, and the growth in illegitimate sources of ringtones as reasons for the market shift.
Research firm MusicAlly report that while UK ringtone sales grew from £34.8 million in 2000 to £177.3 million in 2005, this year revenues are expected to fall to £143.5million. The company reckons that trend will continue, and the UK market will be worth just £78.8 million by 2011. Meanwhile, global revenues at Jamba, a leading ringtone company, are expected to fall from $500 million to $300 million this year.
The Guardian quote Universal Music UK's New Media chief Rob Wells as saying: "The ringtone business in the UK has stalled and is now in decline. You can put it down to price, piracy and the Crazy Frog effect".
While the Crazy Frog phenomenon provided a boost to sales last year, some reckon it also caused consumers to become tired of novelty ringtones. Meanwhile younger music fans are using software that enables them to create their own ringtones from MP3s, which they can then share with friends via Bluetooth. More affluent early adopters, previously big customers of ringtones, are also spending more money downloading full tracks to the music players that are now installed on their phones.
Paul Goode of mobile research firm M:Metrics told the Guardian: "The ringtone market is experiencing a significant shift. The availability of tools to make user-created ringtones more accessible to the masses poses an even greater threat to companies who can offer no additional value to a consumer who buys a ringtone in lieu of making one themselves."