Ringtones are Big Business

Back in the 19th century, the telephone slowly made its way into popular usage with a simple ring indicating that a call was incoming. No one could have imaged in that long ago era, that an entire industry would someday exist solely to support the customization of the sounds played for incoming telephone calls.

In the 1970s it became possible for manufacturers to create electronic ringtones for phones and in the 1990s that technology was adapted to cell phones. By 2003, the global ringtone market was worth between $2.5 and $3.5 billion in sales (USD).

This explosion was due to several factors. The first being the unprecedented adaptation of mobile phones around the world. The development of different technologies to record and transmit sound files also played a significant role. Lastly, the marketing strategy of getting customers to download free ringtones to introduce them to a new service was also pivotal. While some users would stubbornly stick to the free options, others would want to purchase the longer and higher quality ringtones. In some cases, individuals are willing to pay as much as $3 for a single sound file or music snippet to use on their phone.

Some analysts insist that the ringtone industry has peaked. Sales of $714 million in the US in 2007 were followed by a drop to $541 million in 2008. While some of that decline was due to the major economic recession being experienced at that time, there is some reason to believe that the drop was partly a result of the ability of users to create their own ringtones, which meant they no longer needed to purchase them.

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