Thumbplay News

ON EVERY SITE A RINGTONE
A New Service Extends the Reach Of A Faltering Mobile Music Format
By Anthony Bruno for BILLBOARD
May 11, 2009


Ringtone Sales are dropping sharply but record labels and mobile content providers are doing everything they can to shore up sales.

Several mobile carriers have begun offering a make-your-own-ringtone service from provider mSpot. Labels like Warner Music Group have explored bundling ringtones with full-song download sales. And services like Myxer have even tried ad-supported ringtones.

Now, The mobile content provider Thumbplay has quietly unveiled a new service called OPEN Pro that allows labels to sell ringtones almost anywhere online without striking deals with each wireless operator. OPEN Pro is an extension of a tool Thumbplay launched in September that allows unsigned artists to sell ringtones by uploading their content to the Thumbplay system.

“It helps labels and artists’ managers sell mobile content from the Web sites they manage,” says Thumbplay director of business development Mike Park. “It’s basically a way for them to keep track of sales for all their labels, drill down into specific artists and track performance.”

Even when ringtone sales were still growing, the format faced two key distribution bottlenecks. The vast majority of sales came through mobile operators, which maintain complete control over which artists get prime placement on their crowded mobile entertainment menus. That inevitably leads to a focus on chart-topping artists, at the expense of others.

Bypassing the carriers and selling directly to fans brought its own set of challenges, most important of which was that ringtones have to be formatted for each mobile handset and mobile network.

Thumbplay is breaking through these logjams. It has agreements to deliver ringtones to each mobile operator and has the ability to determine the proper format based on the user’s phone. It also has partnerships with music sites like AOL, MTV, Clear Channel Online, MSN and iLike, so that tracks listed on these sites carry a “buy ringtone” link from Thumbplay.

The new OPEN system allows labels to add that same buy link to any service that doesn’t already have a deal with Thumbplay, including the artist’s own Web site, Twitter and MySpace Page. It also includes a widget creation tool that gives fans the ability to sell their favorite artist’s ringtones from their own blogs and social-networking profiles. Labels can use the OPEN content management and data reporting systems to track ringtone sales across a variety of sites. Thumbplay hopes to add mobile full-track downloads to the OPEN Pro program in a few months.

Thumbplay takes a cut of each sale. And while it sells a la carte ringtones, its primary business model is signing up fans to a monthly $10 subscription plan through which users get credits that can be redeemed for ringtones, games and other mobile content. Labels get the same amount per ringtone whether it’s sold a la carte or downloaded through a subscription.

To enlist the help of labels in growing its subscriber base, the OPEN Pro service pays labels a bounty for each new Thumbplay subscriber acquired through their artists’ widgets.

A&M/Octone tested the service late last year with a campaign for Hollywood Undead. Ringtones for developing artists usually get little attention on carrier-controlled ringtone menus, so Rome Thomas, head of sales and artist development at the label, was looking for a “back door” of sorts to the mobile market. Using Thumbplay’s widget to drive sales from the artist’s site, as well as other social network outlets, was exactly what he needed.

“Thumbplay gives me the opportunity to make an amount of mobile revenue via all of our Web surfaces,” he says. “I’m always looking at how to be more competitive on the mobile side.”

As a result, the campaign saw an 8% conversion rate of those clicking through to the “buy ringtone” link and completing a purchase, about four times the average.

But Thomas says the bounty for new subscribers has proved to be the more interesting opportunity.

“The bounty income was more compelling than the per-unit sales of an a la carte product,” he says. “We’re making a significant, very high dollar amount per acquisition, and we’re also being paid on the back end for each piece of content sold. This affiliate fee was higher than any other affiliate fee that I’ve ever seen from any of our online retailers.”

To date, ringtone sales have focused on mining more revenue out of radio hits. If programs like Thumbplay take off, the faltering format my find some relief in the long tail.