05:15 PM

BMI Predicts Decline In Ringtone Market, Jump In Ringbacktones

The company that licenses music is bullish on mobile audio and TV, but says ring tones have lost their novelty and cheaper alternatives are available.

Broadcast Music Inc. predicts that ringback tones will exceed $210 million in U.S. retail sales this year, while the ring tone market declines.

BMI released figures Thursday that forecast a 50% increase in the company's 2007 market estimate for ringback tones, or music that plays while a user places a call to a participating subscriber.

The company said that ring tones would generate about $510 million in retail sales this year, marking a 7% reduction from last year's total of $550 million. BMI also noted that ring tone sales dropped $50 million last year from their peak of $500 million in 2006.

"The market for ringback tones has grown stronger than we originally forecasted last year," Richard Conlon, VP of new media and strategic development for BMI, said in a statement. "Its growth, coupled with the positive gains that streaming mobile media have made in 2008 alone, supports our bullish point of view on the growth of the mobile entertainment business."

Conlon said BMI also predicts gains in mobile audio and mobile television style services over the next several years.

He said that BMI's 2007 predictions that the ring tone market would continue to decline appear to be correct. He said that's because the novelty phase is wearing off and lower-priced substitutes have become available.

BMI licenses the public performing right for the musical works of its more than 375,000 songwriters, composers, and music publishers. The company publishes annual mobile music market reports, which include projections, as well as summaries of previous years. The reports are based on buying habits of more than 200 million U.S. mobile subscribers. The company uses its data to pay royalties.

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