Ringtone Shoplifters of the World Unite and Takeover
July 21st, 2005 | by amarfresh |QPass, provider of mobile content delivery platforms, CRM and premium billing services, released a press release today indicating that content providers have “security holes” which will result in a $301 million loss in ringtone sales by 2006.
Qpass attributes this problem to the need for the mobile and music industries to enable users to preview music before they purchase it, an important part of the customer purchasing experience. Two thirds of web sites tested offered preview music files between 15 and 30 seconds, the perfect length to convert into a ringtone.
The release plays up the significance of the lost revenue, however The Register picked up the story and has their own take:
Qpass points out that the ringtone market presently accounts for between 6 and 10 per cent of music industry revenues, and estimates that by the end of 2007 the “lost revenue” through this loophole - if left unsecured - could total £230m, “making this a significant revenue leakage problem”.
Actually, you can dispute the significance. The worldwide music business is worth $30bn, so presently this is just 0.2 per cent, a rounding error. And research company Strategy Analytics reckons ringtones will be worth $9.4bn (£5.2bn) in 2008, which makes this level of stealing from insecure sites look trivial.
The press release points out that the problem in US may have already cost the mobile and music industries an estimated $40 million since the beginning of 2004. Yeah right. Most cellphone users in the US don’t know how to get a ringtone from their PC to their phone; let alone know how to download a preview to their PC. Carriers cripple phones, wall their networks, and overcharge for data cables and software making it difficult for the average cell phone user to get ringtones onto their phone which they need not pay for. I would think that most users find it much easier to browse a ringtone portal or to send an SMS to get a ringtone than to deal with the data cables, Bluetooth profiles and unauthorized software. Mobile phone users who are saavy enough will never pay for ringtones. It may take them twice as long to get a ringtone to their phone, a PC, specialized software, the knowledge of how to use it, but it will still be free. I don’t know what QPass is clamoring about, but they must realize that the there will always be alternate routes to their toll road.
Remember that MMS interoperability is now shared between the major US cellcos. (Especially with the advent of wireless broadband), ringtones, wallpapers, and video clips are going to be flying around the networks and into our MMS inboxes. Begin the new mobile P2P paradigm. QPass and the monopolistic music companies stand to “lose” more money from this as opposed to “shoplifting”.
1 Trackback(s)