Biz potential of ringback tones still untapped

Chris Bondhus, NMS
09 Nov 2007
00:00

Next to SMS or text messaging, ring-back tones (RBT) has been touted as a lucrative revenue source for mobile operators. However, based on its uptake across the globe, it seems it has not lived up to its billing - yet.

In a report entitled 'SUCCESS; Ringback Deployment and Adoption Best Practices', NMS Communications identified key barriers to subscriber uptake and the historical reasons for slow uptake of any content-based mobile service.

RBTs are one of the few mobile applications not constrained by network technologies or handset dependencies. In other words, every mobile subscriber is a potential customer - a prospective target market of more than two billion people.

So, why aren't RBTs more visible‾ Where are all of the RBT subscribers‾

RBT penetration varies widely by region. In Asia RBTs have entered the mature phase of its lifecycle with most tier 1 and 2 carriers offering the service. In Eastern Europe, South America, the Middle East and Africa RBTs are in the growth stage with many tier 1 carriers beginning to launch the service. North America is also in the growth stage although much of that opportunity falls within tier 2 carriers and MVNOs. RBTs lifecycle stage in Western Europe lies between North America's and Asia's.

Subscriber adoption rates within these markets also vary widely. Some operators boast rates above 50% while their peers struggle with subscriber rates below 1%. Market timing could contribute to the vast discrepancy between overachievers and underperformers, but timing cannot be easily influenced.

However, through quantitative analysis and qualitative research, we have identified five key fundamentals that help operators to successfully deploy ring-back tone service.

Fully utilize product features

RBT is about self-expression and interactivity. The more subscribers can personalize the service, the more they interact with the system, increasing the likelihood they will purchase additional RBTs. Too often operators don't deploy the full feature set, instead choosing to keep the product 'simple'. While this approach may be effective initially, it limits customer choice and ultimately acts as a long-term deterrent to subscriber adoption and incremental content sales as subscribers become bored.

Operators must battle the 'set it and forget it' mindset customers succumb to once they define their preferences. How can this be accomplished‾ Operators should deploy a solution designed to prompt subscriber interaction that maximizes personalization options.

For example, an operator could offer a service that includes day of the week and time-of-day personalization options that would engage the subscriber to set-up multiple tones for different combinations, i.e., weekends vs. weekdays, mornings vs. nights, Monday morning vs. Friday night, etc.

Simplify pricing

Traditionally, subscribers purchase value-added services as part of a bundle or as a pay-per-event. RBT pricing does not follow these models, resulting in an adoption barrier. While varying by operator, RBT pricing generally consists of a subscription fee and/or content transaction charge - an unfamiliar approach to the average subscriber used to purchasing ringtones per download. In mature mobile markets, the subscription fee is usually $1 per month - the per-purchase content fee is normally about $2.

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