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The music ringtone market is within the decline stage of its short life cycle, according to industry research firm IBISWorld. The company forecasts industry revenue to decline for the second consecutive year – down 15 percent from its $880 million peak in 2007 – totalling just $750 million in 2009.
“Music ringtones practically boomed overnight, but with two consecutive years of decline it seems the industry is exiting just as rapidly as it entered,” said Toon van Beeck, senior analyst with IBISWorld. “And with the ringtone market already reaching its decline stage, its life cycle is only expected to last about 15 years.”
Normal life cycles consist of three phases: growth, mature and decline. Data indicates that the music ringtone market may have gone directly from growth to decline. If industry revenue peaked only two years ago and is already in decline, the mature phase was completely skipped or lasted for such a short period that it went unnoticed by most observers.
Surging demand of digital albums and singles, worth an estimated $1.94 billion, are the reason behind the eroding mobile ringtone market. Early ringtones were bought via text and cost consumers up to $5 a song. Today songs can be purchased for less than a dollar now that mobile phones can connect to the Internet and music can be stored on memory like a computer.
“Mobile Phones are now truly wireless Internet devices and allow consumers to download full songs for ringtones rather than the 30-second versions available in the past,” said van Beeck. “Providers like iTunes and Amazon.com have revolutionized the way we buy and use music, driving consumers to hang-up on ringtones.”